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Ask any HR leader about the last two years and they will describe it as the most acute shift in focus and priority in their entire career.  They were asked to solve for remote work, have an answer for every post-pandemic employee scenario, reverse the Great Resignation and get employees back to the office.  Some companies relied on consultants to guide them (even though they were figuring it out themselves) and some chose to listen to their employees about what their “future of work” should look like.  

What is emerging is a focus on flexibility, employee engagement, hybrid/remote options and higher wages as companies struggle to attract and retain talent.  A new wrinkle is the effect of rising inflation offsetting workers’ wage increases while also forcing companies to look at more cost effective labor options, slowing hiring or rescinding offers.  Does this shift some power back to companies in the near term?  The second half of the year will be very interesting for the company:employee dynamic.

 

The death of 9-to-5

It is safe to assume that in many industries, the 9-to-5 is dead.  The pandemic merely accelerated what was happening anyway.  Family schedules have changed (mine have) over the last 30 years.  More is required of parents now to support their children in school and in sports.  As a personal example, I have carpool duties every day for both school and sports and volunteer hour requirements for school and sports every week.  Add all the things you need to do to run a household and parents have very little free time.  Gaining back 3 hours a day by not commuting is a massive benefit.  What can you do with 15 more hours a week?  What about half that?  

Tech companies seem to be the most understanding, while legacy industries such as manufacturing, defense and financial services are struggling to pivot.  Some are leading the way, like Credit Suisse.  In a recent interview at the World Economic Forum, Credit Suisse chief Thomas Gottstein agrees that working in the office five days a week is  “unrealistic and it is not what employees want.”  But some leaders like Elon Musk, simply don’t care and want workers back in the office full-time.  Ultimately, a balance is shaking out where 47% of workers desire a hybrid work model and companies are beginning to come around.  There will be industry nuances, but it’s clear many workers want to gather at the office with co-workers for collaborative work and perform busy work in a place of their choosing.

 

Competing for the same talent

The U.S. unemployment rate stands at 3.6% which is considered near-full employment.  Companies are competing for the same talent in the same markets.  It’s a daily struggle for recruiters to find good talent where the company wants to hire them.  And that is part of the problem: many companies that have location-specific roles or have been traditionally tied to their physical offices don’t have the institutional knowledge to hire anywhere.  At BeyondHQ, we help our customers answer this question: “If you can hire anywhere, where is anywhere?”  You can no longer hire from the same areas as you did in 2019.  HR and talent acquisition leaders need to rethink their strategies and categorize which roles can be remote/hybrid and those which require being in the office.  This can help reduce time to hire and allow hiring managers to get ahead of their hiring time series.

 

Current impacts to job seekers

Flexible work, or the insistence on remote-only work, has an added benefit to employers: they can now hire anywhere in the world for many roles.  This flexibility also gives some power back to employers to look at more cost-effective regions in which to hire.  Location-agnostic hiring is also allowing them to be somewhat cost-agnostic, as long as it is cheaper than San Francisco, New York and Seattle.  If you can hire a developer in Budapest for a third of the cost of a developer in San Francisco or New York, that is a very attractive option.  With the current market conditions, companies are looking to reduce costs without sacrificing quality.  

Let’s look at what’s happening in eastern Europe.  Well-known for its technical talent base due its focus on STEM-based education and a robust start-up environment, companies like Tata Consulting Services, HCL and others are setting up operations there to attract and upskill tech talent.  This creates a lot of competition for U.S-based job seekers that are more expensive, more demanding and arguably equal in skill to their eastern European counterparts.  

And what about that inflation problem?  Well, it’s a big problem and the jury is out whether it is a long-term or short-term disruption.  Either way, most companies are watching their balance sheets, reducing spending, and cutting costs with a direct impact to hiring.  Earlier this month, Coinbase Chief People Officer, L.J. Brock, announced publicly that they are pausing hiring “for the foreseeable future” and rescinding “a number of accepted offers.”  The crypto crash over the last month necessitates this.  Meanwhile, Uber CEO Dara Khosrowshahi has declared hiring as a “privilege.”  That’s not a pause per se, but reflects the focus on roles that are strategically important to the company.  We think this will be the norm through the summer: hyper-growth companies will scale back or “pause” while modest growth companies will strategically hire for the short-term.  Some, however, are bucking the trend.  With consumer demand still high, retailers like Amazon and Walmart are continuing to expand.  Walmart is expanding four new fulfillment centers to meet increasing consumer demand, which will add 4,000 new jobs over the next year.

Employees are also pausing unnecessary spending.  Inflation has impacted everyone’s ability to commute to work given the price of gas has doubled over the last year, and parking costs and tolls have also increased. Inflation is pitting the desire of companies for employees to return to work and the need of employees to reduce spending.  

 

How this may shake out in 2022

There is much uncertainty in the back half of this year but the trends show that employees will retain their newly minted power to demand hybrid work and flex schedules – and get it.  And frankly, it makes sense for companies to increase productivity out of their current employees as they pause hiring.  The focus on cheaper talent abroad will help fill U.S.-based skills gaps while meeting corporate cost savings objectives.  And during this time, talent teams will figure out how to hire anywhere efficiently in a highly competitive job market.  

 

Contact us to help with you workforce planning objectives

 

About BeyondHQ

BeyondHQ is the first real-time, collaborative SaaS platform designed to help companies run unlimited talent and real estate analyses while saving time and money. The company’s distributed workforce and workplace planning tools bring transparency, collaboration, and speed to decision-makers tasked with the challenge of building and scaling geographically distributed teams and offices.

As companies think more about hybrid and other flexible work models and a geographically dispersed workforce, they need a consistent, dependable solution that helps them predict, rank, and optimize successful outcomes regardless of which direction the company chooses – in-office, remote, or flexible work models. BeyondHQ enables HR, Real Estate, and Finance teams to evaluate where, why, and how to identify the right workforce plans in the right markets and where to prioritize their resources. Using a single interface to access trusted market data, the proprietary technology informs ‘what-if’ style scenario planning with customized recommendations based on the organization’s specific criteria, needs, and culture.

For more information, please visit BeyondHQ at www.beyondhq.co. Or on LinkedIn and Twitter.