Back to the office
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It was the lead story in June 6th’s New York Times: “Historic Shift in Labor Force Favors Workers.” We are seeing a confluence of conditions that should cause new thinking in talent management.
Before the pandemic, the labor market was at full employment, as the economy continued its sustained growth, and the pool of workers between 20 and 64 started to shrink. In the past year. The Congressional Budget Office projects the growth in the labor pool for the rest of the decade to be 0.4% annually, half the rate of the past 20 years.
On top of these predictable trends, there are shockwaves caused by the pandemic. Middle and senior managers saw their wealth increase dramatically, reflected in equity and real estate value gains. And we learned a new way of working - at home, assisted by technology – which suits many lifestyles far better than a week in the office, daily commutes and frequent flying. These are causing highly paid employees to rethink whether or not they need to work.
Now, the vaccination level has surpassed 60% and businesses everywhere are planning the return to the office. The question is, are the employees willing to come back?
Part of employee reluctance is safety related. CHROs are working through protocols for mask-wearing and mandatory vaccination. This is a reasonable exercise in risk mitigation. But many employees will decide that they would just rather work from home, that WFH offers greater flexibility and that flexibility is becoming an entitlement.
I see companies heading for a reckoning, as they declare that they will be 100% office-based.
I’ve spoken to several companies that expect to get back to 100% office-based. Their rationales vary. A COO mentioned the investment in her company’s office space that she must see a return on. The President of a $20M business who personally has been coming into the office throughout the pandemic told me that he cannot be as productive at home and assumes that is the case for all of his workers. The CHRO of a $2B company said that they have a face-to-face culture.
Whatever the reason, these leaders have to be aware that a not insignificant part of their employees think differently. Employees recognize that the labor balance of power has shifted. They will find new places that provide them with the environment that fits the way they want to work, including an office at home.
The risk may be worth taking for companies that want to be “all in.” They will lose people, but they might find like-minded workers who will strengthen their culture. I just wonder if these leaders are taking a long-term view, whether they are anticipating the exodus of valued employees who want an at-home accommodation.
Those companies that opt to remain 100% work-from-home are also taking a gamble, unless they’ve determined that it is part of their cultural DNA. Without significant work-arounds, virtual offices face continuing challenges. Having facilitated strategy sessions on Zoom, I know how difficult it is to pull off brainstorming and other interactive group activities involving a dozen or more people. Building or maintaining peer relationships is also hard to do virtually; these happen through short, random meet-ups in hallways, lunch rooms, etc., not in scheduled 30 minute calls. The spontaneous connections where employees share what they are working on, build off of one another and create new innovations is one of the biggest casualties of the past year.
To me, a hybrid office model is a better choice. It treats employees like adults by offering them a critical lifestyle choice while underscoring the value of interaction among colleagues. It assumes that people can be as productive at home as they are in the office, that the time spent watering the garden or walking the dog is compensated by the lack of a commute or a later end to the workday.
Companies going hybrid may make the office mandatory Tuesday through Thursday, leaving the beginning and end of the week for individual work from home or virtual conferencing, if that is the employee’s choice. In some companies, even greater flexibility might be the rule; the office may become the place where people go when they will benefit from direct face-to-face interaction, not based on a calendar.
Decades worth of change in workplace dynamics happened in a matter of weeks in 2020. These dynamics won’t just revert back, because the boss says so. In a world where the employees hold an increasing amount of the power, corporate leaders are well served by listening to their wishes.
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