Working remote is here to stay, new report predicts

A permanent workforce transformation is well underway in the middle market, according to a new report in partnership with the U.S. Chamber of Commerce.

The report reveals the structural shift to remote and hybrid work models is here to stay, and the data confirms that executives expect a tight labor market will continue to be a significant challenge over the next year.

In the fourth quarter of 2021, more than a third (36%) of middle-market companies polled stated they now have employees working remotely who weren’t doing so prior to the onset of the pandemic. Of those, 65% are embracing hybrid work, meaning employees work off-site some of the time and in the office some of the time. Almost half (48%) of the survey respondents have made remote work a permanent option for some employees on a full-time basis, while 42% are considering making that shift.

“The pandemic has been a once-in-a-century event that has significantly altered people’s lives and society as a whole,” said Joe Brusuelas, RSM US LLP chief economist. “It has also changed the entire perspective of where, when and how people work. The office of the future will have new standards and employ people with different priorities. Middle market companies that provide the flexibility and culture that workers demand stand to gain a prominent and lasting competitive advantage, all the more important in an incredibly tight labor market that has shifted the balance of power to employees for the foreseeable future.”

In the middle market, earlier concerns around reduced productivity, teamwork and culture were proven mostly unfounded. Of the survey respondents that previously did not allow remote work, 77% said reduced productivity was not an issue at all or a minor issue. A majority (70%) stated that reduced teamwork was either a minor issue or not an issue at all, and 75% said the challenges of managing workers created by remote working were not an issue at all or only a minor issue.

Although 27% of respondents said that remote work created a major issue in maintaining culture, 68% of companies reported that it resulted in only a minor issue, or it wasn’t an issue at all.

While many changes have been positive for middle-market firms, they are grappling with challenges related to a tight labor market. Fifty-six percent of surveyed companies plan to ramp up hiring over the next year, and of these, over 90% admit that it will be at least somewhat challenging to staff their open positions.

The outlook on retention is similar, with 85% of executives stating staff turnover will be a challenge.

A lack of available qualified workers was cited as a reason to anticipate staffing issues by 96% of companies, including 43% that declared it to be a major issue. Even more companies said local competition for workers was a main reason for their hiring difficulties, while slightly fewer companies indicated the competition for workers with other employers in their industry was a factor. Other responses included issues finding people who want to work in their industry and the cost of labor.

“The employment landscape in America has changed dramatically as a result of the COVID-19 pandemic, and we now have a situation where there are too many people without jobs, and there are too many jobs without people to fill them,” said Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce.

“In this tight labor market, companies that adapt their workforce practices for more flexibility, invest in training and upskilling opportunities, and seek out workers from overlooked talent pools will be better positioned to compete for talent in the post-pandemic economy.”