Why do some firms refuse to remote work?
Updated: Dec 13, 2022
One of the most significant changes in the newly transformed workplace has been employee flexibility. Knowledge workers now have more flexibility in many situations to fit work needs around their home life, which they have enjoyed and are hesitant to give up when companies call staff back to work in the office.
Additionally, employees are beginning to anticipate this liberty to last. According to a July 2022 poll by consulting company McKinsey & Company of 13,382 worldwide employees, 40% indicated workplace flexibility was the main driver in determining whether they stayed in a career, only behind compensation (41%). Lack of flexibility was another significant reason why people left their former jobs, according to 26% of respondents. According to a March 2022 Gallup poll of more than 140,000 US employees, 54% of totally remote employees and 38% of hybrid employees stated they would look for another job if their firm stopped allowing for remote work.
The results demonstrate that staff retention and attrition are now heavily influenced by flexibility. Employers now have greater concerns than ever about attracting and keeping talent as a result of the employment problem. In fact, several businesses have gone over and above to enable staff members who desire flexible arrangements, enacting rules like totally remote positions, non-contemporary work, and blended working possibilities.
In spite of these evolving expectations, many businesses are still reluctant or unable to comply with these demands. In an effort to resume working practices from before the epidemic, bosses have, in some cases, insisted that their staff members return to the office full-time. Some corporate owners have raised compensation rather than give employees this authority. There are numerous situations where this flexibility is not an option; the real question is whether the tides will shift.
The impasse over flexibility
Millions of knowledge workers have been able to successfully work remotely over the past two and a half years, despite the many lockdowns imposed by the epidemic. According to Tsedal Neeley, a professor of business management at Harvard Business School, "at the height of Covid-19, many people learned that work might unfold very differently from full-time office environments." In many situations, they also found that productivity wouldn't be harmed.
But when the Covid-19 limits were loosened, many employers started requiring that their staff members return to work. Some rules for returning to work were full-time while others had a mixed schedule. This was especially true in fields like finance, where managers frequently set timelines for returning staff to pre-pandemic levels. The majority of businesses haven't yet mandated a full-time return to the office and are preparing to do so. According to a Microsoft study published in March 2022, if they haven't already done so, half of the world's companies aim to mandate full-time in-person employment in the future.
The stringent return policies in the financial industry may be due to the fact that these companies are frequently required to adhere to regulatory standards, which can be more difficult to meet in remote locations. According to Bonnie Dowling, an expert associate partner at McKinsey with headquarters in Denver, Colorado, US, "traditional and conservative" company culture is also a major factor in why organizations outside of finance are avoiding flexible solutions.
In certain instances, bosses have determined that the long-standing workplace tradition outweighs employees' more recent requests for flexible scheduling. According to Dowling, "Companies have long enjoyed financial success with such arrangements." This is because these company executives were nurtured in an atmosphere where they could interact with people in person and are thus the most knowledgeable about it.
A restoration to the pre-pandemic framework has also been pursued by several other businesses. According to Dowling, these are industries that frequently demand both on-site and remote personnel. She continues by saying that because leaders want to prevent team imbalances, they frequently urge everyone to work in person, regardless of whether they were able to complete their tasks online thanks to lockdowns. Executives desire an equal playing field in the healthcare, agricultural, and aviation industries. The justification is that everyone should be on-site if certain employees must be there to offer support.
Neeley claims that many top executives are ultimately concerned that the elimination of in-person working may have an impact on their corporate objectives. "Leaders claim that due to workplace culture, they must occasionally pull employees back to the office. They are concerned that social relationships may be lost in virtual environments."
Neeley continues that changing organizational structure is frequently necessary to implement flexible, remote, and hybrid working patterns while establishing workplace culture. It can be challenging to alter the way teams interact with one another and use technology on a daily basis while simultaneously providing services to consumers and clients within a new workforce structure. For some leaders, going back to old habits might be simpler at times.
Neeley claims that in addition to the difficulties of fostering employee flexibility and organizational culture, some managers are reluctant to make accommodations because they worry about how it would affect their leadership. As a result, Dowling continues, "many executives sense a loss of control, that they're losing a controlled atmosphere in which people are physically present in the workplace," which can put them in uncomfortable gray areas regarding how to assess productivity in virtual environments.
Neeley contends that trust is at the heart of not allowing employees flexibility. "There is a lack of faith in the leadership process necessary in this new world of work, in addition to not trusting employees that they would continue to do their job away from the boss's eyes."
A prospective change?
Of course, not all businesses have established firm boundaries on the flexibility problem. According to Dowling, there has been variety between businesses and even a little bit of progress towards autonomy in those more conservative areas, such as certain financial organizations providing hybrid working arrangements. (In extreme circumstances, some businesses, notably in the computer industry, have even taken well-publicized steps to make their operations completely remote.)
However, there will generally still be a gap. Employers and industries are more inclined to provide employees with autonomy when they are flexible and free of antiquated procedures. For instance, a global organization may take longer to restructure its corporate structure to provide workers with freedom while retaining commercial objectives, but a startup organization can more rapidly shift to a wholly remote setup. Some of these bigger firms are reluctant to, or outright refuse to, change their office design since it can be a difficult undertaking.
However, some of the decisions these rigid corporations are making may just be a temporary band-aid rather than a long-term remedy, according to experts. Experts claim that, in the long run, there are indications that raising compensation may have declining returns as opposed to expanding freedom. According to Dowling, "We have seen via the Great Resignation that some people cannot be compensated enough to continue working long hours in the office when they can work elsewhere with greater freedom." Only a tiny and decreasing skill pool will be attracted if employers continue to base hiring decisions purely on salary.
As a consequence, even while they won't yet yield a mile, some of these firms are beginning to bend the knee to employees. According to Dowling, the demand to give staff liberty will persist even if the economic outlook worsens. "Employees are still feeling empowered to resign, even when organizations start to reduce their budgets and revise their growth expectations. Employers must figure out a way to give more flexibility if that doesn't change."
Neeley thinks more businesses are beginning to change their minds after initially being opposed to giving employees flexibility. She uses JPMorgan Chase as an example, which recently decided against reopening its full-time office and will now employ 40% of its personnel in a hybrid arrangement. "We're already observing businesses having trouble regaining their desired levels of employee return."
Neeley predicts that more businesses will eventually use accommodative and adaptable rules. "Ordering everyone back to work with rigorous procedures in place is no longer conceivable; Otherwise, everyone would have returned and we would have moved on. But the workplace has evolved.