The red-hot labor market seems to be cooling off. The imperfect storm of unprecedented inflation, market volatility and a looming recession are causing employers to rethink their human capital strategies to get ahead of the curve.
That said, do not expect to see all those "Help Wanted" signs coming down everywhere. After all, the unemployment rates in the U.S. and Europe are still near historic lows despite broader economic concerns. One constant we have seen throughout the COVID-19 pandemic and the current economic slowdown is that remote working continues to be a key part of companies' human capital strategy.
The pandemic showed many employers that their employees can be just as productive working from home. This resulted in some companies making remote work a permanent option. Other companies have taken the opposite position and publicly stated they want their employees back in the office as soon as it is safe to do so.
If the economic downturn continues, and companies start looking for ways to trim costs beyond headcount reductions, we expect some of those companies that are already permitting remote working to eliminate in-office work altogether, thereby eliminating their real estate costs. Though this may seem like something employees would be largely receptive to, employers must still make sure they understand what their legal obligations are if they want to mandate remote working, and plan accordingly.
Employees may have a contractual entitlement to work from an...
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