Is Remote Work Dead?
It was only a few years ago when working remote seemed all the rage. An endless stream of articles all proclaiming the end of big cities, traffic jams and office politics as Covid forced us all to stay home, and away from each other.
Remember the predictions, the future of work was from anywhere: home, beach, mountains or Mars?
All you needed was a laptop w/camera and an internet connection. And thanks to modern conferencing and collaboration technologies like Skype, FaceTime, Slack, Zoom, Google Hangouts and MS Teams the dream of remote work seemed at last a real utopian possibility. No more wasted time on the road to and from, no more expensive lunches, dry cleaning bills, or weekly gasoline fill-ups. No more politics or sleepy meetings: A dream come true for most of us.
But like the weather – times change. It’s been 4 years. And Covid is behind us.
What has come to be known as the largest Work From Home (WFH) era productivity experiment of all time — has ended, and the results are in. Your CEO wants you back, all hands RTO (Return to Office), or else!
Why now?
For many of us WFH is a woven part of our daily lives. And it works, or so we thought.
But in a recent letter to all Amazon employees CEO Andy Jassy officially ended the company’s hybrid flex schedule and ordered a full 5-day RTO work week. Jassy says being in-office strengthens culture, facilitates collaboration, brainstorming and creativity enhances innovation.
In response, the crew cries foul! The full-time RTO mandate is a broken promise, and management needs to reconsider the consequences. But Jassy, staunchly upright like a winning coach looking at a losing season is unfazed by distraction:
“We understand that some of our teammates may have set up their personal lives in such a way that returning to the office consistently five days per week will require some adjustments. To help ensure a smooth transition, we’re going to make this new expectation active on January 2, 2025.”
Huh? Yikes!
That sounds a lot like there’s little room for discussion and you best come back full time, or else don’t come back at all.
Sound too harsh? Too old school maybe? Turns out he’s not alone.
A new KPMG consulting firm survey (Jul-Aug 2024) of 1,325 CEOs in 11 countries revealed a whopping 80% of them believe their hybrid workforce will be nearly 100% back in the office full time over the next 3 years! And how is that working out?
If you ask the troops, the troops are not happy about it. They sound back with a simple question: Why force workers back to the office 100% full time when part time was good enough?
According to an Accenture global study 83% of global workers prefer a hybrid work model.
Doesn’t that mean that a full time 100% RTO mandate could backfire?
Some staffers say it’s Budget Season (corporate budgeting for 2025) and RTO is a quiet RIF (reduction in force), a chance to reduce staff via attrition rather than implementing more expensive layoffs next year.
Others, for starters cite the cost of going back into the office more specifically. Not only does working from home offer a better work-life balance, but it also saves workers a boat-load of real dough in monthly expenses.
If you do the legwork like I did for instance you’ll find the average US worker spends roughly $30/day to venture back into the office, including things like morning coffee, lunch, gasoline, dry-cleaners, car washes, personal grooming, etc, all averaged in.
As a result, a Full-time RTO costs on average $600 per month (20-days x $30) to work in an office full time. But that can also easily top $1000/month per worker in California where I live. Childcare and pet care alone can add hundreds.
That’s still $7,200-$12,000 each year in extra out-of-pocket expenses per staffer to join hands in the conference room once a day in order to prove they’re obviously happier, more creative, productive brainstormers inside a glass building. That’s a tough sell in my view.
So now what… ?
Well, according to Stanford Economist Nick Bloom it’s not a winner take all, the sweet spot is actually in the middle, and the research pans out. It’s the Hybrid Remote Workforce Model.
In Bloom’s research, the hybrid remote worker model which includes fewer than 4 days in the office showed a zero effect on worker productivity, and dramatically boosted employee retention rates. The results are essentially at odds with the Amazon decision, Bloom adding:
“If managed right, letting employees work from home two or three days a week still gets you the level of mentoring, culture-building, and innovation that you want.”
Which begs the only question, where’s the bullseye on the dart board? Is it two days or three?
Owl Labs, a remote video conferencing company in Boston produces an annual State of Hybrid Work report which surveys 2000 employees across various industries in the U.S. every year. And after you read their latest 2024 survey results you’ll say like I did, the answer is 3!
Three days in the office. That’s the ideal hybrid remote worker model that neither minimizes CEO concerns nor burns through employee trade-offs entirely. Each side gives a little.
It’s the perfect give and take compromise that every CEO should seriously consider during this budget season with an added thought.
Remote work is here to stay, and companies that embrace the model, without compromising efficiencies or profits will prevail as workers seek foremost a career that offers them life-balancing and cost saving flexibility.
And for those who deeply find the very idea of any RTO dreadfully life-ending, consider your financial contribution the good news… The Hybrid model will help local economies, local jobs, and local people.
Companies like coffee shops, flower shops, corner pharmacies, restaurants, dry cleaners, car washes, gas stations and all the rest do benefit substantially from the hybrid RTO.
When Covid shut down the US economy the loss to Main Street shops was devastating, and many small businesses hit hard have yet to recover pre-pandemic foot traffic and sales. So, in a real practical sense RTO mandates promise to throw them a life-line.
According to Statista statistics, 53% of all workers are working hybrid hours. Some say the figure is higher others say lower.
Nonetheless, if there are as noted by the Labor Dept (BLS) nearly 170 million total US workers and 50% work RTO 3-days per week we can estimate the total annual impact at stake in local sales based upon the monthly expenses each staffer will likely spend to return to the office… which averages $600/month. From here the math is simple.
85 million hybrid workers x 3-days/week (156 days/year) x $32/day = $424 Billion – at the low end.
That’s an eye-popping figure and a darned good reason to get people’s butts back behind bars.
Still. Employees argue that any management team demanding a 100% full-time RTO is all dollars and cents, and hasn’t put a figure to the inherent soft cost/benefits employees enjoy most.
And that looks bad.
So it seems the workforce is poised at the cross-roads. Is it the 5-day RTO mandate road ahead like Amazon is calling for, or the 3-day remote worker hybrid model?
I say, the evidence is in. CEOs and business owners should closely consider the ideal 3-day hybrid workweek schedule as they budget headcount for 2025. Especially as the model is quickly becoming a competitive advantage in the hunt for new talent.
In a nutshell, I believe the hybrid model is the future work, and is a solid middle-ground work/life balance compromise that both sides can live with, even Amazon.
Do you disagree?
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The most common remote jobs in 2023 (Forbes)
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Rick.
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About the author: Rick Andrade is an investment banker and market advisor in Los Angeles, Ca, where he helps CEOs and business owners buy, sell, and finance middle-market companies. Rick earned his BA and MBA from UCLA, along with his Series 7, 63, & 79 FINRA securities licenses. He is also a CA Real Estate Broker and blogs at www.RickAndrade.com on issues important to business owners. He can be reached at rickandrade.com.