Adoption of remote work continues to skyrocket, even as a record number of Americans continue to leave their jobs. But as the pandemic shifts and changes, will these trends remain? In this segment of Backstage Pass, recorded on Dec. 22, Fool contributor Rachel Warren discusses the complex answer to this key question.
Rachel Warren: I think for me one of the biggest stories of the year, and this is more of a broader trend that I think has impacted so many different companies in so many ways, it's the great resignation in the rise of remote work. I saw this really interesting article by Fortune entitled, "What Comes After The Great Resignation?".
A few of the challenges it cited that employers would be facing in the new year included ongoing hiring issues and a costlier talent pool. Workers have a lot of leverage and many of them as they well should are pushing for higher benefits and more fair and equitable pay. But what's interesting is this trend, "The Great Resignation," it's been really positive for some companies and it's been really difficult for others.
For example, you think of ongoing supply chain issues which has been worsened by labor shortages. Well, that's had a negative impact on companies as big as Amazon (AMZN +0.97%). You look at its recent quarter, it had a difficult time because of those supply chain issues, but you can bet that some of that goes back to also perhaps not having enough workers.
There was a survey that was out earlier this year talking about how two-thirds of companies around the world are having trouble hiring workers. Everyone from small local businesses to large companies, maybe where there has been issues over the years with equitable pay for workers, they are now seeing in many cases inability to retain or hire the talent that they need.
On the flip side, you see companies like Target (TGT +0.83%), that we were talking about earlier, there was an article out, I believe last month saying if they've done a really good job of being able to retain talent and attract new workers for the holidays because of different incentives they've put in place.
What are some of the companies that these remote working trends, "The Great Resignation" can help? When you think of companies that maybe have remote-friendly work policies or companies that provide the tools that are necessary to help remote workers succeed, so you think of ones like Etsy (ETSY +4.12%), Shopify (SHOP +1.90%), a couple of obvious ones are Upwork (UPWK +3.10%) and Fiverr (FVRR +7.17%). I think for me, looking at this rise of remote work, looking at "The Great Resignation" from a personal standpoint, I love the fact that more people are taking stock of their day-to-day life.
The pandemic, I think has had its impact on people in so many different ways, made us take a step back and say, I don't think this is the way that I want to work. I want to maybe have this option to have more flexibility in the way that I work, and I think that's a lot of what we're seeing in these numbers.
As I believe Connor noted on our show last week, those monthly job report numbers we've been seeing where quits are still at record highs, I don't believe they include workers from the gig economy.
We could be seeing a lot of those workers are actually transitioning to freelancing contract work. There were a couple of really interesting studies I wanted to touch upon real quick here, on this theme of companies that are helping remote workers succeed, so you think of Upwork as an example. One of the things I like is Upwork every year, it releases a variety of studies about what's happening in the world of remote work.
The company recently released its annual Freelance Forward report, and the study found that "59 million Americans are freelancing amid a turbulent labor market". According to Upwork's study, "freelancers contributed $1.3 trillion to the U.S. economy in annual earnings", which was up $100 million from 2020, and what also aligned very much with those trends we're seeing in workers in some cases just disappearing from the U.S. workforce. What was interesting was the report also noted that "skilled remote freelancing continues to grow in 2021. 53% of all freelancers provided skilled services such as computer programming, marketing, IT, and business consulting".
"Flexibility and freedom are key motivators for new and existing freelancers." According to this report, "56% of non-freelancers say they are likely to freelance in the future", "78% of skilled remote freelancers cite 'schedule flexibility' as a key reason for freelancing", and "68% of new freelancers say that 'Career Ownership' is a top draw" and that the ability to work remotely is also a key factor behind that transition.
Another thing that was interesting in another study that was released by Upwork, I believe back in September, there was a quote in there from Upwork's Chief Economist saying "Remote work has become what economists call a general-purpose technology, and is a wide range of uses that has embraced across the economy and creates a variety of spillover effects."
"Remote work projections are strong" according to this report, "27.7% of American workers or 40.7 million Americans will be fully remote in the next five years". That just blew my mind, essentially, this report expects a quarter of working-age Americans to be remote in the next five years.
Very interesting trends to consider, I definitely don't think "The Great Resignation" is going anywhere, I think we're going to continue to see a changing labor force as people are seizing upon opportunities to change how, when, and where they work.
