Remote Work, RIP?
Labor Day is here, and more bosses now want you back in the office, take it or leave it.
As we head into Fall, employee power—and remote work options— are receding. The labor market remains tight, yet many firms stuck with high office rents are starting to downsize their workforces and are issuing return-to-work mandates tighter than ever. Call it the Great Realignment. Middle class moms and caregivers, unite?
NEW YORK — For a long while now, Labor Day has marked the unofficial end of summer, triggering some nervous excitement (or dread) about having to start school again, or a new job, or a new work project full-time. And as always, it seems that for some of us, Labor Day arrives much sooner than expected (regardless of the long summer to-do lists we felt certain in May we’d have conquered by now.)
But go ahead. Just ask most working Americans you know, especially those with a desk job, what they want most after Labor Day, and odds are, says Gallup, they will say flexibility—and specifically, that they want even more control over how many hours they actually work and where their desks are located—(the kitchen? the home attic-turned-home office? the more affordable home they purchased last summer in New Mexico?) Moms with small kids and caregivers of aging parents, especially, want more say over when they can work, so as to be able to keep working at all.
Luckily for all of them, the American workplace has been, post-pandemic, a fairly flexible place. Since 2022, about half of U.S. workers have had “remote capable” jobs, and Gallup’s early 2024 data says that a majority of those jobs became hybrid, meaning that employees have been splitting time between home and office, avoiding sitting for hours on a freeway-turned-parking-lot—at least for a while.
But those days of Remote Work are about to get shorter—and less idyllic. For Fall 2024 and the start of the new year, expect a tighter squeeze on remote work and far fewer flexible work options. And this time? It’s not going to be part of a worker-powered trend like the Great Resignation, or the Great Renegotiation. This time, it’s going to be an employer-driven movement, called the Great Realignment, mandating tougher return-to-work (RTO) rules and initiatives designed to cut pandemic-era costs and get back to calling most, if not all, of the shots in the workplace without fear of losing too many workers in the process.
Fueling some of this switch is the wave of layoffs some companies have made so far this year to shed some of the costs wracked up during the pandemic and the past two years of recovery. According to a recent worker survey conducted by Resume Builder, the survey arm of The HR Digest, 70% of the 756 employers polled say they plan to increase or maintain the number of days employees are required to be in the office this fall and in 2025, with 93% of leaders surveyed saying employees should work from the office only. The survey follows the large number of employers who have already mandated an end to remote work, including General Motors, Disney, Walmart, Dell, Amazon, Meta, the United Parcel Service and IBM, among others. For most knowledge workers, the legacy of America’s remote work experiment may very well end up becoming little more than a flexible Friday next year—take it or leave it.
“We’re in an interesting economic moment where the balance of power is shifting back to employers from employees,” says Daniel Zhao, the lead economist at Glassdoor, an online firm which ranks overall company ratings to determine its annual, and influential, Best Places to Work Awards. Citing the recent round of high-profile layoffs, he said more companies have become more emboldened to downsize—and more willing to fire employees who insist on continuing to work from home, either full time or hybrid. Ava Martinez, a writer for The HR Digest, said: “Initially, there was worry that the lasting effects of the Great Resignation era would make employers afraid to lose their workforce, but now, many companies are optimizing the opportunity to tighten their policies and are hoping to let workers go if they do not willingly comply with the new regulations.”
Remote Control
This renewal by employers to get everyone back in the office should come as no surprise, analysts say. Corporate strategies designed to start phasing out most remote work began being tested last year, with mostly successful results. According to EY, fully remote work went from 19.55% of the American workforce in 2022 down to 1% last year, and while only 20% of workers were willing in 2022 to show up in the office two or three days per week, tougher company policies limiting remote work increased that to 34% last year. This year? More than 80% of companies now require employees to return to the office four or more days per week, but there will be some exceptions, EY says, to either recruit or keep high-level leaders. Just last month, although remote work has ended at Starbucks, the company’s new CEO will be working remotely when he’s at home in California.
But make no mistake. What’s motivating the Great Realignment isn’t being driven by concerns over productivity, despite earlier concerns about “quiet quitting” among younger workers. It’s clear that RTO mandates are often about justifying corporate investments in office space, not a lag in productivity. An overwhelming 80% of companies reported to EY recently that their white collar employees’ productivity has been “somewhat higher or much higher” during the past 24 months, with about 28% of leaders saying their employees are equally productive when they work from home rather than in the office.
