Fed rate hikes: Cause for pause?
Fed watchers see potential for a pause in rate increases, but recent reports show the economy still runs hot.
The Covid-19 pandemic has upended much of how consumers shop, businesses interact, and work gets done, replacing prior trends with new norms and an increased focus on technology. The U.S. labor market was heavily disrupted as many employees shifted to remote or hybrid work situations overnight, while increased work from home opportunities helped to drive a reshuffling of workers across many sectors. The post-pandemic work environment promises to be much different than in years past as employers adapt to changing needs for employees and new ways to reach customers.
Perhaps unsurprisingly, in-person activities (including eating out, going to the movies, travel, etc.) felt the biggest impacts from the pandemic as infections increased and people began social distancing. Because of this, service companies have seen significant turnover during the pandemic as workers looked to other parts of the labor market where health concerns were reduced and hours were more consistent. As spending on services picked up in 2021, many services firms found it increasingly difficult to fill open positions as many former workers had moved on to other job opportunities or were searching for something different in the post-pandemic market.
Changes brought about by the pandemic were significant in office settings, too. Although down from the peak in 2020, a Gallup survey from late 2021 showed that 45 percent of all workers were working remotely at least part of the week, including two-thirds of white-collar employees. As a result of the pandemic, working from home has gone mainstream and has become an increasingly important factor for employees when choosing where to work.
The flexibility and improved work-life balance provided by remote working has forced many employers to be more creative with their approach to the future of work. A tight labor market has placed a premium on options for workers away from the traditional office setting.
The workforce of the future is expected to be much more fluid across all types of jobs and sectors. The market will focus on necessary skills and experience rather than on location or background, opening employment opportunities for both younger and older workers. Going forward, hybrid teams with employees in multiple locales should become standard, forcing leaders to rethink collaboration strategies and candidate pools.
While the share of the labor force at home is likely to wane from its pandemic peaks, remote work is here to stay within most sectors. The more that businesses can adapt to a remote work environment, the more success they will have at retaining workers and thriving in the post-pandemic world. Meetings with at least some of the audience engaging virtually will become the norm, changing the workplace dynamic for many companies.
Flexibility has become key in the post-pandemic job market as employees increasingly value positive work-life situations. While more workers have shifted to being permanently work from home, a larger share will operate under hybrid models which still enables some face-to-face interaction to help develop workplace cultures.
Importantly, businesses need the proper systems in place to support virtual meetings, remote working, and hybrid options. This places greater emphasis on technology needs and enables workers to work together without being in the same location. This may entail large-scale investment by companies to maintain a seamless environment for workers and leaders.
While compensation will always be a key factor for workers, remote working has become a key incentive in light of the shift in workplace expectations since the start of the pandemic. Workers are especially valuing advancement opportunities and positive work-life balance when comparing job options. Businesses will have to adapt to changes brought by the future of work in order to keep talent.