We surveyed 316 HR leaders about RTO, layoff fears, and how their talent strategy is changing. Many worry that RTO will impact hiring and attrition.
They’re also concerned about the looming threats of both turnover and layoffs: 46% saw attrition increase in the last year.
On top of that, there’s an increased demand for independent workers: 50% say they are more likely to hire freelancers moving forward.
In September, Apple put a hybrid work model in motion, dictating that all employees based out of its Cupertino campus would have to start coming into the office at least three days per week. Dozens of other large companies like Goldman Sachs, Comcast, and Peloton have all outlined similar return-to-office (RTO) policies to foster more collaboration and get back to the way things were before the pandemic.
The takeaway is clear: For many, a return to the office is imminent.
However, according to a recent Gallup survey, 94% of remote-capable workers now want hybrid or exclusively remote work options, and research shows they’re largely more productive away from the office. That’s why employees are pushing back. There have been complaints, protests, and petitions. Some flat out refused—at The New York Times, 1,300 staffers threatened to go on strike.
This clash has a significant cost for HR leaders in charge of retaining employees and hiring new talent. How are they navigating these tough situations while trying to build successful teams? We recently surveyed 316 HR leaders and managers to find out.
Here are the three biggest findings from our research.
1. HR leaders fear the ramifications of a return to the office
Despite serious public pushback from employees, many companies are forging ahead with their RTO mandates.
According to our survey, 37% of HR leaders believe their employers will require more in-office work over the next six months. Among mid-market and enterprise companies, the expectation is even higher, with 43% predicting more in-office time.
The big problem is these RTO plans come across as arbitrary compromises instead of purposeful decisions. Why three days a week instead of two? Or four? What are workers doing with this time in the office that maximizes their abilities?
These policies can lead to serious negative consequences for HR leaders. Forty-eight percent of respondents are concerned that mandating a return to office would hurt their ability to recruit talent and retain current employees.
It’s not that all in-office work is a waste. Remote work has its trade-offs—ask anyone dealing with Zoom fatigue. It’s just that businesses usually want more output and efficiency, yet RTO plans can actually prevent them from achieving those goals. A better system might be to assign a purpose to in-office activity, like one day a week for brainstorming sessions and a few days a month for mentoring junior employees.
2. They’re also concerned about the looming threats of both turnover and layoffs
Judging by the monthly nonfarm payrolls report from the U.S. Department of Labor Statistics, the job market is booming. In particular, professional and business services—which includes tech—has been on fire, adding an average of 72,000 new jobs every month. These rates are well ahead of pre-pandemic levels. Workers and employers should both feel great.
And yet, they don’t.
Constant layoffs have generated headlines this year, and according to our study, they’ll likely continue. Roughly 23% of HR leaders anticipate layoffs at their companies in the next 12 months, while 19% are unsure.
Despite the threat of more downsizing, HR leaders are even more concerned about employee attrition. In the last year, 46% said staff turnover has increased, as workers have sought out higher salaries and more flexible work styles during the Great Resignation.
As a result, many companies are investing more in hiring: 58% of HR leaders told us their budgets for talent acquisition and recruitment have increased since 2021. This trend might be a necessary short-term strategy, but it could make potential layoffs even worse if recruiters aren’t able to fill open roles with the right people.
3. As a result, there’s an increased demand for independent workers
With full-time hiring in flux, it makes sense that company leaders are warming to the idea of blended teams, combining traditional employees with freelancers. In our study, 50% of HR leaders said their reliance on independent contractors has increased in the last year.
Given how unpredictable the economy is and how volatile the talent market has been, we can expect HR teams to continue leaning on freelancers. Currently, 42% use a platform like Toptal or Upwork to source product and engineering talent. Fifty-one percent say they are more likely to hire remote contractors in the future, which would save costs if employees have to return to the office.
Amidst all this uncertainty, only one thing seems certain: Hiring managers will have to get creative with how they develop their teams.
Interested in exploring these trends more? Check out the full report here to see all of our findings.