She was hired via Zoom and was laid off in the same way. If the economy shows signs of further weakness, the flexibility and perks that many workers have grown accustomed to over the past few years will likely dissipate.". 2023 CNBC LLC. So how can organizations continue to offer the flexible work arrangements top talent wants and mitigate anxiety among remote workers? As more people work. Remote workers also may not have the same legal right to notice of a layoff under federal and state laws. else if(currentUrl.indexOf("/about-shrm/pages/shrm-mena.aspx") > -1) { By providing training and development opportunities, offering flexible work arrangements, and encouraging collaboration and teamwork, companies can create a supportive and connected remote work environment that benefits both the employees and the company as a whole. Hundreds of Amazon staff walked out to protest the company's return to office policy, environmental impact and recent layoffs in Seattle on May 31. No desk to clean out not for White, who like millions of others across the country had been working from home. And 67% said this anxiety had an impact on their productivity. The Hazards of Remote Employee Layoffs: Wage and Hour Issues - SHRM Remote, a company that offers payroll and onboarding tools for global teams, is laying off 100 staff or about 10% of its workforce. But as the growing number of remote layoffs prove, the landscape has changed since then. For instance, a large financial services company was able to maintain employee morale and productivity by implementing a comprehensive support program for its remaining employees. Be free from office politics and layoffs. You have successfully saved this page as a bookmark. All corporations say People are our most important asset, but they dont really seem to believe that., Calling someone talent is quite different from calling them a person, she added. Mr. Hackett said companies frequently take a rushed approach to layoffs, as their shareholders watch other industry layoffs happening and expect the same, which contributes to a climate of alarm and also leaves employers open to being sued for wrongful termination or violations of the WARN Act, a 1998 labor law that requires large businesses to give advance notice of mass layoffs. The remote work setup poses challenges for managers in evaluating the performance of employees, leading to the risk of making incorrect decisions regarding layoffs. However, with remote work, many companies are opting for laying off employees through email, which can be perceived as cold and inconsiderate, leading to negative impacts on employee morale and company culture. By focusing on the actions outlined above, managers can connect remote and hybrid team members to each and to the larger organization, making them feel more included and less anxious. However, with the right support and resources, companies can mitigate these effects and ensure that their employees remain motivated and productive. White, who studied civil engineering and education, still doesnt see an inherent disadvantage in job security for remote workers. What do you think of this?. In the case of remote work layoffs, this can result in incorrect decisions. When layoffs occur in a remote work environment, the remaining employees may feel as though they are carrying the burden of the company alone, leading to an even greater decline in morale. All rights reserved. And even more (80%) are confident they would find a new job in six months or less if they lost one today. This resulted in a loss of a valuable employee and harm to the company. At the mortgage lending company Better.com, Rena Starr, 33, missed a short and unexpected Zoom meeting in 2021, then texted her boss to learn she and more than 900 of her colleagues had been fired during it. The group said employees are walking out to highlight a "lack of trust in company leadership's decision making.". 4 Ways Remote Work Complicates Layoffs - Forbes But what struck us most were the notable differences between the responses of in-person and remote team members. Layoffs are among the most challenging life experiences, causing more psychological stress than even divorce, according to one study. Shortly after losing her job at an e-commerce marketing company in November, Erika Kwee, 32, heard from a colleague who had crowdsourced a list of opportunities and recruiter contacts to help Ms. Kwee navigate her search process. Please log in as a SHRM member. Ive been hearing it on these podcasts and being like, Oh thats a shame, thats a terrible way to do it, she said. This data also shows that tech workers who work remotely are less likely than non-tech workers who work remotely to think they can get another job within a month if they lost theirs. Please purchase a SHRM membership before saving bookmarks. In spring 2020, for example, he got an 8 a.m. call from his longtime boss and was quickly told that he was being laid off from his hospitality staffing role and would be hearing from human resources about the details later that morning. However, this can result in problematic implications as the tax authorities may consider it as payment to the employee, subject to taxation. The news was first reported by Publico and was subsequently confirmed by sources and the company to Insider. White, who lives in Dallas, said she had no reason to think so, but added, I really cant say.. But in a remote-work world, it might just mean rolling out of bed to find an email that you never need to return to the office and then simply going back to sleep. And workers are demanding more money than ever before to move to a new job, according to New York Fed data released this week. But its all part of the evolution of layoffs, which Cappelli says used to be temporary and focused on unionized and contracted blue-collar employees. 