future of remote work mckinsey

Though the aviation industry has committed to achieving net-zero flying by 2050, 1 its path to reaching that goal is complex. 3 Further, our analysis shows that closing the pay gap could translate to a 30 percent increase in the average BBP womans annual salary. The tragic context of the COVID-19 pandemic has accelerated this shift as many companies around the globe are instructing staff to continue working from home and are racing to develop their remote-working capabilities. Because communicating about the future can drive performance outcomes today, leaders should consider increasing the frequency of their employee updatesboth to share whats already decided and to communicate what is still uncertain. Already, at a time when many companies are having to furlough/lay off employees, we see many others ramping up recruiting, urgently looking for workers to meet rising demand for certain products and services. Across the board, employees are eager to see organizations put a greater emphasis on flexibility, competitive compensation, and well-being once the pandemic is overand conversely, theyre concerned that future work, regardless of whether it is on-site or remote, will negatively affect these needs. To make a floral designers job more remote would require dividing his various tasks among all employees in a flower shop. For example, Amazon pledged $700million to retrain 100,000 employees for higher-skilled jobs in technology; JPMorgan Chase made a five-year, $350-million commitment to develop technical skills in high demand; and Walmart has already invested more than $2 billion in wages and training programs. Become amember of CHROs on the Go. WebIn this ESG report, we look at some of the key highlights that McKinsey completed in 2022 to create a more sustainable, inclusive, and growing future for all. Unless leaders address the sources of employee anxiety, pandemic-style productivity gains may prove unsustainable in the future.1Besides anxiety and burnout, longer-term productivity in a hybrid virtual model will also require addressing the organizational norms that help create a common culture, generate social cohesion, and build shared trust. What Will the Workplace Look Like in 2025? - SHRM Use tab to navigate through the menu items. Decarbonizing aviation: Executing on net-zero goals | McKinsey Across the board, employees are eager to see organizations put a greater emphasis on flexibility, competitive compensation, and well-being once the pandemic is overand conversely, theyre concerned that future work, regardless of whether it is on-site or remote, will negatively affect these needs. Anxiety is known to decrease work performance, reduce job satisfaction, and negatively affect interpersonal relationships with colleagues, among other ills. Hybrid models of remote work are likely to persist in the wake of the pandemic, mostly for a highly educated, well-paid minority of the workforce. We find that remote work potential is concentrated in a few sectors. He cites a July 2022 McKinsey survey of 13,532 global workers showing that flexibility is behind only salary in motivators to stay in a role. future Before Burning out. WebRemote work will be here to stay post-pandemic, but more likely in advanced economies and in higher concentrations among workers in highly skilled roles and those who are highly future Employees who feel included in more detailed communication are nearly five times more likely to report increased productivity. Heres a summary of McKinsey Global Institute findings. Hotdesking isn't just about saving costs or managing space effectively. Future of remote work in numbers Is remote work as effective as office work? Future Due to the physical nature of most of their work activities, occupations such as transportation, food services, property maintenance, and agriculture offer little or no opportunity for remote work. Employees without children under 18 are nearly three times as likely to prefer on-site work, but the majority still prefer more flexible models. Less money spent on transportation, lunch, and wardrobes suitable for the office may be shifted to other uses. Talent at risk. But these new jobs will require specialized skills. The obvious recommendation for organizational leaders: share more with employees, even if youre uncertain about the future, to help improve employee well-being now. The pandemic has left a huge remote work footprint, and has effectively given way to long term structural changes in the manner of work and economic patterns. Why workers are still winning the return-to-office fight Nursing assistants must work in a healthcare facility. To acquire scarce talent, particularly well-educated and digitally fluent professionals, companies also need to develop creative ways of identifying unconventional candidates. Remote work does not have to lack spontaneity. To emerge stronger from the COVID-19 crisis, companies should start reskilling their workforces now, A blueprint for remote working: Lessons from China. 