What trends will change the business landscape?

Deep Kalina • 3 years ago

Much of 2020 and this year was spent adapting to unprecedented and extraordinary circumstances. The pandemic upended our everyday lives and forced us to adopt new habits, with health and safety set as priority. It will surely take years to fully grasp the impact of it all but now that there’s a glimpse of light at the end of the tunnel, individuals and companies alike get to review some of the newly created habits and decide on the most important takeaways. In today’s blog post, we are going to talk about how remote work affected productivity levels; going towards not just flex location but flex time, and finally, the rise of contract workers.  

Location Shifting – The future of Work is Remote  

One of the greatest shifts for companies of all types and industries was moving their operations to work from home. And whilst remote work is hardly a novelty on the business scene, it was still viewed by many executives as concerning in terms of productivity. Well, it turns out it did affect productivity levels but not at all negatively, with several recent studies confirming the same findings. According to a Mercer survey of nearly 800 employees, 94% said that productivity levels were the same (67%) or higher (27%) since the beginning of remote work. Another study by FlexJobs cites several important reasons, such as fewer interruptions, a comfortable workspace, a quieter work environment and more focused time.

And while 2020 was definitely the year of remote work, research indicates that the trend will only continue to grow, estimating that by 2025, around 70% of the workforce will be working remotely, at least 5 days a month. And the reasons behind the surge in popularity amongst employees are pretty straightforward – increased productivity, better work-life balance and lack of commuting. Out of 96% of employees hoping to prolong their work arrangements post-pandemic, 65% want to become full-time remote workers, whilst 31% desire a hybrid work environment. When you take into account that so much as 27% are willing to take a 10 to 20% pay cut in exchange for working remotely, it becomes clear that it makes little sense for companies to resist these changes.

In May, Twitter made a big announcement about making their work from home policies permanent, with other business giants such as Facebook and Shopify following suit with the same decisions. But the tectonic change is visible far and wide – a recent Gartner survey revealed that 82% of company leaders plan to permit remote working some of the time, with nearly half (47%) saying they will permit employees to work remotely full-time, whereas others plan on granting flex days (43%) and flex hours (42%). 

Time Shifting – The fall of 9 to 5 

Since change is rarely onefold, flexibility in the working environment doesn’t mean just where the work gets done but also when it gets done. A strict 8-hour workday is becoming a thing of the past and companies wanting to move with the times are zeroing in on these demands. The umbrella term is agile or flexible working and it describes roles breaking the stiff 9-to-5 norm. It takes various forms like deciding on when to start the work, working four days a week or finishing earlier on certain days, packing weekly hours into fewer days, breaking the business day into separate windows of time, also known as the windowed working, or even job-sharing where two people divide responsibilities of one job. 

In recent years, it became clearer that people need more than just exciting job titles and shiny perks, they are looking for the right cultural fit, better work-life balance, effectively reducing stress levels and having a sense of belonging at work. Employees have different needs and companies have to discern what they can or can’t accommodate but research once again speaks in favor of flexibility. The majority of employed people agree that more flexibility would increase their quality of life, including better care of mental health (80%), reducing stress levels (83%), and making them generally happier (92%). 

And it’s not just about taking care of employees and their needs, 89% of companies are reporting better retention rates due to flex working options. It’s also one of the factors that might make a company stand out. By offering flexible working patterns, companies might gain that competitive edge to hire the best talent, when you consider that 92% of millennials cite flexibility as a top priority while hunting for a job.

Shift in team composition -The rise of contract workers

And since flexibility is a trend on the rise, just as much as a leitmotif of this post, let’s talk about another form of working that’s currently in high demand – hiring contractors. Contract positions are arrangements in which individuals are hired for a predetermined period in order to complete specific tasks, and they can range from a few weeks to few months. 

Taxwise, contract workers will likely be viewed as self-employed which is one of the reasons why it’s so popular amongst companies. According to OnContracting estimates, contractors account for 40 to 50% of the workers at most technology firms and save them up to $100,000 a year. One example is Google that currently hires 102,000 full-time employees and roughly 121,000 temps and contractors. 

But it’s not solely about saving money. Companies oftentimes have short-term demands that are project-specific and require special skills. And although taking care of your own finances, not having regular employee benefits and always looking for new opportunities isn’t for everyone, some people like testing the uncharted waters, not being tied down by one employer, broadening their business network and constantly upgrading their skill set. Taking all that into consideration, it makes sense that it’s not just companies dictating the rise of contract working but that a large majority of workers do it by choice. And since last year was a good example of how things can change in a split second and job security shouldn’t be taken for granted, the only thing you can really rely on is knowing your own abilities and strengths. 

In this ever-changing business environment, it’s difficult to draw definite conclusions but we anticipate that these trends will drive companies to:

  •  reevaluate their team structures in a way that will effectively respond to remote work demands while maintaining company culture intact,
  • work out the most effective ways for remote and asynchronous processes to drive the best results, 
  • leverage these cost-saving opportunities while keeping the quality of products at the same or an even higher level. 

Let’s finish off with this interesting food for thought – based on the current freelance growth rates, it is projected that in 2027 freelancers will make up 50,9% of the total U.S. workforce. Only goes to show that change is the only constant, don’t you think?

If you’d like to share your thoughts on these business trends and their implications, feel free to contact me. I’m always up for a good chat!