There has been an endless stream of speculation from pundits and economists alike that we may soon see a recession in our economy. However, according to the latest reports, even the country’s top economists are unsure at this point which way the economic winds will blow.
Another area of uncertainty should the economy enter a slower phase is the fate of the hybrid or remote work movement. Will belt buckles and layoffs shift the balance of power back to employers, weakening worker choice in hybrid work?
Employees held the cards for the last two years. With the “Big Layoff” and more recently “Quiet Quitting” they were able to break new ground while dictating whether they could continue to work from home in order to get into the office. Some observers predict the balance of power will shift back to employers, and with it non-negotiable demands to return to the personal workplace.
Such a scenario is not likely. Since everyone at the office was sent home in March 2020, the genie has been let out of the bottle. Employees discovered how flexible work arrangements lowered their stress levels, and, lo and behold, employers found that hybrid remote workforces not only performed as well as on-site teams, but also outperformed on-site teams in productivity. “Recent data shows that working from home is associated with higher productivity, consistent with survey results in which workers say they are actually more productive when working from home and also freeing up time to commute save,” said Janice C. Eberly, professor at the Kellogg School of Management at Northwestern University.
Hybrid and remote work is thus being embraced and proving to be a viable model for the workplaces of today and tomorrow. It is a key element of an emerging form of highly flexible, digital businesses that can quickly adapt to new circumstances, listen to and understand markets, and develop and deliver products and services in the way customers want.
An economic slowdown will throw yet another curve at digital work, just as the Covid crisis did a few years ago. But it’s not a black-and-white power shift between workers and employers. Consider some of the implications when major economic turmoil hits:
Hybrid and remote work will continue to be embraced in a mixed way. Yes, in the event of a slowdown, employers can hold more cards. And there can be painful layoffs. But business leaders have also now realized that people who work from their own locations are not only more productive, but also save enormously on real estate costs. You can increase or decrease department staff without the hassle or expense of creating or closing office space. Therefore, even when employees are full-time employees, they can be viewed as more flexible on-demand resources, much like outside contractors.
At the same time, companies looking to gain an advantage in the coming economy – even if they have faced layoffs – will find a major benefit in being able to quickly recruit talent anywhere in the world – without relocation costs. Companies with strict in-person work requirements “may have to pay a premium to retain employees compared to their competitors and need to recruit from a slightly smaller talent pool,” notes Steven J. Davis, a professor at the University of Chicago Stand School of Business.
Gig or contingency work opportunities will continue to increase. The gig economy is almost entirely about remote work. Gig work and temporary staffing have been areas of growth over the past decade, driven by apps and applications that enable customers to hire talent on-demand, consumers to access contractor services on-demand, and people to explore new opportunities. earn a living as they can connect with work opportunities around the world. When companies are forced to downsize or limit staff, they will increasingly rely on gig work or continental situations to get tasks done. Of course, with the greater reliance on contract labor comes remote work, which is the way most contractors work.
Technology acceptance will continue to increase. Yes, technology will replace jobs, and an economic slowdown can speed things up — but that means increasing demand for human talent in other areas. Any economic slowdown impacts the growth of technology, particularly cloud services, digital forms of product and service delivery, and the artificial intelligence behind them. Technology budgets can get tighter, but companies have learned to get through the best of economic times with tight budgets and lean staff. AI has increasingly played a role in filling labor shortages over the past two years. When the economy goes wrong, AI will pick up more of the doldrums as it’s seen as a cheaper option to retain workers. As a result, there will be a relentless demand for people skilled in cloud, digital platforms, and AI—all jobs that can be done remotely. Guess what? If companies want to attract such talent, they need to keep hybrid and remote work options wide open.
“Digital workforces” will have had their day. Some in the tech industry like to refer to the various AI, robotic process automation, and other tools as the digital workforce, which performs more routine and repetitive tasks while collaborating with the human workforce. Regardless of the state of the economy, reliance on the digital workforce will continue to grow, and an economic downturn will make robots slightly less expensive. However, remember that people – many people – need to be equipped or trained with the right skills to design, code, build and maintain digital workers, so one lesser area of human employment quickly leads to another – recession or no recession . Working with these systems means more work that can be done remotely. Again, attracting and retaining talent means enabling hybrid and remote work.
The economy has been in shaky waters for some time and talk of slowdown or recession is increasing. The types of organizations that will come through all downturns are those that foster innovation, digital savvy, and a high level of employee flexibility and empowerment. Hybrid or remote work is a natural — and necessary — foundation of this new organization.