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

WHY THE SUDDEN CHANGE?

Given how many companies said during the pandemic that their remote working arrangements were not affecting productivity, the recent and sudden about-turn by a series of big employers raises one big question: Why now?

From cost considerations to reducing headcount to promoting staff integration, these are some of the reasons cited by human resource and business experts as well as companies themselves for doing away with remote working in the past year or so:

• Value of human interaction

Both Amazon and Grab, in announcing their return-to-office mandates, said in-person collaboration, as observed during hybrid work arrangements, had been beneficial for the company.

And so, to further enhance this, the companies decided to double down on the number of days in the office.

Group CEO of recruitment firm Reeracoen, Kenji Naito, noted: “For some roles, particularly where immediate responses are required or tasks aren’t easily measured, working from the office facilitates more streamlined communication.”

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

Mr Bryan Tay, Singapore country manager for fintech platform Lendela, said: “We need to create a culture from scratch and cultivate trust, understanding, and a deep belief in our mission, which is much harder to do over a screen.”

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

“Being together in the office 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 hires

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

Economist Song Seng Wun said that companies would have hired workers during or soon after the pandemic.

With the growing number of employees who have not had a chance to meet each other in person regularly, it may be an added impetus for some companies now to call them back into 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, economic adviser for financial service provider CGS International.

Mr Naito of Reeracoen added: “We’ve observed that junior employees with less experience and employees without clearly defined quantitative targets may face challenges working remotely.

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

• Cutting headcount and justifying costs

One often-heard argument for maintaining flexible working arrangements is that a company that fails to do so risks losing good employees.

“However, some companies might see this as an opportunity to streamline their workforce, which could align with their goals of optimizing headcount,” said Mr Lewis Garrad, partner and career business leader for Mercer Asia.

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

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

Bamboo HR’s survey in June found that a quarter of vice-presidents and C-suite executives and 18 percent of HR professionals surveyed in the US admitted hoping for “some voluntary turnover” when they implemented mandatory return-to-office policies.

But experts also noted that a forced return to office policy may be too blunt a tool to trim headcount.

Assoc Prof Theseira said some companies may see it as “not necessarily a bad thing” to lose employees who are unwilling to return to office and whom they perceive as less committed.

“But there is this argument that they might be losing their best staff, because their best staff have the ability to quit and then find a job elsewhere,” he said.

Experts added that many other factors influence a company’s decision to mandate a return to office.

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

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

In Lendela’s latest monthly employee satisfaction survey – done anonymously and online – its workers gave an average rating of 86 percent in terms of happiness.

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

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

Nevertheless, he admitted that a hybrid arrangement would be ideal, as it would allow him to meet his caring responsibilities for his children and family too.

Some experts highlighted the high real estate costs here as an additional motivation for companies to bring their workers back to the office to “justify” their spending on rents.

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

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

• Taking the cue from other (bigger) companies

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

Ms Shalynn Ler, Singapore general manager for recruitment firm Ethos BeathChapman, noted that companies are operating under great economic uncertainty and face huge pressures from shareholders.

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

Assoc Prof Theseira of SUSS said that it “seems true anecdotally” that if a certain big company does something, then a smaller one would tend to follow suit as well.

It also applies to measures that are seen as unpopular but otherwise financially necessary – such as retrenching workers, raising prices of products, or even changing work practices.

“The natural tendency of management globally is always to do it, because they are looking after the bottom line. But it’s just that the company may not want to do this (yet), if they are going to be the first,” said Assoc Prof Theseira.

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

Although the latest MOM figures indicate that although the labor market in Singapore is tight – the unemployment rate is low and there is a scarcity of workers to fill roles – sentiment has been bleak.

Retrenchments more than doubled in 2023 from the year before. Earlier this year, the Singapore National Employers Federation and the labor movement said they were expecting more layoffs until the end of 2024.

Furthermore, as more organizations adopt work-from-office as the default arrangement, even if there are more jobs available, employees seeking flexible options may have fewer choices, according to some experts.

“This trend could potentially decrease the bargaining power of workers who prefer remote or hybrid models,” said Mr David Blasco, country director at Randstad Singapore.

Simply put, companies which want to revoke work-from-home benefits may have to worry less about their employees leaving.

Ms Sam from Grab said that her salary lags behind her peers, but the flexible work arrangement has “somewhat made up for it – or at least delayed my departure”.

She intends to leave, but it may not be so straightforward now.

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