What does a recession mean for workers battling to get back into their jobs

People enter the Goldman Sachs headquarters building in New York, United States, on Monday, June 14, 2021.

Michael Nagel | Bloomberg | Getty Images

The long-running employee market has made it difficult for employers to take control and force remote workers back into the office.

But times may change.

Amid many business challenges ranging from market volatility, rising inflation, revenue lags, and rising risks of recession, companies are slowing hiring and, in some cases, letting workers go.

Meta, Twitter and Uber, the parent company of Facebook, are just some of the companies that have scaled back their plans for new employees. CEO of Uber Dara Khosrowshahi Written in an email to employees That the company “will treat hiring as a privilege and be thoughtful about when and where to add headcount.” META spokesperson For CNBC that “In light of the expense guidance provided for this earnings period, we are slowing its growth accordingly.”

Carvana and Robinhood are just two of the companies that have gone through recent hiring schemes that have now let workers go. “We have determined that making these cuts to Robinhood employees is the right decision to improve efficiency, increase our speed and ensure that we are responsive to the changing needs of our customers,” said Robinhood CEO Vlad Tenev. Wrote in a blog post Announcing that the company would be laying off nearly 9% of its 3,800 employees.

Netflix just laid off 150 workers.

The rapidly changing employer and employee dynamics could give companies ammunition to take a tougher stance against the full-time work-at-home arrangements that many employees have pushed into, according to company policy experts. In fact, they say, more companies are likely to start putting pressure on employees to return to the office — at least a few days a week.

“The hybrid workforce is not going to disappear, but the situation in which employees refuse to come to the workplace at all is unlikely to persist,” said Johnny C. Taylor, Jr., president and CEO of the Society for Human Resource Management.

Before the pandemic, about 10% of the American workforce was working entirely remotely, according to SHRM data. “By the end of 2024, we think the number of fully teleworkers will increase to about 20%. But that still means 80% will be working in the office in some way,” Taylor said.

Since the Bureau of Labor Services began publishing the JOLTS report in 2000, there have been two recessions with very similar trends in employment, one in 2001 and one in 2007-2009. What makes the current macroeconomic environment different, according to Jenny Walden, workplace expert and chief information officer at DailyPay, a leader in on-demand wages, is that if a recession looms, the Fed will raise interest rates dramatically, as opposed to 2001 and 2008, as the Fed was cutting interest rates to zero. In addition, employment opportunities have been twice as high as they were before the last two recessions.

However, the Bureau of Labor Statistics recently reported a post-pandemic drop in remote work of 7.7%, less than half the level it was a year ago. “We expect this number to continue to decline, with or without a recession,” she said.

“Employers are more likely to ask you to meet them halfway,” Taylor Jr. said of job site flexibility, but the halfway point may be defined by employers differently—three days in the office, two days at home; Two days in the office, three days at home. Some companies may specify it as four days in the office.

Recent data from New York City shows some shifts in working arrangements, but the resilience of the hybrid.

While Wall Street banks such as Goldman Sachs and JPMorgan Chase have been adamant about getting people back to their desks full-time, other companies have taken a more employee-centric approach, either letting employees choose where to work, or not establishing a policy that requires a certain number of days in the office.

As of mid-April, 38% of office workers in Manhattan were in a physical workplace on an average weekday, but only 8% were in the office five days a week, According to the New York City Partnership. The share of remote office workers completely fell from 54% in late October 2021 to 28% in late April. Even without factoring in the potential for a recession and less abundant jobs, return-to-office rates are expected to rise after Labor Day, with nearly half (49%) of office workers on average weekdays in September, with the largest bucket ( 33%) on three days a week.

As more companies begin to welcome employees on a voluntary basis or ask them to return, many are facing greater resistance than expected.

Ford, for example, was Surprised About how many employees returned to the office once the option was available, particularly given employee surveys that indicated they wanted a mix of remote and in-office work.

“When we opened our doors on April 4 to our employees to welcome them back into the workplace – those who wanted to come – the numbers that actually returned to work were lower than we expected,” Officer Kirsten Robinson said during an interview. CNBC’s work default event.

It was David Solomon, CEO of Goldman Sachs privately paid Workers are to redo the majority, if not all, of the week’s working days, describing this era of working from home.”deviationSpeaking to CNBC’s David Faber earlier this month, Solomon said the bank’s personal attendance at its US offices ranged from 50% to 60%, down from the previous pandemic figure of nearly 80%.