3 Further, our analysis shows that closing the pay gap could translate to a 30 percent increase in the average BBP womans annual salary. Employees also fear that on-site work will lead to a greater chance of getting sick and that remote work will reduce community and collaboration between colleagues. But while productivity may have gone up, many employees report feeling anxious and burned out. WebApril 2021 As organizations look to the postpandemic future, many are planning a hybrid virtual model that combines remote work with time in the office. Moodys Analytics predicts that the office vacancy rate in the United States will climb to 19.4 percent, compared to 16.8 percent at the end of 2019, and rise to 20.2 percent by the end of 2022. These employees were almost three times more likely to report feeling burned out. Whats next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries, What 800 executives envision for the postpandemic workforce, The future of work in America: People and places, today and tomorrow. What does a future of remote work look like for Massachusetts? In describing the hybrid model of the future, more than half of government and corporate workers report that they would like to work from home at least three days a week once the pandemic is over. Gen Z mental health: The impact of tech and social media. Burnout is especially pronounced for people feeling anxious due to a lack of organizational communication. The virus has broken through cultural and technological barriers that prevented remote work in the past, setting in motion a structural shift in where work takes place, at least for some people. According to McKinsey research, organizations with robust ethnic-minority representation in leadership teams are 33 to 36 percent more likely to outperform their peers on profitability. But while productivity may have gone up, many employees report feeling anxious and burned out. June 7, 2023 | Article DOWNLOADS Article (9 pages) Online programs, both remote and hybrid, are capturing a wider share of higher education across the world. Anxiety at work. Anxiety is known to decrease work performance, reduce job satisfaction, and negatively affect interpersonal relationships with colleagues, among other ills. Todayly Inc | 9450 SW Gemini Dr, PMB 77681 Beaverton, Oregon 97008 US, Tried and Tested Solutions to the biggest Remote Work challenges, A checklist for onboarding remote employees, WFH: A Comprehensive Guide to Working Remotely from Home. Over the past few years, B2B sales organizations have been in a race to meet altered buyer preferences in a challenging labor environmentpivoting reps from the field to at-home offices, enabling remote interactions, and finding out how to create customer intimacy in virtual settings. Communication breakdown. The lack of clear communication about the future of postpandemic work also contributes to employee burnout. Hybrid remote work has important implications for urban economies. Collaboration tools, and training for those tools, also rate highly for employees, as does reimbursement for remote-work office setups. Lessons from McKinsey: Future of Work, Technology, and More Advances in technologies such as cloud computing and online collaboration tools have enabled remote working in many jobs that once required in-person interactions. 4 reasons why bosses are fed up with remote work | Fortune In general, workers whose jobs require cognitive thinking and problem solving, managing and developing people, and data processing have the greatest potential to work from home. For more details on how to successfully embrace the shift to remote working, please see . Valuable as a detailed vision for postpandemic work might be to employees, 40 percent of them say theyve yet to hear about any vision from their organizations, and another 28 percent say that what theyve heard remains vague. 1 Ping An successfully embraced the shift to remote working in the first phase of the crisis by establishing smaller cross-functional teamswith clear objectives and a Businesses have had to quickly embrace remote working in the crisis contextcompanies that systematically address the resulting challenges can turn remote working into a competitive advantage. Conversely, bidding wars are breaking out in suburbs and smaller cities as remote workers seek less harried, less expensive lifestyles and homes with a room that can serve as an office or gymthough it is unclear how successful companies will be with workers scattered in far-flung locales. A survey conducted in China in March 2020 showed that, on average, more than 60percent of work communication took place online during the coronavirus pandemic.5McKinsey & Company analysis, Survey on Centered Leadership and Agile Work in Coronavirus Epidemic in China conducted on March 1218, 2020. Image:Reuters/Eva Plevier. The potential for remote work varies across countries, a reflection of their sector, occupation, and activity mix. And with the onslaught of the pandemic, as workers across industries figure out how to adapt to rapidly changing conditions, companies have to learn how to match those workers to new