320 . Remote's $300 million April funding round was led by SoftBank. Job cuts are hitting tech firms across the board, as the Russia-Ukraine war, rising interest rates, the pandemic and a stock market rout combine to take their toll. Get this delivered to your inbox, and more info about our products and services. The tech industry, where layoffs have been concentrated, is part of the data story, due to its broader embrace of remote work relative to other industries. Shed been laid off, too. Non-Tech. The state in which wages must be reported and unemployment tax is due can change as a result of remote work. Dispersed employees tend to lack shared context, from body language to shared kitchen snacks to inside jokes. Remote: $3 Billion Payroll and Remote Work Startup Cuts Jobs Thats been the case for thousands of workers who have been put on the chopping block within the past year; as layoffs continue to roll through the workplace due to rocketing interest rates, recession fears, and overhiring during the pandemic, more companies are encouraging people to work from home when they announce job cuts. These mental shortcuts often lead to errors in judgment and decision-making, such as confirmation bias and empathy gap. Overall, the survey finds worker morale higher now than at any point in the past three years. And they may fear less employers on the open market are offering the same work flexibility as their current job. document.head.append(temp_style); You may be trying to access this site from a secured browser on the server. The permanent layoffs that were familiar with todaylike those weve been seeing rock the white-collar workforce in industries like tech and financehave actually only been around have since the 1980s. She also noted that for professional services workers, it can take longer to find a job because they often have more savings and are able to take their time in moving to a new position. Morale is even higher for younger workers, but according to Momentive "morale is up among nearly all workers regardless of gender, race or job level.". Got a confidential news tip? For example, Washington State employees must be paid their final wages no later than the next regular payday following separation from employment. The so-called WARN Act requires employers to give 60 days notice of a mass layoff or plant closing, although there are exceptions. Worse, you inadvertently send the message that you only care about pressing tasks and to-dos, which can leave your team feeling expendable and stressed. Everyone was in the same boat, said Linda Shaffer, chief people officer at Checkr, GoodHires parent firm. Amazon workers walk out amid layoffs, citing concerns for climate Its scary because Im like: Will I ever have a savings account? Mr. Barnes resonated, painfully, with the treatment of workers as interchangeable and expendable. Different regions may have varying requirements regarding notice periods, severance packages, unemployment benefits, and redundancy procedures, making it imperative for companies to be well-informed. Having helped 22 companies figure out long-term hybrid and remote work arrangements, I have observed the good, bad, and the ugly of remote work layoffs. Remote tech workers are more fearful than in-person tech workers, just like remote workers overall are more fearful than in-person workers," Wronski said. To mitigate the negative effects of remote work layoffs, companies must be proactive in providing support and resources to remaining employees. April 8, 2023, 6:00 AM PDT More companies are encouraging workers to stay at home come layoff time. Meta is making a U-turn on its pro-remote work culture - Quartz Losing a job can upend workers finances and their sense of self, and layoffs in the world of remote work have in many cases been especially destabilizing, with employer missteps fueling uncertainty and unnecessary unknowns. Lightcast says the data on remote work opportunities remains positive, with no weakening in the overall remote work marketplace. With remote work becoming the norm for many companies, layoffs can create new challenges for companies in maintaining employee morale and productivity for the remaining employees. That means sending out encrypted meeting IDs and locking in sufficient time for the meeting so if it goes a little long, no one can suddenly join in, he advised. Specifically, 24% of those working remotely say they could find a new job in one month if they lost their current job, versus 41% of fully in-office workers who say the same. Stay up to date with what you want to know. Nineteen states, including California, Illinois, and Minnesota, grant employees the right to access certain employment documents. 2023 Fortune Media IP Limited. The company cited ongoing economic uncertainty and a focus on sustainable growth. Calling typically remote workers into the office simply to be laid off, Cappelli says, would be humiliating. Poll: Rare bipartisan support for reforming Californias ballot referendum rules. Remote employees were 32% more likely to feel anxious in the wake of news about layoffs and were far more concerned about getting a new manager during a reorg. Briana Boehmer, 44, drove to her office in Boulder last Wednesday for what she thought was a normal executive meeting at the fitness technology company where she was the chief operating officer and had spent nearly six years working long hours and weekends to support customers. And, Cappelli says, companies cut down on offboarding after the Great Recession and have come to rely on their corporate lawyers advice. Now 85 percent of workers rank job loss as a top concern, according to the latest Edelman Trust Barometer. Remote Workers Face a Lonely Wave of Layoffs - The New York Times Advertisement Laid Off in Your Living Room: The Chaos of Remote Job Cuts Angst rippled across laptop screens this month, with. But in one large-scale survey by Beautiful.ai, a maker of business-presentations software, 60% of managers said that remote workers would probably be laid off first. Remote work can complicate layoffs by making it more difficult to maintain employee morale and productivity for the remaining employees. When the meeting started, the founders seemed nervous. Aim to provide more transparency where you can, and to set the tone for conversations by sharing what youre experiencing. For CEOs who have a strong preference for having people back in the office, he said, letting go of remote workers could be a way of killing two birds with one stone. But there were notable differences between the responses of in-person and remote team members: Remote employees were 32% more likely to feel anxious in the wake of news about layoffs and were far more concerned about getting a new manager during a reorg. It was a peculiar moment for Ms. Boehmer, who had spent recent months following the news about chaotic layoffs at other tech companies. Opinions expressed by Forbes Contributors are their own. Please log in as a SHRM member before saving bookmarks. Fifty-nine percent of American