I recently posed the question, “Will my job exist in 10 years?” Today, I pose another question, “Where will I work two years from now?” Among many other things, Covid-19 has accelerated this question.
Let’s take a step back. Over the last 20 or so years, we have seen a significant movement of white-collar jobs to lower cost locations. First called off-shoring, then near-shoring, now right-shoring.
Initially seen as a cost reduction exercise, more and more this is also about talent acquisition. India, for example, is still a relatively lower cost labour market, but it also has some of the world’s best and largest talent pools, especially in the areas of technology development, life sciences and financial research. For many of the world’s largest banks and technology firms, India is their second or third largest talent market, and according to our research over 40 percent of the world’s technologists are employed there.
Juxtapose this trend with what we have seen just over the last six months. The Covid-19 pandemic has challenged as many corporate beliefs as it has created new ideas. Employers are yet to fathom the full extent of the required shift in mindset, but all agree that here’s an opportunity to completely rethink the way talent is managed, sourced, and developed.
The chart below nicely lays out the various options firms are considering or have already decided upon. Workplace flexibility is becoming an important part of every firm’s employee value proposition (EVP).
Sitting here in Dubai, it’s interesting to see two extremes in the US. On the East Coast several New York based banks firmly declared an office centric position initially, though some have walked back from that extreme. Over on the West Coast, many tech firms have firmly declared a remote/virtual or remote/hybrid position. Some of these firms are even saying they will provide staff with Silicon Valley pay levels, even if employees are living in lower cost locations.
Having lived in the US for several years, I wonder how much this difference is an East Coast-West Coast issue, versus a bank-tech sector issue?
Outside of the US, European, Asian, and Middle Eastern firms are generally working with a hybrid approach.
I believe that the two extremes are relatively easy to manage. We’ve been doing office centric approach for over a hundred years. Some employees may not like it, but they will accept it, or move on. We also know how to do remote/virtual working, or at least we are adapting quickly.
Most firms will likely end up favouring a hybrid approach. However, I think the hybrid approach will be the hardest to manage. With a hybrid approach I see two main issues.
On one hand, staff who decide to work remotely run the risk of becoming second-class citizens. Employees in the office will have more “face time” with their manager and this could impact pay and promotion decisions. Secondly, managers will ultimately enforce when their teams come to work and how often, and this will be different across a firm based on the managers’ personal preferences. This may result in feelings of inequity between departments/employees.
I think the most important thing for firms to do is to understand what employees want, not just the managers. Look at your demographics, what do younger employees want? What do women with children prefer?
Ensure you make workplace flexibility a key part of your overall EVP in 2022 – it will help deter the Great Resignation.
Ray Everett is senior partner of human capital solutions at Aon.
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