roles and activities. These employees were almost three times more likely to report feeling burned out. This article outlines our findings and offers a three-step action plan that higher education institutions can use to That may be an underestimate, since employees experiencing burnout are less likely to respond to survey requests, and the most burned-out individuals may have already left the workforceas have many women, whove been disproportionately affected by the COVID-19 crisis. At organizations that are communicating vaguely, or not at all, about the future of postpandemic work, nearly half of employees say its causing them concern or anxiety. Considering the lifestyle change when working from home, the analysis goes deeper on the economic implications that might result with workers shift in consumption patterns. Jobs with the highest physical proximity are likely to be most disrupted. No. While remote working was already gaining currency before the crisis, the pandemic and the step-change in use of videoconferencing globally has shown that remote working, where possible, is here to stay. Without frequentation in restaurants, or use of transportation and fuel to get to work, these urban centers are most likely going to face major price decreases. Over the past several years, organizations have adapted to seismic changes in their environmenta global pandemic, war, supply-chain disruptions, the rise of remote work, and a reconceiving of the corporation as a sustainable, inclusive enterprise, rather than just a short-term-profit focused business. Across all sectors, 38 percent of respondents expect their remote employees to work two or more days a week away from the office after the pandemic, compared to 22 percent of respondents surveyed before the pandemic. As tech companies announced plans for permanent remote work options, the median price of a one-bedroom rental in San Francisco dropped 24.2 percent compared to a year ago, while in New York City, which had roughly 28,000 residents in every square mile at the start of 2020, 15,000 rental apartments were empty in September, the most vacancies in recorded history. WebThe McKinsey analysts said AI could substantially increase labor productivity but that workers could need help moving to different work activities or even retraining to another job. One way is to find out what employees want for the future. The top industries with most potential to thrive in remote work. Nor is residential real estate immune from the impact of remote work. Thus, among health professionals overall, the effective remote work potential is just 11 percent. But if used to build supportive communities and promote well-being, tech and social media could be a part of the solution, too. 1: Remote work is bad for new hires and junior employees This one is not nearly as controversial as it sounds. McKinsey_Website_Accessibility@mckinsey.com. In 2012, the McKinsey Global Institute (MGI) estimated that knowledge workers spent about a fifth of their time, or one day each work week, searching for and gathering Employees without children under 18 are nearly three times as likely to prefer on-site work, but the majority still prefer more flexible models. McKinsey McKinsey & Company conducted an analysis on the prospects of remote work in the future, with the input of 2,000 tasks, 800 jobs, and nine countries. Anxiety at work. To determine the overall potential for remote work for jobs and sectors, we use the time spent on different activities within occupations. In this article, however, we aim to granularly define the activities and occupations that can be done from home to better understand the future staying power of remote work. In this regard, a special focus must be put in factors that hinder the process of remote work for employees. In 2012, the McKinsey Global Institute (MGI) estimated that knowledge workers spent about a fifth of their time, or one day each work week, searching for and gathering information. One impediment to productivity may be connectivity. A McKinsey Live event on Getting hybrid work right: What employees are saying, Whats next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries, Besides anxiety and burnout, longer-term productivity in a hybrid virtual model will also require addressing the organizational norms that help create a common culture, generate social cohesion, and build shared trust. At organizations that are communicating vaguely, or not at all, about the future of postpandemic work, nearly half of employees say its causing them concern or anxiety. Aaron De Smet is a senior partner in the New Jersey office. Microsoft Valuable as a detailed vision for postpandemic work might be to employees, 40 percent of them say theyve yet to hear about any vision from their organizations, and another 28 percent say that what theyve heard remains vague. Meanwhile in the US, retail pharmacy chain CVS plans to ramp up hiring to fill 50,000 positions and is looking to hire employees who were furloughed or laid off by some of its clients.2These companies are hiring thousands of new