A Lack Of Remote Work Options May Be Causing Employee Turnover

How HR teams can meet the demand for remote work

After a crisis as destructive and destabilizing as the Covid-19 pandemic, the desire to “get back to normal” is natural. But while the world is returning to normal in many ways – people are traveling again, mask mandates have been dropped, and so on – we’ve also witnessed a series of fundamental and permanent changes. Nowhere is this shift more apparent than in how and where we work, a transformation that HR teams are especially focused on.
 

Many companies are eager to get back to “normal” as quickly as possible, and this often means ordering employees back into the office. But according to our 2022 Hiring Benchmark Report – in which we surveyed over 500 hiring professionals at companies of all sizes and across industries – this policy could be putting those companies at a serious competitive disadvantage. Companies that are mostly in-person are seeing higher rates of turnover than their remote and hybrid peers, and this is a particularly serious impediment in the middle of a tight talent market when employee retention is already a major issue.

HR teams have to recognize that employee expectations about workplace flexibility and autonomy will never be the same. They should develop policies that take these changes into account, from remote work options to a culture built around meeting employees’ individual needs. The companies that adapt to new employee demands will be in a stronger position to attract and retain talent than those that continue to resist change.

Companies that Require In-Person Work are Losing Employees

For many companies, the shift to remote work was a reluctant necessity and returning to the office was always the end goal. However, our survey found that this plan may not be working out: 56 percent of the companies that are mostly in-person say employee turnover is a major issue, a proportion that drops to 50 percent for companies that are hybrid (a mix of remote and physical work) and 41 percent for companies that are mostly remote.

A significant majority of companies can see that the pre-pandemic status quo is likely gone forever. While 39 percent of our survey respondents say their workplaces are mostly in-person, 61 percent are either mostly remote or hybrid. These policies are meeting a clear employee demand: a May 2022 PwC survey found that 63 percent of employees whose jobs can be done remotely say they “prefer some mix of in-person and remote working.”

It’s no surprise that the companies that fail to meet these demands and expectations are losing employees. Half of the companies we surveyed answered “yes” when we asked if employee turnover is a major issue, while just 38 percent said “no.” It has never been more critical for companies to prioritize employee retention and implementing the right remote work policies is an integral part of this effort.

How Remote Work Policies Are Tied to Retention

Despite the fact that employees are increasingly demanding remote work options, many companies are requiring employees to show up in person. These companies appear to believe that the shift to remote work was a historical aberration rather than the catalyst for a long-term change in how employees work. The evidence suggests that this belief is mistaken, and this is mainly because employees’ attitudes toward remote work are expressions of more fundamental preferences and concerns.

Our survey found that there’s a mismatch between companies’ perceptions of what prospective employees want and what they actually want. Although hiring professionals rank compensation as job candidates’ top priority, candidates are more interested in securing the right work-life balance. It isn’t difficult to see how the availability of remote work opportunities is connected to work-life balance for many employees. When employees are able to decide where they work, they will have more flexibility to travel, see family and friends, and determine exactly what their work environments look like.

According to our survey, 56 percent of companies have implemented an RTO plan this year – a proportion that surges much higher in certain industries, such as transportation and logistics, the public sector, and manufacturing. As the pandemic recedes and companies reassess their policies, they shouldn’t forget that the desire for remote work isn’t going anywhere.

How HR Teams Can Meet the Demand for Remote Work

One of the most important elements of employee retention in the coming years will be HR teams’ ability to fully leverage remote work. This process won’t be the same for all companies, but there are several essential issues HR professionals should keep in mind. First, they should have a candid, ongoing conversation with employees about their needs and concerns. Second, they should ensure that their workplace culture is conducive to remote work. And third, they should focus on the underlying priorities which drive the demand for remote work.

Despite the prevalence of remote work, a Gartner survey found that less than half of employees believe remote work is “destigmatized” at their companies, while 70 percent believe “on-site workers are more likely to be promoted and paid more compared to remote workers.” These are reminders that the mere implementation of remote work policies isn’t enough – HR teams also have to integrate remote workers with their in-person colleagues, provide the resources remote workers need, and establish guidelines and standards that are fair to all employees.

At a time when companies are struggling to attract and retain talent, remote work is a key differentiator that will set them apart from their competitors. While a desire for normalcy is understandable – especially for HR professionals who have been through an extremely difficult few years – it’s long past time to acknowledge that remote work is here to stay.

Author Bio

Josh Millet is the Founder + CEO of Criteria, a venture-backed ($64.3M) talent success company that helps organizations make more objective, evidence-based talent decisions that both reduce bias and drive outcomes. Prior to launching Criteria, Josh co-founded an online test preparation company, Number2.com, which was acquired by Xap Corp in 2002.