san francisco At Amazon’s workforce, tempers are currently boiling up. No, not because the group is experiencing one of the worst crises in the company’s history and is almost no longer making a profit. Not because the share price has collapsed by 30 percent. Or because CEO Andy Jassy laid off 18,000 employees.
The employees are outraged that they now have to come back to the office regularly. As of May 1st, Jassy recently ordered that “Amazonians” have to work at least three days a week from a company branch. No more working from home that has been in place for a year and a half. The boss argues that this will simplify cooperation and strengthen the corporate culture in times of crisis. Thousands of employees then complained in a letter of protest.
Other CEOs are also turning their backs on the pandemic’s generous “work from anywhere” rules. At the car company General Motors and at the coffee chain Starbucks, employees have had to work in the office at least three days a week since the end of January, as has the entertainment group Warner Bros. At competitor Disney, there is even a four-day attendance requirement per week.
At Goldman Sachs, two-thirds of the workforce is now working entirely from the office again – almost as many as before the pandemic, says CEO David Solomon, a self-confessed opponent of working from home. At competitor JP Morgan, half of the workforce has to spend the working week in the office, while the other half can continue to work from home for a few days. In order to measure whether the office requirement is also observed, both banks record how often the employees scan their ID cards in the office buildings.
The restrictions of the corona pandemic have disappeared from public life in the USA for months, and now companies are following suit. The turnaround at the software company Salesforce was particularly drastic: In 2021, CEO and founder Marc Benioff had promised that employees would be able to “work from anywhere” in the future. Last summer he also criticized companies that ordered their employees back to the office: Such “return to office” constraints would never work, he said at a conference.
But in the face of poor business and pressure from activist investors, Benioff has to backtrack. At Salesforce, there are now plans that the workforce will have to come into the office three to four days a week, depending on their position. Goodies such as a monthly “Wellbeing” day and trips to the company’s retreat center were also canceled for the employees. Instead of wellness, Salesforce is now under pressure to perform, they say.
The balance of power is shifting in favor of companies
One reason for the change is that the balance of power between employees and employers has recently shifted. Many tech companies grew so rapidly during the pandemic that they could not hire new employees fast enough and introduced generous “work from anywhere” regulations. Some companies advertised the four-day week with equal wages; others, like Meta and Airbnb, repositioned themselves as “remote first” companies.
The more flexible a company’s policies, the more attractive it appeared to be as an employer.
But that is over now. A recession is looming in the USA, and profits have recently collapsed for many corporations, especially Big Tech. At Salesforce, Amazon and Disney, the announcements about the new compulsory attendance came shortly after laying off thousands of employees.
At Goldman Sachs, too, employees have to go back to the office.
(Photo: Bloomberg)
It wasn’t a coincidence, says Andy Challenger of coaching firm Challenger, Gray & Christmas. Facing the threat of layoffs, employers see themselves in a stronger position to make demands, he told the Washington Post. “We are witnessing a moment where employers are feeling a shift in the balance of power.” At the same time, many employees feared they would be more likely to be fired if their bosses didn’t see them in the office regularly, says Kate Lister of market research firm Global Workplace Analytics.
Wendy Hamilton, CEO of the office software company Techsmith, told the BBC that the most recent office duty orders are sometimes also an attempt to expel employees – loosely based on the motto: If you don’t want to come back to the office, you can quit. An example of this is Twitter, where several employees left the company after new CEO Elon Musk temporarily lifted the “work from anywhere” rule. In such cases, companies save themselves expensive severance packages.
Fewer home-based jobs are being advertised
The professional network LinkedIn is also showing that the supply of “remote jobs” is falling. While such job advertisements accounted for a good 20 percent in March 2022, it was 13 percent in January.
Along with this, the occupancy rate in office space recently rose: for the first time since the beginning of the pandemic, it reached 50 percent again in January in the ten largest cities in the USA. But it fluctuates wildly throughout the week: Tuesdays and Wednesdays have emerged as the days when most companies want their employees back in the office.
But anyone who thinks that the labor market will look the same as before after the pandemic is likely to be wrong.
Nicholas Bloom, an economist at Stanford University, points out that the environment in the US has changed enormously in favor of working from home. Bloom has been researching flexible forms of work for 20 years. He points to long-term studies that show the percentage of workdays Americans spend working from home was just 5 percent before the pandemic; over 40 years this had hardly increased.
In March 2020, the number then jumped to more than 60 percent and has now leveled off at around 30 percent. “It should remain at this value in the future,” Bloom said recently in a Stanford University podcast. Working two or three days in the office, two or three days from home – that is the new norm.
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A recently published survey of the Flex Index by the software company Scoop among more than 3,000 American companies also speaks in favor of Bloom’s thesis: Half of them are said to have reintroduced compulsory attendance, especially for low-skilled workers. But just over 20 percent are pursuing a hybrid workplace model, and 30 percent continue to allow employees to work entirely from home. It seems that the majority of American companies have realized that the five days in the office from 9 a.m. to 5 p.m. are over.
Not only employees appreciate working from home – also from the point of view of the companies there is a lot to be said for a hybrid workplace model. The employees are happier. In a study co-led by Bloom, when a company allowed home working on a regular basis, the rate at which employees quit dropped by 35 percent. Employees value the flexibility of being able to work from home two or three days as much as a five percent salary increase.
At the same time, several studies show that working from home slightly increases employee productivity – but by exactly how much differs from study to study. Bloom estimates the increase at three to five percent.
In addition, working from home saves time that would otherwise be needed for commuting. According to a study published in January, this is an average of 55 minutes a day in the USA – although the savings vary enormously depending on the region of the country. The good news for employers: Americans spend 40 percent of this time saved, i.e. a good 20 minutes, longer working.
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