employees during the coronavirus pandemic, CNN Business, edition.cnn.com. Regarding the frequencyof splitting time between remote work and working at an office location,most employees want to work remotely at least three days a weekand indicate they will leave their companies if this need goes unmet. Your email address will not be published. Working from home sky-rocketed and by February 2020, around 200 million people across China were working remotely.4Spring Festival rework day: 200 million people work from home, China News, chinanews.com. Remote work will continue after the pandemic, primarily in hybrid forms. Others are contributing to the global effort to fight the virus either through donations or innovative solutions to help where they can. Our survey results make the source of anxiety clear: employees feel theyve yet to hear enough about their employers plans for post-COVID-19 working arrangements. 2 The to-do list can feel endless, and available resources are limited. Many of such jobs are low wage and more at risk from broad trends such as automation and digitization. A survey by consulting firm Eagle Hill found 47% of workers would consider looking for a new job if their employer reduced their remote or hybrid work flexibility. McKinsey To read the full McKinsey article, please click here. McKinsey WebFor the global economy, the loss of productivity because of poor mental healthincluding anxietymight be as high as $1 trillion per year. Economic potential of generative AI | McKinsey The future of work after COVID-19 | McKinsey - McKinsey Advanced economies have higher remote work potential. What Employees are Saying about the Future of Remote Work - McKinsey. The views expressed in this article are those of the author alone and not the World Economic Forum. 2 The industry has aligned on most of the Ninety-four percent of the users participating in our survey said digital solutions will be important to their automation efforts in the future. What Employees are Saying about the Future of Remote Work Remote work trends have been shaped by the pandemic, and they are expected to continue evolving in 2023. What parents say. How long before someone invents the virtual watercooler? McKinsey McKinsey Web12 The future of work in America: People and places, today and tomorrow, McKinsey Global Institute, July 2019, McKinsey.com. Remote work definitely brings technological capabilities that allow for a bigger pool of talent, however, what does this long term shift mean for different economic factors? Which working arrangements and related policies do employees say will lead to the highest levels of well-being, social cohesion, and productivity? Succession Planning Playlist | Multiple Resources, The Use of People Analytics in Human Resources: Current State and Best Practices Moving Forward Report | SHRM Research, 2023 Layoff Tracker of Organizations Announcing Job Cuts | Brian Heger, HR Operating Model Report 2023 | The Talent Strategy Group, 17 People Analytics Questions to Help Inform Aspects of Your Talent Strategy | Brian Heger, 4 ChatGPT Prompt Examples for HR | Brian Heger, 12 Resources for Chief Human Resources Officers | Brian Heger, 11 Talent Strategies Template | Brian Heger, Skills-Based Organization Playlist | Deloitte, First 100 Days: A Guide for New-to-Role Heads of HR | Gartner, Inclusive or Isolated? In 2017, our scenarios suggested that by 2030, up to 375 million workers (14 percent of the global workforce) would have to switch occupational categories. Valuable as a detailed vision for postpandemic work might be to employees, 40 percent of them say theyve yet to hear about. Your email address will not be published. But just 19 percent of respondents to the most recent survey said they expected employees to work three or more days remotely. As firms reassess their policies and work arrangements for a post-pandemic environment, this report outlines the sentiments of workers regarding the future of work and whether these needs match what their employers expect to provide.More than half of employees said they want more flexible, hybrid virtual-working modelssometimes on-premises and sometimes working remotely. Inaddition, many Chinese companies rapidly adopted local productivity solutionssuch as Alibabas DingTalk or WeChat Work. remote work McKinsey & Company analysis, Survey on Centered Leadership and Agile Work in Coronavirus Epidemic in China conducted on March 1218, 2020. Remote working will dramatically reshape urban economies, transport and consumer spending. Over the past few years, B2B sales organizations have been in a race to meet altered buyer preferences in a challenging labor environmentpivoting reps from the field to at-home offices, enabling remote interactions, and finding out how to create customer intimacy in virtual settings. Some of their jobs require collaborating with others or using specialized machinery; other jobs, such as conducting CT scans, must be done on location; and some, such as making deliveries, are performed while out and about.
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