Is there a tectonic collision in the making as employers require employees to return to the office, if not full time, then several days a week? There just might be. Being able to use technology to work just about anywhere through an internet connection provided a taste of freedom for many. And, they do not want to give it up. Companies across the board report employee shortages, nationally there may be as many as 10 million job openings.
“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” – Socrates.” (1)
Companies could be facing a rebellion of sorts in the near future against coming in to the office at all, never mind several days a week.
Bargaining power now lies in the hands of individuals who are highly skilled and consequently in demand in the market. The dilemma for individuals is whether they will give up their new found freedom or risk taking a chance at higher salaries and benefits – or unemployment.
If you are a skilled knowledge worker, your COVID-19 experience is most likely much different from those in less knowledge-based sectors. You had a job and experienced freedom from the daily commute and associated expenses at the same time.
The COVID-19 pandemic was a shock to the world’s economic system. In the United States, according to Bureau of Labor Statistics data, the civilian unemployment rate spiked from 3.5% in February 2020 to 14.8% in April 2020.(2) While percentages provide a readily understood and common denominator measure of change, they are sterile by lacking something better understood in human terms.
A more compelling measure is the level of civilian employment – 158,732,000 people were employed in February 2020. The cost in human terms was severe, In April 2020, there were 133,370,000 remaining in the labor force.(3)
A study of COVID-19-related telework based on a survey of 424 teleworkers in the U.S. over the summer of 2020 noted that the pre-pandemic participation in telework was 8% for all employees. In August 2020, the Bucknell study cited U.S. Bureau of Labor Statistics data indicating 24% of all employees were teleworking.(4)
The rest of the story is that telework varied by occupation. People performing professional services, management, business, and financial functions were able to telework at almost twice the percentage; 44% – 46% of the overall level. (5)
Sharping the focus by calculating percent of telework by industry rather than by all employed, provides a stark view when compared to less knowledge-driven sectors. Fifty-eight percent of those employed in finance and insurance and 57 percent employed in professional and technical services teleworked in July 2020. Just seven percent of those working in accommodation / food services and 6 percent in agriculture teleworked. Telework in service occupations, construction and maintenance was 5 percent. And lower yet in occupations such as transportation at 4%.(6)
Adding to those who outright lost their jobs, and those who were able to continue working in telework status, one can add the labor turnover factor. In April 2020, it was reported that slightly over 2 million people voluntarily quit their jobs. A year later the number of voluntary-quits was reached almost 4 million employees.
Apparently, working has become a seller’s market, skilled people are looking for higher wages and flexibility – and are changing employers at an unprecedent rate.(7)
COVID-19 created conditions for innovation and further disruption. Many companies are banking on the attractiveness of a hybrid remote-work model, a combination of remote and in-office work.
However, there is a new wrinkle that may undermine this approach. Reportedly, companies are spending big on Information Technology solutions to enable remote work, with estimates of over $300 billion spent in 2020 and even more in 2021.
Technology start-ups are also working to fill the gaps affecting employee engagement and camaraderie by offering new solutions to enrich employee experience by better mimicking the office environment interpersonal experience – remotely. Better connecting remote staff with their colleagues while working is the goal.(8)
While millions lost their jobs in the Spring of 2020 due to COVID-19, millions more began teleworking as a safety measure. Reports vary, but in April 2020 one reported percentage of employees teleworking was approximately 70%.
As of June 2021, a survey of business leaders reported that 70% expect employees to return to their offices, if not full time, in the last quarter of the calendar year.
This expectation is not without risk, as another survey of full-time employees reported 42% that if their employer does not continue telework options, they will find a company that does.(9)
The healthcare sector is reportedly offering significant sign-on bonuses, as much as $30,000 as well as referral bonuses, as much as $15,000. The challenge for hiring companies is attracting, and retaining skilled staff in a rapidly changing and competitive market.(10) The challenge for individuals is making risk-based decisions on opportunities to further careers.
