Essential Remote Work Considerations for U.S. Companies
Remote work had become essential in the U.S. during the “shelter in place” COVID-19 shutdown. Now, with more people working from home, many employers are considering making remote work a permanent option. Per a recent Gallup Poll, six in 10 managers say they will allow employees to work remotely more often than they did before the pandemic.
The need, and in some cases, the requirement to work remotely for white-collar jobs during the pandemic has changed the workplace. “Many temporary work-from-home policies are being adapted by enterprise companies into longer-term workplace strategies,” says Michael S. Wyatt, SIOR, executive managing director at the Tenant Advisory Group at Cushman & Wakefield, a commercial real estate services firm.
“The percentage of the workforce that will remain at home is unclear – larger enterprise companies could be implementing new standards that will permit up to 20% to 30% of their workforce to continue at home,” Wyatt says. “Many of these companies have invested in more robust IT and ergonomically designed furniture to keep employees connected and comfortable at home.”
As more organizations consider work-from-home (WFH) guidelines, employers need to consider how this change may affect their hiring and workplace policies. Although the effects of remote work are still unfolding, here are some things to consider before taking the plunge.
Filling Talent Pipelines
Companies that allow employees to work remotely full-time or most of the time can expand their geographic reach for hiring new talent. Recruiters who’ve struggled to find enough candidates to meet a position’s basic requirements may find better prospects in other or nearby locations. For companies with diversity initiatives, expanding its search area to different parts of the country may lead to finding more diverse candidates.
While a WFH policy can save money in the future, as companies may no longer need to maintain office space or can at least reduce some overhead expenses, the WFH trend also raises questions about the organization’s salary structure. The market value of a position’s salary differs across geographies, even when other factors – skills, experience and education – remain the same. When employers are sourcing talent outside of their local labor market, they must decide whether compensation will be based on the company’s location or that of the candidate.
In addition, some tech giants, such as Facebook, have moved to reduce pay by a specified percentage for those who desire permanent remote work. This is still a controversial topic, but if pay becomes impacted due to remote work options, this will slowly impact salaries by occupation and by location.
For instance, let’s say a recruiter is searching for a front-end software developer who has a bachelor’s degree and two to four years of experience. Using a talent acquisition tool like LaborIQ® by ThinkWhy, a recruiter would see that a candidate meeting these qualifications in the Chicago area would command a salary of $89,061, while a similar candidate in the Orlando area would have a recommended salary of $67,520. With the more-than-$20,000 difference between salaries, an employer interested in expense saving on expenses may choose the Orlando candidate, assuming both are an equal match and company fit.
When recruiting across markets, employers will want to consider whether a location will have a sustainable supply of talent. Growing organizations will want to focus recruitment initiatives on locations that have enough job growth and wage growth to attract a growing population of prime working-age candidates.
Productivity & Engagement
Working remotely may or may not improve employee engagement at work. There are two camps debating the value on engagement versus flexibility. However, COVID-19 created an unprecedented push toward remote work while also introducing new stressors, changing the nature of remote work’s benefits and impact on employees. The percentage of people in the U.S. working remotely skyrocketed from 31% to 62% between mid-March and April 2020. Since mid-March, people have experienced stressors unrelated to work – parenting and homeschooling children, loneliness and adapting to living through the changes of the pandemic. Anxiety has increased during the same period, reaching a high of 68% of remote workers expressing feelings of stress, according to Gallup.
Without these distractions, many workers see improved work productivity. A 2019 survey by Airtasker found that remote employees worked 1.4 more days every month, or 16.8 more days every year, than people who worked in the office. What holds true – both before and during the current pandemic – is that workers who have the option to work from home enjoy avoiding long commutes and constant interruptions that often occur in a physical workplace.
They also like the flexibility that working from home, even part of the time, gives them. Gallup found that 37% of employees who work from home half the week report being actively engaged, compared to 30% who spend less than a third of their time working remotely. However, having in-person interaction with coworkers does matter and certainly has an impact on company culture. With no time in the workplace, employee engagement drops up to 30%. The optimal time to work from home appears to be between three to four days per workweek.
Although remote work had been on the rise prior to the pandemic, companies without a WFH policy will need some time to assess impact on employee productivity, resource requirements and keeping workers connected and collaborating. Today’s workforce and climate require companies to think about how they encourage camaraderie, mentoring and other social connections to create team engagement. To this end, Mark Zuckerberg of Facebook, after deciding recently to move more roles to permanent remote work, said the company will look for online alternatives to offline team-building. Instead of monthly leadership dinners, for instance, Facebook is hosting unstructured online chat sessions.
Fully replacing in-person activities with remote options can be tricky and requires creativity, as Facebook’s example illustrates. Some roles and activities will likely still necessitate in-person interaction. Could C-suite roles convert to WFH when their jobs have traditionally required travel? Some of these questions are still unanswered.
“The culture of smaller and entrepreneurial companies that thrive on in-person energy may not embrace a high percentage of work-from-home employees,” says Wyatt of Cushman and Wakefield. “The jury is still out. There’s a thirst for getting back into a rhythm, for collaboration and mentorship. No one knows for sure, except that change is coming.”
Recruiters and hiring managers may see more interest among job seekers who want the flexibility that remote work allows. This is especially true in many white-collar, office roles. Employers who embrace an adaptive approach to hiring in an evolving workforce will benefit in the long run, attracting talent whose expectations and workstyles may have shifted.
LaborIQ by ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to cities, industries, occupations and business across the U.S.