Economic Insider

Flexible work: Corporations are backtracking

Flexible work
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It looks like the end to flexible work, as bosses are ordering their employees back to work in the face of impending economic upheaval and severe layoffs. But is it a permanent return to in-person work?

Disney employees got a memo from CEO Bob Iger in January. Like other entertainment conglomerates, the media company maintained a hybrid-working philosophy under which teams were allowed to work remotely twice a week. But, Iger indicated in the message that the business was now changing course and would require a four-day return to work beginning in March.

Disney isn’t the only large firm limiting flexible work. Companies across industries, such as Starbucks, Twitter, and auditing company KPMG, are requiring more in-person days or even a full-time office working habits. According to a January survey of 1,806 US workers conducted by recruitment agency Monster, while half of the employers believe that providing employees with flexible schedules has worked well, a third of those who planned to implement a virtual or hybrid model changed their minds from a year ago.

While CEOs claim in-person cooperation, companionship, and mentorship are necessary as reasons for returning to the office, studies reveal that many employees value flexible work the most. The arrangement has minimized worker burnout, enhanced work-life balance, and even improved professional performance in numerous circumstances. This means there needs to be more alignment between what employers want and what their people desire – yet managers continue to bring their staff back in.

The return to more in-person settings is an important development in the changing world of work, especially given that workers had the upper hand in bargaining for flexibility during the hiring crisis. Nevertheless, as economic uncertainty looms and corporations slash jobs on a large scale, the power dynamic is shifting back in favor of employers: many may be utilizing the slump to enforce or change their working practices. For affected workers, fears of recession and layoffs mean many will have to head back to the office — at least for now.

How has the flexible work balance shifted?

Only three years ago, a full-time employee working remotely, even part-time, was a rare occurrence, reserved for workers in unique special arrangements.

On the other hand, the epidemic sent a large portion of the workers home, particularly in knowledge-work industries. Many employees found that by eliminating daily commutes and nine-to-five office presenteeism, they could develop new, effective working habits and achieve a better work-life balance.

Flexibility immediately became the most desired employment perk in this change. As a result, many firms offered remote work to job hopefuls and existing employees amid record vacancies and quit rates. According to data from a July 2022 study of 13,382 global workers by consulting firm McKinsey & Company, 40% said flexible work was a top motivator in whether they stayed in a role, just behind salary (41%), with 26% saying a lack of flexibility was a major factor in why they quit their previous role.

Indeed, some companies, such as Airbnb, made good on their pledges right once, instituting permanent remote employment arrangements. Many other employers implemented some form of remote work, enacting hybrid-working policies. However, even after workplaces reopened, supervisors could not modify these rules; businesses that forced workers to return to the office faced workforce resistance or even resignations. As a result, employers had little choice but to incorporate flexibility into their organizations during rapid economic expansion.

Yet, as the labor market has shifted, some distant arrangements are no longer viable for some businesses. Because of the tech slowdown and growing economic insecurity, retention is no longer a top concern — especially in light of job layoffs. As a result, companies now have more clout in requiring their employees to return to work. “If an employee dislikes a new work arrangement, widespread layoffs mean they’ll be considerably less certain that another role is waiting for them,” Cooper adds.

This is true even as workers’ need for flexible work remains high. According to a December 2022 study of 10,992 American employees, 30.6% desire to work from home full-time. And the possibility for flexibility has also affected workers’ lives: some have enhanced their hours to become non-linear or developed patterns based on their virtual-working habits to carve out a better work-life balance. Several employees have even relocated to be closer to the office.

Recognizing that employees may be dissatisfied with the adjustments, some have avoided labeling them as a “return to the office,” instead branding them as a step toward “flexible work, deliberate working,” for example.

Yet, as the labor market becomes less favorable to workers, this type of subtle corporate message becomes less necessary, as it becomes easier to replace an employee than it was during the height of the recruiting crisis. Employees are aware of this, according to Cooper. Therefore, employees must obey if their employer orders them to return to the workplace five days a week, regardless of how management labels the direction.

Read Also: Workers are getting stretched as layoffs bite

CEOs who force employees to return to the workplace risk losing their best employees. But, for management, the benefits appear to exceed the hazards. As a result, some businesses are willing to invest more time and resources in getting employees back to work more frequently – or in finding new ones who will.