Navigating the Shift: Why Companies in Singapore are Moving Away from WFH and Its Impact on HR Functions
Nov 24, 2024
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Singapore is witnessing a significant transformation in its workplace dynamics as companies increasingly move away from Work From Home (WFH) arrangements. While the pandemic accelerated remote work adoption, post-pandemic realities are driving businesses to re-evaluate its effectiveness. Internationally, big tech firms such as Amazon have scraped WFH arrangements and mandated all employees to return to the office. This follows tightened WFH arrangements by notable companies such as Disney, JPMorgan, and Tesla. Closer to home, Grab announced in October that all employees must return to the office or face disciplinary actions.
This strategic shift reshapes Human Resources (HR) functions, affecting employee retention, talent acquisition, and morale. Here's a deep dive into why companies are making this move, what challenges HR professionals face, and how they can adapt to stay competitive in this evolving work environment.
Why Are Companies Moving Away From WFH?
1. Productivity and Collaboration Concerns
For many business leaders, the office remains vital to fostering collaboration, community, and creativity—elements they find challenging to replicate in remote settings. According to the KPMG CEO Outlook 2024, 83% of global CEOs expect a complete return to pre-pandemic office setups within three years. Locally, companies like Lendela have observed improved employee satisfaction and productivity upon returning to the office. These trends reinforce the belief that physical workplaces are indispensable for driving organizational efficiency.
2. Economic Justifications
Singapore's high real estate costs add another layer of complexity. Businesses must fully utilize premium office spaces, making it harder to justify extensive remote work arrangements. A recent Ministry of Manpower (MOM) survey revealed that teleworking arrangements fell from 56.5% in 2021 to 31.9% in 2022. This decline underscores a broader move away from WFH as businesses aim to maximize cost efficiency while maintaining operational effectiveness.
3. A cover for Headcount streamlining
In late 2023, statistics from Randstad, a human resource solutions company, reveal that more than half of the employees will leave their jobs should they be required to work in the office more frequently. There may be instances where the company employs WFH tighten measures as a cover to streamline headcounts. An eerie coincidence is that companies calling back their employees to the office, such as Grab, Disney, and Amazon, are also those in the process of retrenchment exercises. Considering that job loyalty has diluted in the recent generation, there is no doubt that these companies are losing their best talents. This supposedly dangerous streamlining technique may eventually backfire and jeopardise the company.
The HR Perspective: Challenges and Opportunities
HR departments face critical challenges in managing this transition while leveraging new opportunities for strategic growth.
Employee Retention
Flexibility remains a top priority for employees. A study by EY revealed that 45% of workers plan to switch jobs within a year if workplace flexibility is removed. While some companies like Lendela report strong retention despite their return-to-office policies, other businesses risk losing talent if they fail to address employees' desires for work-life balance.
Talent Acquisition
The disconnect between employer expectations and job seeker preferences is creating hiring challenges. As of May 2023, only 6.6% of job postings in Singapore offered remote work options—much lower than the demand. This mismatch could hinder organizations from attracting high-caliber candidates, particularly as flexibility becomes a key criterion for job seekers.
Employee Morale
Returning to office work has its pros and cons. On one hand, it can reduce home distractions and improve focus, especially for caregivers. Conversely, losing autonomy and flexibility may negatively impact employees' work-life balance and morale. HR teams must carefully navigate these psychological implications to support a thriving workforce.
Hybrid Work Models: The Middle Ground
To reconcile business goals with employee expectations, many companies are turning to hybrid work models, which balance the benefits of in-office collaboration with the flexibility of remote work. It would seem logical for companies with existing hybrid work models to maintain the status quo. Observing the long-run norm regarding the ratio of onsite workdays to WFH days per week will be interesting.
The Benefits of the Hybrid Model
Rental Cost: Cost savings from reduced office space is one of the critical considerations for companies practicing hybrid work models. With most offices located in prime locations, lease area, and cost can be reduced mainly due to hybrid work models. Moreover, companies like JustCo and WeWorkare leading this space with innovative solutions such as the JustCo SuperPass and WeWork On-Demand, which allow businesses to adopt flexible office strategies. These arrangements enable companies to accommodate employee preferences while optimizing productivity and resource utilization.
Human Resource: Adopting a hybrid model seems to improve multiple sub-functions of the larger Human Resource function. Employee attraction, retention, and morale are some areas that will be impacted, considering the general desire for a Hybrid work model.
Efficiency: A hybrid work model seems to yield the greatest efficiency for some companies. Days in the office are much catered to meetings, discussions, and interaction with colleagues. This primarily aids in building a shared corporate culture and team cohesion. On days when employees work from home, an environment that requires less interaction and disruption may improve work quality for tasks requiring focus and longer attention.
Staying Ahead: How Companies Can Adapt
Adapting to this new work environment requires forward-thinking strategies aligning with government regulations and workforce expectations. Here's how companies in Singapore can stay competitive:
1. Update HR Policies
With MOM's new December 2024 tripartite guidelines, employers must justify rejecting requests for flexible work arrangements on valid business grounds. Early policy adjustments ensure compliance and strengthen employee trust and satisfaction.
2. Invest in Technology
Adopt tools that facilitate seamless collaboration in hybrid settings. Unified communication platforms, project management tools, and cloud-based systems can help optimize productivity and maintain team cohesion.
3. Seek Expert Guidance
The complexities of this shift—from Good industry practices to HR compliance—necessitate professional expertise. Partnering with firms like OakTree Accounting & Corporate Solutions Pte Ltd can help businesses develop smarter, more efficient workplace strategies tailored to their unique needs.
Conclusion: Transforming Singapore's Workplace Landscape
The migration away from WFH marks a turning point for businesses in Singapore. While the shift introduces challenges like reduced retention and morale, it also presents opportunities to innovate through hybrid work models and flexible arrangements. Companies that proactively adapt with updated HR policies, technological investments, and professional guidance can stay ahead in this competitive landscape.
OakTree Accounting & Corporate Solutions Pte Ltd offers tailored support for those looking to navigate these complexities effectively. From compliance to strategic HR planning, we're here to future-proof your workplace strategies for long-term success. Contact us today to stay ahead of the curve.
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DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily represent the views and opinions of any individuals or organizations with which the author may be affiliated, either in a professional or personal capacity, unless explicitly stated.
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