In today’s USA Today Opinion, I share why “As we teeter on the brink of a possible recession, business leaders have a make-or-break choice. Use this moment to threaten or plan layoffs while mandating employees return to the office. Or double down on flexible ways of working and make flexibility a core part of their operating model.
“Will they revert to past patterns? Or will they re-imagine work and move toward growth and recovery.”
During the pandemic’s early days I wrote in a USA Today Opinion piece that “Flexible work was made for times like these,” explaining how flexibility was both a business continuity and economic recovery strategy.
Flexibility was the way through and the way out of the crisis then, and it is now.
As we teeter on the brink of a possible recession, business leaders have a make-or-break choice. Use this moment to threaten or plan layoffs while mandating employees return to the office. Or double down on flexible ways of working and make flexibility a core part of their operating model.
Businesses can force their employees back to an outdated work style that was disappearing even before the pandemic and is no longer valued or understood by most of the workforce. Or they can determine how to manage costs, maintain performance and arrive at the other side with a loyal workforce that is engaged and ready to seize opportunities when the recovery begins.
Executives can plan and prepare with trained teams or fall far behind in a scramble for talented workers, who will prioritize flexibility when choosing future employers.
Look no further than airlines and airports worldwide to see how this unfolded. Instead of exploring flexible ways to work and retain talent during the pandemic, airlines resorted to mass layoffs. Now they’re stuck with planes on the ground, luggage piling up and long lines of frustrated passengers. The industry was caught without the staff needed as travel soared back to pre-pandemic levels.
Layoffs backfired after Great Recession
Leaders stood at these same crossroads during the Great Recession more than a decade ago. “In their panicked reaction, firms overreacted with ‘excess layoffs,’” noted the authors of a recent National Bureau of Economic Research paper. And when the war for talent was on two years later, many employers were left at a competitive disadvantage.
Researchers Deepak K. Datta and Dynah A. Basuil found while there’s “a deep-seated belief” that “employee downsizing has positive implications for operational efficiency and enhance performance, empirical evidence highlights that downsizing often does not yield anticipated benefits.”
In 2009, I co-authored an Alliance for Work-Life Progress guide on how to use flexible ways of working as a cost-effective alternative to layoffs. That guide has never been more relevant as a recession looms. Because if it’s like most recessions, we’re looking at a turnaround in a year or less.
Flexibility is how businesses can control labor costs and keep talent. But executives must move past a singular focus on remote work. Especially when nearly half the workforce needs to be onsite for their jobs, and of those who have remote-capable jobs, most want to work onsite at least some of the time.
Flexible work is so much more than where we work. It’s also about when — how we manage time, whether it’s through reduced schedules, job sharing, sabbaticals and furloughs. It’s also about how we design and use workspaces, whether it’s to foster culture and collaboration or create healthier work environments. And it’s about how we use technology to gather and connect, and in turn reduce travel expenses.
Yes, flexibility includes remote work, but it’s more than the binary home or office construct. It’s client and customer sites, co-working spaces and coffee shops. When strategically used, remote work can help reduce real estate and related overhead costs while providing opportunities to draw on talent from less expensive regions in the U.S. and abroad.
As the NBER paper found, organizations can reduce salary expenses by adjusting compensation packages to “reflect the greater amenity value of higher remote work levels.” Not only does this help to offset wage growth, it also “eases the challenge confronting policymakers in their efforts to bring the inflation rate down without stalling economic growth.” And, as USA TODAY has reported, nearly half of workers would take a pay cut to continue to work remotely at least part time.
Flexible schedules can increase worker loyalty
A McKinsey & Company study found that while people leave jobs for more money and career opportunities, they stay when they have adequate workplace flexibility and meaningful work. That loyalty and engagement translate to dollars and matter to institutional investors and regulators, who are increasingly focused on human-capital metrics, all of which are directly affected by work flexibility.
Yet, that performance may be at risk as quiet quitting gains momentum with employees doing the bare minimum in search of better boundaries and work-life balance.
Even so, I remain optimistic. This year, we surveyed a combined 1,000 managers and employees for one of our clients. We asked about their feelings regarding the continued evolution in how, when and where work is done. The top response for managers and employees was “hopeful.”
Which path will business leaders chose? Will they revert to past patterns? Or will they re-imagine work and move toward growth and recovery.
Cali Williams Yost is a workplace futurist, strategist and author. Follow her on Twitter at @caliyost