As the world continues to navigate the challenges posed by the ongoing pandemic, small and medium enterprises (SMEs) have been faced with a particularly difficult economic environment. A new study by Vistage, published in January 2023, reveals that despite these challenges, 60% of SME CEOs are planning to increase headcount in the year ahead, with only 7% planning on reducing headcount. According to Vistage Chief Research Officer Joe Galvin, this is a significant shift from the trend of big companies making headlines with layoffs, as small and medium business CEOs are reluctant to lay off their hard-won new employees.
One key reason for this shift is the recognition that hiring challenges are impacting the ability of these businesses to operate at full capacity. With 61% of CEOs saying that hiring challenges are a major concern for their ability to operate effectively at full capacity, it’s clear that the availability of workers will remain tight, regardless of how the economy fluctuates. This is where hybrid work comes in.
Hybrid work, which combines remote work with in-office work, offers a way for SMEs to access a wider pool of talent and hire the best people faster. Consistent with prior quarters, 60% of SME CEOs are offering remote work options in order to attract and retain top talent. 5% have not yet implemented remote work options, but plan to implement them in 2023. This not only helps these businesses to operate at full capacity, but it also allows them to tap into the benefits of diversity and inclusion that come with a more dispersed workforce.
So what explains the commitment to remote work by SMEs? First and foremost, hybrid work allows businesses to access a wider pool of talent. This is particularly important in today’s tight labor market, where finding and retaining top talent can be a challenge. By offering remote work options, businesses can tap into a more diverse pool of qualified candidates, including those who may not be able to relocate or who may prefer to work from home for personal or professional reasons. This can help businesses to attract and retain top talent, even in a challenging economic environment.
Another reason why hybrid work is gaining popularity among SMEs is that it allows for greater flexibility and work-life balance. Many workers today are looking for more flexibility in their work arrangements, and hybrid work provides a way for businesses to meet this demand. By offering both remote and in-office work options, businesses can give employees the freedom to choose the work environment that best fits their needs. This can lead to increased job satisfaction and productivity, as employees are able to find a better balance between their work and personal lives.
Hybrid work can also have positive impacts on the environment. With more people working remotely, there is less need for long commutes and office space. This can reduce carbon emissions and other environmental impacts, making hybrid work a more sustainable option for businesses.
Of course, there are also potential drawbacks to hybrid work, and it’s important for businesses to consider these carefully before making the switch. One potential downside is that it can be more difficult to maintain a sense of teamwork and collaboration when some employees are working remotely. To mitigate this, it’s important for businesses to invest in the right technology and communication tools to ensure that all employees have the support they need to stay connected and productive.
Another potential drawback is the risk of burnout and overwork. With the blurring of boundaries between work and home, it can be harder for employees to switch off and take breaks. It’s important for businesses to set clear expectations around work hours and to encourage employees to take the time they need to rest and recharge.
One challenge to remote work lies in the principles of behavioral economics and the role of cognitive biases. Behavioral economics is a field that focuses on the ways in which people make decisions, and it has shed light on some of the underlying reasons why people might be resistant to change. One of these reasons is known as the status quo bias, which refers to the tendency to prefer things to stay the same. When it comes to work, this can lead people to resist change and cling to the familiar, even if it’s not in their best interest.
Status quo bias is an example of one of many cognitive biases, which are systematic patterns of deviation from norm or rationality in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion. These biases can lead people to make judgments and decisions that are not based on evidence or logical reasoning, and they can be particularly pernicious when it comes to hiring and retention decisions.
By embracing hybrid work, SMEs can overcome these biases and make more rational, evidence-based decisions about hiring and retention. By opening themselves up to a wider pool of talent, they can access a more diverse and qualified workforce, which can lead to better outcomes for the business as a whole.
In my work helping companies develop their hybrid workforce strategy and transition to hybrid work arrangements, I often find that leaders tend to have an exaggerated perspective of the problems associated with hybrid work. Once they learn about how to implement a hybrid-first, team-led model, instead of shoehorning traditional office-centric methods of collaboration into hybrid work, they find that hybrid work helps them improve productivity and retention while cutting costs, without harming teamwork, innovation, or organization culture.
In conclusion, the Vistage study shows that SMEs are increasingly turning to hybrid work as a way to access a wider pool of talent and increase flexibility and work-life balance. While there are potential drawbacks to this approach, careful planning and the right tools and strategies can help businesses to overcome these challenges and reap the many benefits of hybrid work. If you’re a business manager or HR professional considering making the switch to hybrid work, it’s important to carefully weigh the pros and cons and to invest in the right tools and strategies to ensure success.