Littler, the world’s largest employment and labour law practice representing management, has released its fifth annual European Employer Survey Report. Completed by nearly 700 human resources executives, in-house lawyers and business leaders based mainly across Western and Southern Europe, the survey provides insight into the key issues facing employers amid a historic period of workplace transformation.
Balancing Remote and In-Person Work
The evolving world of work creates a host of novel issues for European employers – among the most pressing of which may be determining how far they can go in requiring in-person work. This year’s survey finds employers pulled in different directions as their desire to increase in-person work may conflict with the flexibility needed to attract and retain talent.
When asked about current requirements for employee work schedules, 30% said employees are working fully in person and 27% said employees are on hybrid schedules, with more days in person than remote. That’s compared with only 11% who said employees are on hybrid schedules working more days remotely than in person, and just 5% who said their employees are working fully remotely.
The trend toward more in-person work may deepen in the coming months, as 73% of employers who are not already requiring fully in-person work said they are considering reducing remote work options. Those who do may encounter roadblocks from employees who are reluctant to relinquish flexibility. While this year’s survey saw greater alignment between employer policies and employee preferences – in Littler’s 2021 European Employer Survey, just 28% of respondents said their work models match employee preferences, compared to 40% this year – 42% still believe that their employees prefer hybrid or remote work to a greater extent than they offer it.
“It’s encouraging that employers and employees are more aligned on work preferences than they were at this time last year,” said Jan-Ove Becker, Littler shareholder in Germany. “However, the fact that companies are still struggling to balance the pros and cons of remote, hybrid and in-person work models – even two and a half years into this new world of work – is telling of the complex and delicate challenges that come with managing a workforce today.”
Concerns With Remote Work Remain
As employers walk a fine line between pushing for in-person work and providing flexibility, they will have to weigh the benefits of offering remote work options – which 79% are looking to increase to help attract and retain talent – with those of in-person work. Employers’ key reasons for requiring more in-person work centre around culture and teamwork – including facilitating collaboration and creative thinking (54%) and improving employee engagement (48%) – rather than on productivity and hard costs. Those perceived benefits of in-person work correlate with the main drawback employers see with managing hybrid or remote work arrangements: maintaining company culture and employee engagement (53%).
“It’s clear that those who got a taste of remote work are reluctant to give it up,” said Stephan Swinkels, Littler’s coordinating partner international. “This means employers must factor flexibility into their recruitment and retention strategies, and that if they’re going to push for more in-person work, they must do so with intention. For companies that want to facilitate greater collaboration, we can’t assume that just because people are in the office that will be the case – employers need to create those opportunities.”
No matter the work model, a focus on supporting employee mental health and well-being remains important. While 9 in 10 respondents have placed more focus on such initiatives over the past year, only 28% have done so to a large extent. In addition, when it comes to combatting burnout, offering more flexible work schedules was the only step taken by more than half of respondents (54%), and more actionable steps – such as working individually with employees to manage workloads – were selected by less than a third of respondents.
“Addressing workplace mental health and burnout in sustainable ways continues to be a challenge for employers,” said Anne-Valérie Michaux, Littler shareholder in Belgium. “Flexible work schedules, for example, are a step in the right direction, but they often don’t account for the added stress and workloads that can accompany remote work.”
Wandering Workers on the Rise
“Wandering workers” – employees who work in a different country from where their employer is located – continue to complicate remote work policies for employers. Among those who have employees working with this arrangement, the vast majority (89%) are concerned with the legal risks, tax implications and other employment issues that come along with it. Moreover, this issue seems to be growing, as 73% of respondents to this year’s survey said they have wandering workers, compared to 61% in 2021.
“Employers are rightly concerned about the myriad risks that come with wandering workers, and these risks are particularly heightened for UK-based companies following Brexit,” said Raoul Parekh, Littler partner in the UK. “Unfortunately, employee expectations in this area are not aligned with the realities of the global legal system, as it is genuinely challenging for employers to make ‘work from anywhere’ a reality.”
AI Tools Gain Traction in a Tight Labour Market
Nearly half of respondents (47%) are currently using or planning to use technology solutions and/or AI tools to support recruiting and hiring efforts. What’s more, 61% of those who are already using such tools said they increased their use in the past year, underscoring the utility of AI and technology in today’s talent landscape.
“In a tight labour market, business leaders are slowly but surely increasing their use of AI solutions in hiring and recruiting – and seeing how useful they can be,” said Laura Jousselin, Littler partner in France. “As usage of these tools ramps up, it’s important for legal departments to raise awareness of the compliance steps that must be taken and ensure applications are developed under legal review.”
With regard to the steps taken by employers, while more than half (54%) of those using AI/technology solutions in recruiting and hiring said they have developed a plan that identifies specific goals and tests outcomes, less than a third have conducted an assessment to ensure data privacy compliance (31%) or coordinated with vendors to conduct reviews of AI algorithms and identify potential biases (28%).
Macroeconomic Concerns Emerge
Amid rising economic uncertainty, the survey found signs of caution emerging among European employers, though they do not appear to be taking drastic steps en masse at this time. Roughly a quarter (27%) said that macroeconomic concerns have made them hesitant to hire new employees, while 37% are now either considering or implementing workforce reductions.
The survey report – which was released at Littler’s European Executive Employer Conference, held from October 18-19 in Dublin – covers a range of additional legal and HR matters impacting European companies, including efforts to address pay equality, the skills gap and compliance with cross-border data privacy rules. It also breaks out country-specific analyses for Germany, France, Spain, Italy and the United Kingdom.
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