“We want people to come together in general,” Soliman told Faber. “It’s going to take time, you know; behavioral shifts generally take time, and I think over the next couple of years our organization will generally come together.”

The job seekers market is still

Right now, it’s still very much the employee market, so many companies still walk a fine line when it comes to flexibility. Some companies, for example, formally require employees to work in the office three days a week, but they don’t have a hard time dealing with those who only come in for two days.

“It’s really hard to go back to something so restrictive once you have more freedom,” said Laurie Dunn, founder of the Presidents Leadership Council, a forum for small business bosses, owners, and partners.

Companies are particularly concerned about muddying the boat, given that a record 47 million people left their jobs in 2021, according to the Bureau of Labor Statistics. Gartner predicts that the annual voluntary turnover of employees in the United States is likely to jump about 20% this year from the annual average prior to the pandemic, which means that 37.4 million people will leave their jobs in 2022, according to the research and consulting firm. Moreover, the labor market remained very tight as the number of job opportunities exceeded the pool of available workers 5.6 million in March.

“Companies are facing a lot of resistance to getting people back to their offices,” Dunn said. “When the job market changes back into the employer market, they may be more powerful, but I don’t think there’s any way to do that now.”

Taylor said many companies, however, are losing patience with demands for employees to work entirely remotely. He took the example of Apple, which began in April requiring corporate workers to come in once a week. The company earlier this month increased that up to two days a week and the plan required three days a week starting May 23.

This policy, which also allows employees to work fully remotely for up to four weeks a year, has met with resistance among employees. the group published An open letter, which has garnered more than 3,000 signatures, denouncing the release of “strict policies”. Apple also lost a top AI executive to Google, which withdrew based on a return-to-work policy. While the company could stick to its guns, it did Her plan was temporarily delayed Requires three days in the office, citing Covid concerns. The two-day requirement is still valid.

For many companies, being in the office is an important part of their culture, Taylor said. Other employers will also be more willing to say, “If you don’t like what we offer, find another place to work,” he said.

Currently, several companies including Amgen, Clorox, DoorDash, Spotify, Splunk, and TIAA continue to offer hybrid and remote options to eligible employees, often depending on the role. These companies say that many employees continue to choose to work at home, at least for some time. Many companies say their policies are under constant review.

An Amgen spokesperson said: “We have no plans to change at this time, but will continue to seek feedback from our employees and make any necessary adjustments.”

“Entry into the office remains voluntary at this time, unless a role must be performed in the office,” said Kristen Robinson, chief human resources officer at Splunk. “We expect teams to decide how they will work together and when to meet in person,” she said.

Spotify, which gives employees the option of a workplace, said it will conduct a two-year research initiative to increase understanding of the impact of working from home on energy, innovation, collaboration and well-being.

Where the bargaining power will shift between the worker and the boss

As for relative bargaining power, there is no doubt that workers today are benefiting from the unprecedented labor imbalance. Recession means fewer new jobs for workers, but the job market currently has roughly two vacancies per unemployed person, giving workers significant leverage to pick and choose the career opportunity that best suits them.

“This affected everything from base salary to bonus signing to remote working status,” Walden said. “As the imbalance between supply and demand for labor diminishes, it will undoubtedly affect bargaining power.”

But the degree to which the equilibrium strength changes may not be as significant as it has been in previous recessions, according to Richard Walquist, president and CEO of the American Employment Association. “Employers in the country were dealing with skills shortages before COVID caused the latest recession. Workers with the skills that are in high demand today are likely to rise even when the economy turns into a recession,” he said.

William Chamberlain, jobs expert and head of marketing at Hirect, said job seekers are likely to receive fewer offers in the coming weeks and months as companies tighten their belts and become more eager in bringing in new talent, but he doesn’t think workers will lose out. The foundation they have gained over the past two years.

“Workers will not be eager to simply let go of this equilibrium, and employers must realize that satisfied workers are more loyal and productive than their disgruntled counterparts. In other words, it is too early to get a job out of fear. Employment stagnation or not, job should be stagnant or not,” Chamberlain said. Researchers should keep their expectations high and not lose themselves.”

This includes areas where employers are becoming more employee-focused, from the types of benefits they offer workers, to signing bonuses and promoting flexibility in the workplace.

“While login bonuses may dwindle, employers will continue to compete aggressively for qualified talent. There is no turning back. Economic cycles happen. Workers will continue to benefit from a renewed focus on employee engagement,” Walquist said.


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