Instead, one of the biggest drivers of employers’ new Great Realignment trend, leaders say—beyond any need to thin out their workforces or cut their losses—is a need to maximize their return on investment in real estate. Many companies are still stuck with stratospherically high-priced leases locked in before the pandemic, and to make them now more affordable, EY says, some companies are pushing RTO policies harder to help cut the costs of pandemic-era engagement programs, if not retire them completely.
“Now that the pandemic is over, it makes more logical sense to have everyone in one place rather than continuing to support a lot of work-from-home setups,” says Francisco Acoba, EY Americas Co-Lead of its Corporate Real Estate Consulting and Technology Practice. Additionally, Acoba explains, “Dark offices can create unintended doubts and uncertainty for both the workforce and the marketplace, even while all that cost is still being absorbed by corporate budgets.”
And that’s not all. There’s still a shortage of managers in many companies, he and other analysts say, who have the skillsets and mindsets needed to build, manage, supervise and support remote teams. “It’s still easier and less expensive for some companies to focus more on improving in-house culture and collaboration,” Acoba says. “Many companies are still trying to figure out what works best in digital environments, and some say that now that the pandemic is over, expanding or even keeping pandemic-era remotes at current levels no longer makes sense.”
The Post-Pandemic Challenge
But don’t expect all workers to give up on remote work entirely, at least not without a fight. Glassdoor’s Zhao says that despite some workers’ desire to return to the office, “hybrid employees are resisting being forced back” into full-time in-office work, and some of their work contracts, if negotiated as remote work, won’t be as easy to eliminate. Additionally, says Martinez, “many employers evidently perceive there are more benefits from having employees work from the office over any benefits from retaining employees who want or need to work from home at least some of the time.”
Writer Katherine Alejandra Cross wrote in an article for WIRED last year, that many people still working remotely are being pressured to quit or return to the office in some cases, and some are being inspired to start organizing their fellow workers. “Instead of being liberated from unnecessary drudgery, demands on their time have ballooned, they feel permanently on call and some can’t shake the sense that they’re working harder than ever for less pay,” Cross wrote.
A recent Wall Street Journal piece noted that remote workers are 35% more likely to be terminated than in-person colleagues, citing a Live Data Technologies analysis of more than 2 million white-collar workers. Partly in response to less in-office work, employers also are stepping up electronic surveillance, something employees don’t like. A study from Resume Builder found “96% of employers use employee monitoring software,” with a big jump occurring post-pandemic.
Says Matthew Certosimo, a partner at the Canadian law firm, Borden Ladner Gervais LLP, “There definitely is greater tension now over the return to work mandates being tried again across the United States and Canada. At the core of the employment relationship is this notion of control, which takes on a very different flavor when employees work from home,” he says. “Take overtime, for example. It’s hard when an employee is working from home and outside the direct control that an employer would ordinarily exert. We’re starting to see this concept of working from home, post-pandemic, being brought to the bargaining table by unions.”
The most recent case played out in Canada’s largest federal strike in years, he said, in which public and private unions sought to build remote workers into the collective bargaining agreement. More than 155,000 Public Service Alliance of Canada (PSAC) members working for the Treasury Board and Canada Revenue Agency opted to strike for 12 days, with the action only being brought to an end after agreements were made around wage increases and a “new language on remote work.” The union won its request to have “working from home” written into some of its contracts, plus another clause requiring management to explain their remote work decisions in writing.
American unions, however, are not yet fighting many remote work challenges, mostly because remote workers have yet to get organized at most places.
Remote, Not Distant?
It’s not all bad news. As the future of work continues to evolve and many of today’s companies continue to reconstruct themselves to adjust more fully to the advantages that a more digital workforce could deliver, EY, for one, insists that hybrid work will not disappear entirely.
A recent editorial in Forbes may have said it the best, says Martinez. “It claims that by 2028, we’ll see the end of RTO mandates —but not until many corporate workplace office leases come to an end. By then, companies may perhaps realize the meaninglessness of investing in an office space that gets little use, and see the value that remote work can bring in terms of new skillsets and mindsets, as long as you know how to manage them differently.”
Says Forbes’ Human Resources Council: “Unless management remains dead set on making their employees miserable, whatever the cost, there’s no reason to believe that RTO mandates will become nothing but memory by the turn of the decade.”
Maybe so. But until then, don’t make any bets.
Are you a remote worker on contract? Do you know someone who is? Happy Labor Day! Let us know how the Great Realignment is unfolding from your vantage point.