Let’s revisit remote work, and these two first surveys will tell you why I couldn’t resist the catnip.
A recent Goldman Sachs report supports the claim that remote work is not the cause of declining productivity growth. The report points out that productivity growth has either stalled or dropped over the past five years, which is attributed to the natural tendency of trend productivity growth to fall over time. The concept of “total factor productivity” is also discussed, which describes the growth a company or nation can achieve without adding to its labor force or capital. While adopting generative AI could potentially offset the growth slowdown, it is still considered premature. Overall, the report suggests that the sputtering productivity growth rate is more like business as usual and not solely caused by remote work or other modern trends.
But even better, a survey by Boston Consulting Group found that companies allowing work from home have experienced four times faster revenue growth compared to those strict about office attendance. Companies fully flexible in remote work showed a 21% increase in sales between 2020 and 2022, while companies with hybrid or onsite setups only saw a 5% revenue growth. This suggests that embracing remote work may provide a competitive advantage.
With those two data points, I couldn’t resist this one, too.
According to a Glassdoor report, by early 2024, there will likely be more Gen Zers working full-time than baby boomers. Gen Zers have different priorities and values, such as transparency and diversity, compared to older generations. Millennials will still be the largest group of full-time workers for several years. Gen Xers are preparing for retirement. Companies may need to adjust their culture and benefits to attract and retain Gen Z talent.
Why do we care?
This might be a critical moment for choices about how companies operate. The productivity decline isn’t a remote work problem, and in fact, remote work offers more than just employee satisfaction; it could be a strategic advantage in the competitive business world. I remain in the business of finding competitive advantages, and will leave remote work firmly in that column.
At the same time, there’s a generational shift in the workforce. This isn’t just about accommodating a new generation; it’s a strategic move to ensure companies remain attractive and competitive in the talent market. And let me observe… maybe you can learn something from this younger generation who was educated based on the insights of those previous generations. Their parents taught them this.
The IT service industry, in particular, should take note of these trends, as they directly impact talent acquisition, productivity, and ultimately, business growth.