Home STRATEGY & MANAGEMENT The Corporate Balance of Virtual Working vs Office Presenteeism in 2023

STRATEGY & MANAGEMENT

The Corporate Balance of Virtual Working vs Office Presenteeism in 2023

March 8, 2023

As a shift begins to emerge where employees are increasingly expected back in the office, Alberto Lopez-Valenzuela considers how business decisions about working from home policies will impact reputations and affect the ability to retain talent

The heady days of consistently working from home, scheduling hours around the demands of life, and freedom from the stresses of commuting appeared to be numbered in 2023. Flexible working patterns thrust on companies by the pandemic are being redrawn, with workers reporting that they’re expected to be back in the office.

Anecdotal evidence of a mass return is borne out by Dell’s sales figures, which show a 37% fall in shipments of PCs in the last quarter of 2022 due to a die-off in demand from both corporates and consumers in a reversal of the pandemic home-working boom.

This migration back to the office hasn’t come without warning. Since lockdowns ceased, there have been rumblings throughout the corporate hierarchy that bosses want people back on site. The financial sector has been leading the drive for presenteeism since 2021, when Goldman Sachs CEO David Solomon described remote work as “an aberration that we are going to correct as soon as possible”. By October 2022, Solomon was boasting that 65% of the bank’s workers were back in the office five days per week.

JPMorgan Chase CEO Jamie Dimon is another financial leader insisting that home working is bad for business, claiming that it creates a dishonest working environment where people are “more prone to procrastination”. Dimon holds that spontaneity, ideas generation and the ability to “hustle” are all stifled by remote working.

The productivity myth

There’s a common myth in business that companies are either sustainable or profitable. In reality, these attributes go hand in hand, and a dual focus creates the most value to all stakeholders. Sustainability requires the ability to attract and retain the best talent – because talent is essential to the longevity of the company. But it’s also essential to profitability.

And while some CEOs believe working from home undermines innovation and collaboration based working and therefore profitability, getting people back into the office isn’t a guaranteed route to increased productivity. As Michael Dell – arguably a biased observer as CEO of the aforementioned PC purveyor – said: “If you are counting on forced hours spent in a traditional office to create collaboration and provide a feeling of belonging within your organisation, you’re doing it wrong.”

Rather than reducing productivity, reporting by the UK government shows that two-thirds or more of employees working at home get as much or more done as they did pre-pandemic in the workplace. The ability to set their own schedule allows employees to work during the hours that they are most productive. Distractions from colleagues are also limited, and collaboration can occur instantly via digital channels, without the need for one or both parties to travel.

But there is more at stake than productivity or a preference for in-person meetings. Employees now feel empowered to mould their working situation around their own needs. The changes wrought by Covid, and the confidence inspired by the great resignation and high levels of employment mean that companies with an inflexible addiction to presenteeism will fail to retain talent.

The threat of recession hanging over the UK is also driving shifts in the employment market. What this means in the context of employment is uncertain, but there is an adjustment going on to a new economic reality, and employers have to recognise employees’ needs. Flexible working can cut commuting and childcare costs, significant in a high-inflation environment. Little wonder that EY’s 2022 Work Reimagined Survey found that 80% of employees want to work remotely at least two days per week.

The reputation outcome

The reputations of businesses as good or bad employers will inevitably be linked to their flexible working stance. As well as voting with their feet, the interconnectedness created by social media gives employees the platform to share their views on employers’ working from home policies. It will also be a key question in recruitment – EY found that the second highest priority for employees after pay was flexibility in where and when they work.

The financial sector again provides an illustrative example. In 2022, the banking industry hit a three-year low in employee sentiment, according to Penta’s Stakeholder Intelligence Index: Employment, due to failures around employee wellbeing and work flexibility. Workers now expect to have their grievances heard and be able to state what they expect from their employers – and will walk away from an employer if they feel that they aren’t getting what they deserve.

This increased confidence and willingness to take decisive action have created a real power shift within the job market, putting employees and not employers in the driving seat. This in turn has shaped an employment landscape where large employers across multiple sectors are struggling to fill roles.

One of the outcomes has been successful pushback from employees over return to the office policies. Despite their CEO’s rhetoric, Goldman Sachs and JPMorgan Chase have been forced to dial back their more draconian statements over remote work , and look at flexible initiatives and perks to retain staff. The high-profile nature of this particular battleground has had a significant impact on the financial sector’s reputation among existing and prospective employees.

Conclusion

Corporate reputation is not a construct. It is not something that can be managed separately from the fundamental business, but rather an outcome of that business’s practices and operations. An authentic reputation evolves from being consistent in word and deed over time, and that includes treatment of employees. Flexible working policies have been shown to have a significant impact on employee sentiment and therefore corporate reputation.

One way to perceive reputation is as a feedback mechanism of the company’s viability and overall performance. Organisations that started down the path to flexible, hybrid working need to carefully consider the repercussions of pulling workers back into the office full time. Getting the balance right now so that employees are happier in the long term and more committed to their future with the company could prove to be the differentiating factor in the war for talent.

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About the Author

Alberto Lopez Valenzuela, Senior Partner, Penta, is a recognised business thought leader on the issue of business reputation and how it is impacted by stakeholders. Alberto is the author of The Connecting Leader, a book examining how corporate leaders should connect businesses with society, in the age of hyper-transparency, interconnectivity and media anarchy, and a visiting professor at Cass Business School. Penta is the world leader in stakeholder intelligence and works with hundreds of organisations to support the creation of social and economic value by corporations, advisers and the investment community.

Reference

The productivity myth

The reputation outcome

Conclusion

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