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Working remotely, onshore or offshore, has become a key employee demand globally in the post-pandemic era. With both remote and hybrid models becoming entrenched, employers now find it difficult to attract job candidates with purely office-based roles. Multiple surveys have found that a large percentage of workers would actually be willing to take a pay cut to spend more time working remotely, or quit altogether if their company is not flexible about remote work.
Given this major change in the labour market, and with most companies moving towards remote workplaces, one would expect employee retention to be improving. However, the opposite seems to be happening. In the US, total monthly resignations (excluding agricultural workers) were around 3.5 million before Covid-19 struck, fell during the pandemic, but had crossed 4.5 million by August 2022, according to the US Bureau of Labor Statistics.
So, what gives?
This may sound counter-intuitive, but while remote work tends to make workers generally more satisfied, it may also make them more prone to leave. As remote work has become a more enduring and entrenched element in the post-pandemic professional landscape, we may actually see a higher rate of churn in the labour market permanently. One key reason is the rising demand for remote working arrangements. A recent survey showed that more than 60% of job seekers were focused on remote opportunities.
In addition, as the remote working has become pervasive, the costs and difficulties of switching jobs are now often lower than before. This is because changing jobs is much less disruptive when workers are able to make the shift from home, from where they already work. Furthermore, given the ability to work remotely, individuals can now try to make bigger career moves with more confidence. For instance, an employee can take up new work for a company that is headquartered outside their city, or even country, without having to move in order to do so. This used to be more difficult before the pandemic, which probably contributed towards higher retention rates.
With remote work offering more career flexibility than ever before, companies need to find ways to improve retention in order to stay competitive. Despite an economic slowdown in 2023, labour markets remain tight in major developed economies such as the US. To keep workers engaged in an environment of shortages, these four strategies can pay large dividends.
After the pandemic, a key issue many companies are struggling with is how to make a remote workplace effective during ‘normal’ times. While the need to work remotely all the time needed no explanation during the pandemic, after the transition, it is not so simple. The key is to foster a remote-first culture from the start of an employee’s journey with a company, beginning with the recruitment process. The roles and responsibilities in a team need to be clearly defined, as lingering ambiguity can breed confusion and resentment. Internal communication, which includes the processes, modes, and tools, has to be kept clear and consistent. Finally, shared knowledge pools and opportunities can help develop a sense of community, that can help keep workers around for longer.
One thing that has not changed with remote working is that a sense of stagnation and unfairness can play a big role in driving retention rates down. With respect to the first, employees generally expect upward mobility from their employers, in particular during times of economic growth. Therefore, having a system in place to frequently reward high-performers, through promotions and higher compensation, boosts talent retention. A key issue that has cropped in the post-pandemic work environment is that remote workers can be at risk of lower access to decision-makers in the company, compared to their in-office colleagues. Organisations need to be proactive in their managerial support systems for remote workers, and fair in performance evaluations, taking into consideration that such employees may not always be best-placed to highlight their work.
Because remote employees are more prone to feeling isolated at the workplace, assigning them a mentor can help mitigate this, thereby boosting the chances of higher retention. Overall, mentorship programmes are a relatively informal way of offering ongoing learning and development to all employees, not just remote ones. But for new remote hires, it can make a big difference by helping them learn the ropes faster, and feeling comfortable in their new roles. Mentors can also help their charges make better connections within the wider organisation, plan their careers using trusted insights, anticipate problems, and self-evaluate their performance. Ongoing mentorship programmes can also improve a company’s hiring image and instil more confidence in remote job seekers.
Whether remote or office-based, designing attractive compensation packages helps incentivise better employee performance and higher retention. While this overall principle remains valid, workers’ expectations about their incentives structure have changed significantly in the post-pandemic labour market. For remote-only employees in particular, many standard previous perks such as office snack bars or reserved parking spaces are no longer relevant. Companies now need to consider how they can improve their remote employees’ lives outside of work too. For instance, employers in the US are likely to be offering more student loan repayment assistance programmes to their workers. Other options include sabbaticals, maternity and paternity leaves, and mental health and wellness support.
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