Big Tech’s big problem: Let employees stay home from expensive campuses or ‘risk losing 30% of their workers’
Tech workers got used to working from home during the pandemic, and that could be a big problem for Big Tech.
Companies such as Apple Inc. AAPL,
For more: Big Tech is suffering from a ‘Great Resignation’ of workers, who say ‘It’s a good time to leave’
About four in 10 people said they would look for another job if they are forced to return to the office full-time, according to a new analysis by the University of Chicago’s Becker Friedman Institute for Economics. Of particular concern to many employers is that half of Gen Z employees say they’ll leave their current job if they’re not given a hybrid work option, according to a new study commissioned by workspace-technology company Kettle of 1,000 U.S. Gen Z workers.
In tech, the number may be much larger. Zoom Video Communications Inc. ZM,
“There is a sentiment that people can work from home very effectively, and they may not want to return to the status quo of the office,” Mabel Abraham, an assistant professor of management at Columbia Business School, told MarketWatch. “We have reached a pivotal moment for employers to stick with the status quo and risk losing 30% of their workers or to reinvent how they do work.”
Midsize Silicon Valley companies are showing more flexibility with work-from-anywhere incentives, as well as setting up operations in smaller cities. Twitter Inc. TWTR has decentralized its workforce the past few years and actively hired in Atlanta and Miami. Dropbox Inc. DBX estimates it will open in at least a handful of new cities over the next 18 months.
Big Tech seems to be sticking to its guns, however. Employees at Apple and Google objected to being rushed back to the office before plans were delayed by the spreading COVID Delta variant, and experts with whom MarketWatch spoke suggested it leaves them vulnerable to having employees poached by smaller public tech companies and startups. Apple and Google have plowed billions of dollars into sprawling campuses teeming with sophisticated high-tech machinery and infrastructure that function as latter-day industrial hubs.
See also: Big Tech is swallowing the rest of Silicon Valley
Within these multi-building facilities are elaborate ecosystems of food service, gyms, medical facilities and custodial services that employ thousands of people, whom some Big Tech companies have been paying throughout the pandemic. The campuses and the services they offer were considered perks by employees before the pandemic, but aren’t as alluring as the comforts of working from home, free of an excruciating commute and overcrowded offices.
At the same time, smaller companies that are flush with cash from venture capitalists or initial public offerings seem very open to shaving the costs of occupying and maintaining office space in the pricey San Francisco Bay Area while attracting proven talent.
“I strongly believe only 10% of people want to go back to the office full-time. We are targeting talent at Big Tech with the flexibility to work from home,” Greg Woock told MarketWatch.
Woock, the CEO and founder of San Jose telecommunications company Pinger Inc., reopened his offices in late July with the expectation that most employees will remain remote with only occasional office visits.
“People want to work remotely, and they are voting with their feet,” he said.
See also: How tech companies are bringing workers back to the office: Slowly and with ‘social’ incentives
“Remote work is a good employee recruitment and retention tool,” said Todd Blaschka, chief operating officer at analytics company TigerGraph, who has seen a flood of resumes from Big Tech workers and will also use a flexible atmosphere to woo them.
“Remote work is increasingly a bargaining chip for very valued employees,” said Columbia Business School professor Adam Galinsky, who expects remote work to become a major recruiting magnet. “The attitude is, ‘You want to retain me, then I get to work remote three days a week.’”
For the past year overall, Big Tech has been pretty safe. The average attrition share — the number of U.S. employees who left a company divided by that company’s total number of U.S. employees — across Microsoft Corp. MSFT,
But the predicted attrition rate in tech in the second quarter, 11%, exceeds the overall job market at 8%, as more workers insist on working from home and taking more control of their lives during the pandemic, according to Elora Voyles, people scientist for employee-engagement software company Tinypulse.
Three out of four employers reported their remote workers were experiencing exhaustion, and about two-thirds of employers believe a hybrid model is the best approach to work going forward, Voyles said.
