Many proclaimed remote work is here to stay. They couldn’t be more wrong as big firms increasingly take a tough line

WHY THE ROUGH CHANGE?

Given how many companies said during the pandemic that their remote work arrangements were not affecting productivity, the recent and sudden reversal by a number of large employers raises a big question: why now?

From cost considerations to downsizing to promoting staff integration, these are some of the reasons cited by HR and business experts, as well as companies themselves, for ditching remote work over the past year or so:

• The value of human interaction

Both Amazon and Grab, when announcing their back-to-office mandates, said that in-person collaboration, as seen during hybrid work arrangements, has been beneficial to the company.

And so, to further improve this, companies have decided to double the number of days in office.

Group CEO of recruitment firm Reeracoen, Kenji Naito, noted: “For some roles, particularly where immediate responses are required or tasks are not easily measurable, desk-based work facilitates more effective communication.”

Such interaction is even more important for small and young companies.

Mr Bryan Tay, Singapore country director for fintech platform Lendela, said: “We have to create a culture from the ground up and cultivate trust, understanding and a deep belief in our mission, which is much harder to achieve on a screen”.

Lendela was founded in 2018 and currently has over 50 employees in Singapore and other markets. Since its establishment, it has practiced full-time office work, except during the Covid-19 pandemic.

“Being in the office together allows us to build stronger connections, share ideas organically, engage in real-time problem solving and respond quickly to opportunities and challenges,” said Mr Tay.

• Integrating post-pandemic employment

It’s normal for companies to constantly review their policies and strategies from time to time, including those related to employee location, experts said.

Economist Song Seng Wun said companies may have hired workers during or shortly after the pandemic.

With the growing number of employees who haven’t had a chance to meet in person on a regular basis, it may be an added incentive for some companies to call them back to the office.

“Workers come and go. Ultimately, companies don’t want a situation where their employees are working with people they have never or hardly met,” said Mr. Song, an economic adviser to financial services provider CGS International.

Mr. Naito from Reeracoen added: “We have noticed that junior employees with less experience and employees without clearly defined quantitative goals can face challenges working remotely.

“Junior employees often require more direct supervision and mentoring, which can be limited in remote settings.”

• Downsizing and justifying costs

An often-heard argument for maintaining flexible work arrangements is that a company that doesn’t do so risks losing good employees.

“However, some companies may see this as an opportunity to streamline their workforce, which may align with their workforce optimization objectives,” said Mr Lewis Garrad, Partner and Lead career for Mercer Asia.

Interestingly, some of the companies that are calling their workers back to the office, such as Grab, Disney and Amazon, are also the ones that have recently made headlines for retrenchment exercises.

Indeed, one of Amazon’s top executives told employees that if they had trouble complying with the mandatory return-to-office policy, “there are other companies around.”

Bamboo HR’s June survey found that a quarter of VPs and CEOs and 18% of HR professionals surveyed in the US admitted they hoped for “some voluntary change” when they implemented mandatory back-to-the-office policies.

But experts also noted that a forced back-to-the-office policy may be too blunt a tool to reduce the number of employees.

Associate Prof Theseira said some companies might consider it “not necessarily a bad thing” to lose employees who are unwilling to return to work and who they perceive as less engaged.

“But there is this argument that they might lose their best staff because the best employees have the ability to quit and then find employment elsewhere,” he said.

Experts added that many other factors influence a company’s decision to seek reinstatement.

While some argue that enforcing office work would drive away talent, Lendela told CNA TODAY that its retention rate so far this year is 88% across all its offices and 87.5% for the Singapore office.

By comparison, a survey by market research firm IPSOS in January found that about three in 10 Singaporean workers plan to leave their employers within two years. A separate study by professional services firm EY in July 2023 found that 45% of workers here had plans to change jobs within a year.

In Lendela’s most recent monthly employee satisfaction survey – conducted anonymously and online – its workers gave an average happiness rating of 86%.

Meanwhile, at another startup BigFundr, which also stopped practicing remote work after the COVID-19 period, an employee, Mr. Imran Johri, found office work a refreshing change from the pure arrangement away from his old company.

“Those years of working from home were the most challenging for me (in terms of productivity) because I have three young children who simply see my presence as a license for constant engagement,” said Mr Imran, who is director of marketing at BigFundr.

However, he admitted that a hybrid arrangement would be ideal as it would allow him to fulfill his caring responsibilities for his children and family as well.

Some experts have pointed to the high real estate costs here as additional motivation for companies to bring their workers back to the office to “justify” rent expenses.

“The high cost of office space in Singapore means that companies with large offices may feel the need to bring back employees to make full use of their space,” said Jianhan Qiu, director of strategy, Asia at Unispace Singapore.

“The cost of keeping offices empty can push companies to focus on office work, making it a financial decision as well as a cultural one.”

• Taking the example of other (bigger) companies.

While companies make their own calculations in setting any policy or strategy, it is also normal to look at what others in the industry are doing and take this into account.

Ms Shalynn Ler, Singapore managing director of recruitment firm Ethos BeathChapman, noted that companies are operating in great economic uncertainty and face huge pressure from shareholders.

“It’s easy in these circumstances to be very reactive and a herd mentality sets in where companies start to mirror what other big firms and industry leaders are doing,” she said.

Associate Prof Theseira from SUSS said it “seems true anecdotally” that if a certain large company does something, then a smaller one would tend to follow suit.

It also applies to measures that are considered unpopular but financially necessary, such as laying off workers, raising product prices, or even changing work practices.

“The natural tendency of global management is always to do it, because they care about the bottom line. But it’s just that the company may not want to do it (yet), if they’re going to be the first,” said Associate Professor Theseira.

LinkedIn’s Ms. Ang noted that businesses globally are “facing headwinds and rapid change,” prompting companies to reconsider a whole range of decisions, from investment to operations.

Although the latest MOM figures indicate that while Singapore’s labor market is tight – the unemployment rate is low and there is a shortage of workers to fill roles – sentiment was bleak.

Discounts doubled in 2023 compared to the previous year. Earlier this year, the Singapore National Federation of Employers and the labor movement said they were expecting more layoffs until the end of 2024.

Additionally, as more organizations adopt desk work as the default arrangement, even as more jobs are available, employees looking for flexible options may have fewer options, according to some experts.

“This trend could reduce the bargaining power of workers who prefer remote or hybrid models,” said Mr David Blasco, Country Director at Randstad Singapore.

Simply put, companies looking to rescind their work-from-home benefits may have to worry less about their employees leaving.

Grab’s Ms Sam said her pay was behind her colleagues but the flexible working arrangement “made up for it somewhat – or at least delayed my departure”.

He plans to leave, but it might not be that simple now.

“And I think the company knows that too, the job market is not that great. So maybe many of us won’t be able to find better options anyway,” she said.