The latest LinkedIn Workforce Confidence Index on remote work shows that remote work is on the rise, as more and more companies are recognizing the benefits of remote work. In the past two months, remote work’s slump has reversed, and the popularity of remote work has risen to 28%. The survey results, based on a quantitative online survey distributed to LinkedIn members via email every two weeks with roughly 3,000 to 5,000 U.S.-based members responding to each wave, are a clear indication that the return to office drive is reversing. I speak to 5-10 leaders every week on issues relating to hybrid and remote work, and I can affirm that my conversations with these leaders resonate with the findings of the survey.
Remote Work is on the Rise
The survey results showed that in November 2022, there was a 30-point gap between the share of professionals working onsite (55%) and those working remotely (25%). However, now, the divergence has narrowed to just 22 points, with remote work’s popularity rising to 28% by January 2023. Hybrid work is now at 18%, rising from 16% in November 2022. The share of professionals working onsite has decreased to 50%. Thus, all that change came from the decrease in the number of people working onsite, and an increase both in remote and hybrid work.
Interestingly, the remote work percentages vary, depending on the size of an organization. The highest percentage of remote work (33%) was at large organizations of 1,000 or more employees, while the number drops to 26% of professionals at small organizations (1 to 200 employees) and 27% for professionals at medium-sized organizations (201 to 1,000 employees).
Reversing the Office Return: A Very Public Case Study
What does that reverse look like? As an example, consider Elon Musk. He’s well-know as a critic of remote work. He claimed that those working remotely only “pretend to work” and are simply “phoning it in.” Thus, he forced all employees at Tesla and SpaceX back to the office, and banned remote work at Twitter upon taking it over in early November.
Yet, as part of ongoing cost-cutting measures under Musk, Twitter shut down its Seattle offices and Singapore offices, instructing employees to work remotely. What led to him changing his mind? It’s the costs associated with the company’s Seattle and Singapore offices, including rent but also services such as cleaning and security.
The fact that Musk – an extreme skeptic of remote work – acknowledged its cost-cutting benefits illustrates the future of remote work for the US economy. It highlights the misleading nature of many headlines that claim an impending recession would lead to the end of remote work, since a cooling labor market will give executives more control to require employees to return to the office. That’s because many employees prefer to work remotely and most executives want their employees in the office.
In times of economic growth, executives have more freedom to make decisions based on their personal preferences and intuitions. But during a recession, they may need to hunker down, be more disciplined, and rely on data to make decisions that make the most financial sense for the company – like Musk choosing to have Twitter staff work remotely for the sake of cutting costs. This focus on profitability over personal preferences benefits remote work.
The Benefits of Remote Work
Remote work offers a multitude of benefits, including increased productivity, lower overhead costs, and improved work-life balance. Remote workers have the flexibility to work from anywhere, at any time, and can adjust their schedule to fit their personal needs. This results in increased job satisfaction and a reduction in stress levels.
With remote work, companies can access a larger pool of talent and can hire the best workers, regardless of their location. This leads to increased innovation and competitiveness, as companies can tap into the expertise of the best workers in the world.
Remote work also helps companies save on overhead costs, such as rent, utilities, and office supplies. For instance, one of my clients, a middle-market financial services company, was able to save $13,000,000 per year on overhead costs after transitioning to a flexible hybrid model of most people in the office one day a week and some people working full-time remotely, from its previous approach of everyone working in the office 3 days a week. This savings came from letting go of about half of its office space and associated costs.
A small design firm was able to increase its competitiveness and innovation by embracing remote work. The company was able to access the best talent from around the world, leading to increased creativity and a higher quality of work, while paying less in payroll. The company has since seen increased growth and success, and at the same time lower costs.
The increase in remote work is a clear reversal of the return to office drive. Companies are recognizing that remote work is not just a temporary solution to the pandemic but a long-term, sustainable solution that offers a multitude of benefits. With the rise in remote work, companies can continue to thrive and succeed, even in a challenging economic environment.
The latest LinkedIn Workforce Confidence Index on remote work shows that remote work is on the rise, and the return to office drive is reversing. Companies are recognizing the benefits of remote work, including increased productivity, lower overhead costs, and improved work-life balance. With remote work on the rise, companies can continue to thrive and succeed, even in a challenging economic environment. If you’re a manager, it’s time to embrace the increase in remote work and start reaping the benefits for your organization.
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