workers are not concerned they or someone in their household will lose a job in the next few months, according to a new survey of the labor force from CNBC and Momentive. Most US Remote Workers Would Take Pay Cut to Keep WFH: Poll You dont need to suddenly become an open book, but saying something as simple as, I know theres been a lot of change lately, and that can be stressful. A Division of NBCUniversal. These meetings offer a great opportunity to intervene and try to alleviate your teams anxiety, but you might need to reconsider how you run them. These situations demonstrate the difficulties in evaluating performance in a remote work setup, which can result from cognitive biases. Creating the conditions for wellbeing and productivity in a remote or hybrid setting can initially seem difficult. Beth Anstandig, a psychotherapist in the Bay Area, is seeing her clients bear the mental toll of this period. To complicate matters even more, the increasing number of remote employees can make layoff logistics difficult to navigate. This worker confidence makes sense in a labor market still running exceptionally hot, but there are some notable exceptions, starting with the niche of workers that have been the envy of the rest of the working world during Covid. The status quo bias can also impact the way that companies handle layoffs during remote work, as companies may be more likely to continue with traditional layoffs methods, such as cold emails, without considering the impact on employee morale and productivity. So too, it seems, does the location. So, face-to-face layoffs were encouraged as a way to provide greater support in ensuring the employee would be okay, such as offering assistance and answer questions. Recent Layoffs Result in Even More Work for Remote Employees. Sign up for free newsletters and get more CNBC delivered to your inbox. May 23, 2023, 10:43 AM PDT. Amazon recently initiated the largest layoffs in its 29-year history . It might not be such a bad thing. In a. , 89% of human resources leaders told us that their teams have recently voiced concerns about job security, leadership changes, or reorgs. This can result in a significant tax bill for the employee, causing negative impacts for both the employee and the company, including negative media attention. At some companies, people noted that their teammates were far more helpful than their employers after a layoff. Noncompliance may result in significant penalties, and in some cases, private causes of action with the ability to recover attorneys' fees. Born out of necessity in the pandemic, the once-reviled virtual layoff seems here to stay. For instance, a mid-sized IT firm let go of a highly productive remote worker as the manager had no personal connection to the employee, ignoring their valuable contributions to projects and the positive impact on team morale. She is searching for a new job another fully remote one. Others said that even if bias could be avoided, those who were not present would miss out on opportunities to demonstrate their abilities when new and unexpected situations arose in the office. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice| Do Not Sell/Share My Personal Information| Ad Choices Heres what to know about tenant protections lawmakers are considering. Remote workers are the most likely in the U.S. labor force to worry about being laid off and struggling to find a new job quickly, according to a CNBC|Momentive Workforce Survey. People who go to the office at least some of the time whether that be hybrid or fully in person were 24% less likely to say that uncertainty has impacted their productivity over the past six months. Angst rippled across laptop screens this month, with dozens of companies announcing layoffs and finding ways to breed extra chaos in the process. It might not be such a bad thing. Over the past year at Humu, weve analyzed employee engagement survey responses and behavioral data from more than 80,000 employees. The 7,000 layoffs which represent 3.2% of Disney's total headcount of about 220,000 worldwide as of Oct. 1, 2022 are part of Disney's efforts to achieve about $5.5 billion in cost savings. After Meta layoffs, Zuckerberg unveils future of Facebook parent - The June 1 . The workforce as a whole expects in-person workers to have better career advancement opportunities (53%); few think remote workers will fare the best (14%). Paul E. Cirner is an attorney with Ogletree Deakins in Portland, Ore. 2022 All rights reserved. Please enable scripts and reload this page. Remote positions are more likely to be offered in jobs that require a Bachelor's degree and the growth in remote work is heavily in college-degree occupations. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRMs permission. HR leaders know thats a really bad policy, that it would be a blunt tool, Challenger said. To join the CNBC Workforce Executive Council, apply at cnbccouncils.com/wec. This is going to be the lasting impression that sticks with your previous employees, your current employees and all future employees, said Tanner Hackett, chief executive of Counterpart, an insurance technology company that helps small businesses. Trip Barnes, 39, who works in Atlanta, has been laid off three times in the past three years, each experience bringing pangs of grief in a different form. Am I ever going to own something? But the answer is not to force everyone back into the office. With the recent economic downturn, layoffs are beginning to occur, and for the first time a significant number of remote employees may be included in layoffs. This can include offering training and development opportunities, providing regular feedback and support, and encouraging collaboration and teamwork. But they were all laid off before they had the chance. A big part of your job is to create an environment in which each team member feels comfortable being genuine and flagging concerns. And 67% said this anxiety had an . Try to create opportunities for remote employees to work on cross-functional projects (people tend to feel closest to the people they work with the most) or connect your team members to people from another department for informal chats. Remote Remote, a startup that makes it easier for businesses to hire internationally, is laying off around. What do you think of this?. This process can be challenging, both in terms of time and cost, especially if the equipment is not returned promptly.