Once upon a time, major companies like Apple or Google were able to attract talented individuals based on the allure of their considerable market share, prestigious brands and famously sprawling campuses, says Chris McNamara.
But I’m not sure these businesses can assume that the same level of brand loyalty exists in the context of the modern hiring environment. And given that recent research shows that four out of five businesses today are struggling to fill skills gaps, employers cannot afford to be complacent when it comes to finding and attracting talent.
More and more, employers today are being judged by jobseekers on the benefits and flexibility they provide, including the work/life balance they offer and the overall quality of life that candidates can expect if they accept a job offer. This trend predates the pandemic, as evidenced by the popularity of websites such as Glassdoor, Blind and Ratemyemployers; these sites have attracted millions of users for years looking for a level of transparency into a company’s culture and work practices. But as the vast majority of companies embraced distributed work in some shape or form during the global pandemic, we saw people from around the world reassess their relationships with work.
And while the pandemic has since subsided, I believe that attitudes towards the place of work in life have changed forever. Today, employees have come to expect elevated levels of autonomy, flexibility and control over their work-life, as people have fully embraced the freedom of working remotely.
Big tech companies
Against this backdrop, it is surprising to me that many Big Tech companies – many of whom were the first to close their offices and implement remote work when the pandemic hit – have turned away from remote work. The various calls from the likes of Netflix, Twitter, Snap, and most recently Amazon ordering staff to return to the office are likely to prove short-sighted: leaders who enforce such policies may encounter hidden costs from these decisions, particularly when it comes to retention and the pool of talent they can access for future roles. They also risk missing out on potential productivity gains, as a study by Stanford University found that remote work increased business productivity by 13 percent.
These tech giants are missing that remote workers consistently demonstrate more loyalty, motivation, and engagement – our own research at Remote has found that businesses offering remote work experience reduced churn, lower operating costs and increased speed of market entry. Based on a survey of 1,004 HR and business decision makers and workers across four regions – North America, Europe, Asia-Pacific and Latin America – the 2023 Remote Workforce Report found that the vast majority (69%) of employers with a distributed remote workforce say that employee retention has increased since their business adopted the practice.
What impact does the remote workforce have on the recruitment market?
In the meantime, more than half (57%) said that a distributed remote workforce made it easier to hire and keep talent. And when asked how they feel about their work, only 17 percent of remote employees revealed they have considered leaving their job compared to 24 percent of their in-office counterparts. Increased retention is a significant source of cost-savings, as employee turnover is expensive and can cost companies the equivalent of up to nine months of salary to find, replace, and train new workers.
Our survey also supported the results from the Stanford University research, as we found that companies with remote workforces reported increased productivity. More than half (58%) of those with a remote workforce in the same country and 72 percent of those with an international remote workforce stated that productivity has increased since adopting a distributed model. Employers said that workers on international remote teams get more work done and do it more efficiently, thus producing more with less.
What about flexible work?
Beyond these cost savings and productivity benefits, flexible work offerings are rapidly becoming a key part of how businesses differentiate themselves in a turbulent jobs market. Rather than simply being another ‘perk’ for staff, it’s becoming strategically advantageous for businesses to think about remote work as part of their talent acquisition and retention strategy. That’s because, for a significant proportion of workers, flexibility in where and how they work has become the ultimate workplace benefit.
For instance, when we asked employees whether flexibility or compensation was more important to them, 40 percent of employees asserted that flexibility was more important than compensation. Likewise, Stanford Professor Nick Bloom finds that prospective employees are prepared to give up 8 percent of their salary in order to gain access to remote work benefit.
Flexibility is a key driver of remote workers’ job satisfaction. Our study found that fully remote employees are more satisfied with their companies and are more likely to feel they are being treated well: 70 percent of remote workers in our survey said they are very or somewhat satisfied, compared to 66 percent of hybrid employees and 67 percent of office workers.
Certain groups value flexibility more than others. Our study found that younger cohorts (44% of Gen Z and 52% of millennials) are more likely to consider the freedom to live and work anywhere a major benefit compared to older generations (32% of baby boomers).
Similarly, women tend to place greater importance on flexibility, with many using remote work as a way to make balancing home life and work life less of a struggle. Nearly half of women (42%) named the ability to care for loved ones as one of the biggest benefits of remote work, compared to 36 percent of men.
Overall, our findings underline just how much today’s workers crave flexibility, as a way to gain greater control over their lives. Remote work is one way to satisfy this desire for control and autonomy, and companies that fail to offer flexibility risk losing workers and struggling to attract new talent.
What are the main takeaways?
For talent brands, the message from these findings is that progressive work practices – especially around flexible work models – are becoming some of the most meaningful points of differentiation in the ongoing battle for skilled candidates.
By failing to offer flexible options such as remote work (or in the cases of some firms, rescinding the offer after workers have grown accustomed to it), employers may find they have negatively impacted the employee experience at their firm and missed out on potential gains.
To become a strong talent brand in today’s market, one that attracts the best and most skilled candidates for job opportunities, businesses must increasingly consider how they distinguish themselves from others. Remote work has to be part of that consideration.
Chris McNamara is the Chief Revenue Officer of Remote.