If the US job market continues to weaken next year, companies could stop allowing employees to work remotely.

Executives generally fall into two camps when it comes to working from home, which has increased during the pandemic as workers have gained leverage during a tight job market. Some believe it has benefits, such as happier employees, while others say company culture is built in the office.

“There’s genuine divergence between organizations,” said Melissa Swift, workforce transformation leader at consultancy Mercer. “You’re starting to see companies take sides.” With that said, it looks like remote jobs are here to stay. Gallup projects that about 75% of remote-capable workers will be hybrid or fully remote in the long term.

Here are the top reasons experts say remote work will continue in 2023:

Retention

Allowing remote work is crucial for retention. Hybrid work boosted employee satisfaction and productivity, reducing attrition by 35%, according to a study published this summer by researchers from Stanford University, the University of Chicago and the Autonomous Technological Institute of Mexico.

“Employees experienced new levels of satisfaction working from home, and it’s been hard for companies to justify backtracking,” said Caitlin Duffy, research director at consulting firm Gartner.

Meanwhile, the rotation has become a costly problem as rotation rates remain above pre-pandemic levels. In a labor market that remains tight, many companies cannot afford to lose talent. That’s especially true for high achievers, even if the economy takes a turn for the worse, according to Prithwiraj Choudhury, an associate professor at Harvard Business School.

“In any economic environment, the best talent always has outside options,” said Choudhury, who studies remote work.

Recruitment

El trabajo remoto abre el reclutamiento a un área geográfica más grande y un grupo de talentos más grande. Esa es una gran ventaja, especialmente para roles especializados donde los candidatos calificados son difíciles de encontrar. También brinda a los empleadores, como el Departamento de Asuntos de Veteranos de EEUU, que ha luchado para convencer a las personas de que se muden a Washington, una mejor oportunidad de ganar talento de los centros tecnológicos en la costa oeste.

Ofrecer flexibilidad laboral también puede respaldar las iniciativas de diversidad, equidad e inclusión de una empresa. Ese es especialmente el caso de grupos, como los trabajadores discapacitados , que a menudo quedaron excluidos del mercado laboral. Los padres que trabajan y las personas de color también han reportado enormes beneficios del trabajo remoto.

Recession Cost Cuts

Rather than reverse the shift to remote work, a recession could accelerate the trend because it can reduce the need for office space and help companies cut costs, according to Choudhury.

This summer, Yelp Inc. closed its offices in New York, Chicago and Washington with plans to put the savings toward hiring and employee benefits. Not long after, Lyft Inc. leased about half of its office space in San Francisco, New York, Seattle, and Nashville. Other major companies, such as Meta Platforms Inc. and Amazon.com Inc., have scaled back back office expansion plans.

Employees who are allowed to work from home are willing to accept a pay cut in exchange for greater flexibility and lower commuting costs. Work-anywhere policies also allow bosses to keep labor costs down by hiring in states, like Idaho, Louisiana and Kansas, that have lower costs of living.

Reversal risks

If a company takes a radical turn, executives risk damaging their reputation. Just look at Twitter. In an effort to shake up the company last month, new CEO Elon Musk ended the company’s remote work model, but so many employees opted for severance that he had to soften his stance to convince some employees to come back.

Maximizing leverage in this way is not a good long-term strategy, according to Ben Granger, chief workplace psychologist at Qualtrics.

“Future candidates can see feedback from employees who have left,” Granger said. “They can read the articles. It would be wise for the leaders to think about that.”

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