More than a third of managers are scaling back remote work as pandemic progress takes a hit in an uncertain economic climate, according to a new report from LinkedIn, but short-term cost cutting can lead to a “talent drain” as workers seek better conditions elsewhere, the platform warns.
The LinkedIn study, which spoke to 100 Australian company leaders, found the items on the chopping block were flexible work (77%), learning and development (81%) and employee wellbeing (83%), as a possible recession looms on the horizon.
About 36% of leaders were reducing flexible working and hybrid working roles already.
And half (47%) of all surveyed by LinkedIn admitted they’d also slashed employee sweeteners like WFH internet expenses, training and development, and remote work equipment allowances.
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But Matt Tindale, managing director, Australia and New Zealand at LinkedIn, warned that short-term cost-cutting can have serious longer-term consequences for organisations, particularly in the historic labour and skills shortage gripping the country’s workforce.
“In tougher economic periods there is a temptation to view areas such as flexibility and employee upskilling as discretionary costs, rather than essential investments that create a strong and resilient business,” he said.
“Companies that pull back in these areas risk a demotivated workforce and widening skills gaps which leads to accelerated employee attrition.
“This talent drain, often of your best people, can have a negative effect on long-term business performance.”
The number of occupations experiencing a skills shortage in Australia has almost doubled over the past year, according to the National Skills Commission’s annual update of the skills priority list.
The list, released last month, revealed there are 286 occupations with national shortages, compared with 153 in 2021, with computer programmers and construction jobs among the most in-demand roles.
The shortage is giving employees unprecedented agency to dictate the terms of the job. A recent report from Employment Hero found 50% of hybrid and remote workers would consider quitting their jobs if their employer directed them to return to the office on a full-time basis.
The percentage is even higher for millennials, with 61% more likely to put in their two weeks’ notice.
Interestingly, however, a compromise was popular too, with 47% of respondents agreeing ‘hybrid working’ is better for their work-life balance, 46% stating that it is better for their mental health and 37% agreeing it improves productivity levels.
It comes as the Property Council of Australia sounded the alarm over Melbourne’s empty CBD. In October, just 45% of the offices were occupied, compared to the level before the pandemic, well behind Sydney at 58%, Perth 78%, and Adelaide 76%.
The data showed Australian workers cite working from home as the main reason for staying away, rather than the safety fears that coloured the years of the pandemic.
But it’s up from Melbourne’s occupancy in July which had dwindled to 38%.
Not all companies are embracing the old normal, however. CommBank’s general manager of talent acquisition James Elliott says the big four bank is sticking with its long-term commitment to flexible work, which is a big part of how it attracts and retains talent.
Many of the roles at CommBank do not have fixed hours, allowing staff to adjust their start and end times or even work fewer than full-time hours, like a shorter fortnight, or job-sharing.
The bank also offers a diverse portfolio of leave — additional purchased annual leave (up to four weeks), career breaks, carers leave, community service leave, study leave, compassionate leave, unpaid leave and even three days of “life leave” a year.
“Our priority is what’s best for our customers and meeting the different needs of individuals and teams — people value the benefits of flexibility and the opportunities to connect and collaborate in person,” Elliott said.
“The future of work, and the technology we use to get work done, is evolving at a rapid pace so we’ll continue to evolve our approach too.”