It is not only healthcare, other sectors are offering to pay for college education for their employees. Walmart recently announced it will pay 100% of college tuition and books for associates.(11) Target also announced it will pay for college tuition for all employees in the United States. (12)
If signing and referral bonuses reflect skill scarcity in the market. Other economic news foretells price increases across the board, with the Producer Price Index reporting an increase of 7.3% for the 12- month period ending in June 2021, the largest increase in over 10 years. The Consumer Price Index was not far behind, registering a 5.4% increase in the same 12-month period and the largest increase in 13 years.(13)
One conclusion is that the cost of just about everything is increasing, and that includes the cost of skilled employees. Businesses need to invest more in attracting and retaining employees. With the cost of goods and services increasing at rates not seen in a decade or more, those with in-demand skills might be looking for higher wages, more attractive fringe benefits, and overall compensation – on top of 5-10% increases in the cost of living.
Telework is not going away, but expectations about it might be changing soon. Regardless of how telework plays out in the future, companies face tremendous uncertainty, and individuals face both uncertainty and opportunity in the job market.
Uncertainty signals risk, for those with a higher risk appetite this might be a lucrative moment in time. The choice is yours, get informed and choose wisely.
Bio:
His career has been enriched through education, training and experience beginning in the early 1970’s as an investigator, and later as economist, statistician, operations researcher, adjunct professor, business owner, newsletter publisher, consultant, quality award examiner, risk and QA manager, and contractor.
The common thread throughout this time has been gathering, reducing, assessing, summarizing, and presenting findings to enable decision making. With the arrival of COVID-19, it was recognized that methods and tools used for decision making in a business setting, particularly involving risk, can be adopted to individuals.
Toney is also an aspiring business fiction writer where his future works will be published on vucanites.com.
References:
(1) Vantage Circle Blog, accessed 14 July 2021, https://blog.vantagecircle.com/quotes-work-life-covid-19/.
(2) Graphics for Economic News Releases, Civilian un-employment rate, seasonally adjusted. https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm. Accessed 19 July 2021.
(3) Graphics for Economic News Releases, Civilian employment, seasonally adjusted. https://www.bls.gov/charts/employment-situation/civilian-employment.htm. Accessed 19 July 2021.
(4) Eddy Ng, PhD, and Andrew Lam, MA. Freeman College of Management, Bucknell University, COVID-19 Telework Study Report. https://www.bucknell.edu/sites/default/files/college_of_management/covid-19_telework_study_report.pdf.
(5) The likelihood of teleworking because of the pandemic varied by occupation. https://www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.
(6) Ibid.
(7) Zachary Halaschak, Economics Reporter. July 20, 2021. https://www.washingtonexaminer.com/news/great-resignation-haunts-employers-trying-recover-pandemic.
(8) Hannah Mitchell. Startups sprint to bridge gap between in-person, remote work, Becker Hospital Review. July 7, 2021 (article referenced a New York Times article – Work at Home or the Office? Either way there is Start-Up for That – from July 6, 2021). https://www.beckershospitalreview.com/digital-transformation/startups-sprint-to-bridge-gap-between-in-person-remote-work.html?origin=CIOE&utm_source=CIOE&utm_medium=email&utm_content=newsletter&oly_enc_id=9007B5480478B7T.
(19) Abigail Johnson Hess. There is no going back to the status quo’: what the return to the office will look like this fall. June 28, 2021. https://www.cnbc.com/2021/06/26/heres-what-the-return-to-the-office-will-look-like-this-fall.html.
(10) Molly Gamble, Job board searches for ‘hiring bonus’ have doubled: 6 things to know about this early incentive, Becker Hospital Review. July 6, 2021. https://www.beckershospitalreview.com/compensation-issues/job-board-searches-for-hiring-bonus-have-doubled-6-things-to-know-about-this-early-incentive.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=9007B5480478B7T.
(11) Walmart, Bentonville, Ark., July 27, 2021. https://corporate.walmart.com/newsroom/2021/07/27/walmart-to-pay-100-of-college-tuition-and-books-for-associates.
(12) Kaitlin Mulhere. Target Will Now Pay for College Degrees at More Than 40 Schools
August 4, 2021. https://money.com/target-employees-free-college-tuition/.
(13) Lucia Mutikani. U.S. producer prices post biggest annual gain in more than 10 ½ years. July 14, 2021.
https://www.reuters.com/business/us-producer-prices-surge-more-than-expected-june-2021-07-14/. See also https://www.bls.gov/news.release/pdf/cpi.pdf.