Here's some bad news for employees looking for raises, remote work and shorter work weeks
This week, Payscale released the results of its bellwether survey, the 2023 Compensation Best Practices Report.
It’s not wonderful news for employees: fewer employers are offering pay raises and those that will aren’t exactly being generous. As for folks who love the idea of more flexibility in their working lives? The survey reveals there’s a growing kibosh on remote work arrangements. Senator Bernie Sanders’ four-day work week? Forget about it.
The report, conducted between October 2022 and December 2022, of nearly 5,000 employers headquartered in the U.S. (69%), Canada (8%), and Europe, The Middle East and Africa (17%), is a bit of a downer.
Workers are still hitting the exits voluntarily
It’s been a tough slog in the labor market for many companies. Six in ten organizations experienced labor shortages and trouble attracting and retaining talent in 2022, according to the report. And while many expect that the turnover rate for workers is likely to dip to around 25%, down from 36% in 2022, it’s still a crucial issue.
Last year, for many employers dangling the ability to work remotely was a saving grace when it came to hiring and holding onto workers.
“In our monthly job seeker confidence surveys last year, we found that 60% of job seekers on ZipRecruiter say they would prefer to find remote jobs,” Julia Pollak, chief economist at ZipRecruiter, the employment search site, told Yahoo Finance. “Many job switchers have taken advantage of a hot labor market to move into remote or hybrid positions.”
And for companies, converting jobs to remote “has dramatically increased recruitment and retention, and reduced wage growth pressures since they are now able to recruit in lower-cost parts of the country,” she said.
It’s not that corporations have their head in the sand, they get it. A majority of organizations (55%) said that insisting that workers come to the office puts them in the back seat when it comes to hiring and competing for talent, according to the Payscale data. That’s up 11% from last year when nearly half of organizations felt that pinch.
In fact, the bulk of organizations (51%) surveyed by Payscale “are experiencing resistance by their workers when asked to return to the office,” according to the report.
That defiance won’t surprise Amazon CEO Andy Jassy, who recently announced a mandated return-to-office of at least three days a week beginning May 1 much to the utter dismay of thousands of angry employees who have launched a petition to fight back.
Workers push back on returning to the office; employers aren’t backing down
Less than a quarter of those firms grappling with workers who want to stay remote feel that the impact is great enough to consider a policy change.
Let’s call it what it is, a shrug.
In the meantime, one of the more egregious findings: about a quarter of employers surveyed by Payscale pay employees who don’t come into an office less than those who do for the same position.
A few firms are glomming on to the middle ground — 10% believe that hybrid offices are the sweet spot and have done a swell job of slowing resignations and boosted workers’ job satisfaction and engagement in their work, Payscale found. And according to the data, that’s the work environment for just over a quarter, or 27% of employers.
Most organizations, close to 60%, describe their office environment as either traditional or hybrid, which means that all or most employees would need to live within a commutable distance to an office even if they work from home some of the time, Amy Stewart, associate director of content and editorial, told Yahoo Finance.
“Companies that offer truly remote work, however, which is around 11% of those surveyed, will still have a major competitive advantage this year in attracting and retaining talent,” Stewart said.
Four-day week? Dream on
Senator Bernie Sanders (D-VT) is an advocate of shortening the work week from five days to four — and believes that workers shouldn’t have their pay cut as a result.
“With exploding technology and increased worker productivity, it’s time to move toward a four-day work week with no loss of pay,” Sen. Sanders tweeted from his government account earlier this week. “Workers must benefit from technology, not just corporate CEOs.”
The impetus for his remarks were the new findings from a six month pilot program with about 2,900 workers across 61 companies in the UK that ended in December 2022. The British companies in industries ranging from marketing to construction allowed employees to work four days a week for identical pay.
The upshot: Employee morale, productivity, and retention all increased. And more than 9 in 10 of the businesses will continue the shorter week schedule, according to the report. That’s a good thing because a whopping 15% of the employees who participated said “no amount of money” would convince them to go back to working five days a week.
But don’t get too amped up that you will see anything similar in this country anytime soon, even with Sen. Sanders' endorsement. A tiny 10% of U.S. companies plan to offer shorter weeks in 2023, up from 9% in 2022, Payscale found.
Yahoo Finance Take: There’s little doubt that to build loyalty and a company culture, bringing a team together can be magic, especially for younger workers on-boarding to their first professional jobs. In the end, the hybrid-model seems to resonate and meet the needs of both. Given that employers are still grappling with workers hitting the exits at a brisk pace, this is worth considering. The four-day work week? Like we said, “dream on.”
Kerry is a Senior Reporter and Columnist at Yahoo Finance. Follow her on Twitter @kerryhannon.
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube.
