"On the surface, the job market looks as strong as ever. Beneath the surface, workers are getting a very different message: Their bosses are back in command.
Big companies are tightening remote-work policies, shrinking travel budgets and cutting back on benefits.
On Friday, JPMorgan Chase told employees that most hybrid workers would have to come back to the office five days a week starting in March. Amazon.com ordered employees back to the office full time starting this month, and Dell Technologies did the same for its sales team last fall.
Companies are slashing perks such as college-tuition assistance and time off for a sick pet.
The moves show how the balance of power between employers and employees has shifted as the labor market has gone from white-hot to merely solid.
From 2020 to 2022, pandemic labor shortages pushed wages up sharply, and those who left one job could easily find another. The rate at which workers quit surged, and unemployment fell in early 2023 to 3.4%, the lowest in more than 50 years.
Unemployment has since risen to 4.1% in December. Meanwhile, the ratio of vacant jobs to jobless workers has fallen from a record of 2 in 2022 to 1.1 in November.
The job market is still, by any metric, healthy. Indeed, vacancies have risen since September. Jobs grew by a surprisingly strong 256,000 in December from November and gains averaged 186,000 a month in 2024.
But 76% of the job growth in the past year has been in healthcare and education, leisure and hospitality, and government.
In fields such as finance, information, and professional and business services, job growth has been far weaker.
While a shift in leverage to employers might have shown up in layoffs or wage cuts in the past, now it is more subtle, often in changes to working conditions. For example, knowing that some workers will quit rather than return to the office, some companies are ending remote work as a way of trimming payroll.
"Quiet quitting" -- workers who slacked off rather than quit -- has been replaced by "quiet cutting" -- employers who cut jobs without actually announcing job cuts.
Michael Gibbs, a professor of economics at the University of Chicago's Booth School of Business, said the new mandates might simply be a message to workers that times have changed. "Firms are trying to reset expectations," he said.
Mayrian Sanz said she quit as an operations director at a tech company in October after her boss told employees to come back to the office four days a week. The 33-year-old, who had worked remotely, said commuting from her home in New Jersey to the firm's New York office would have added several hours to her workday and forced her to pay for child care for her two children and for a walker for her dog.
"It impacts the whole family," she said.
Sanz, who now works as an independent business and leadership coach, said she applied for 25 to 30 jobs listed as remote but initially got no responses. When some hiring managers finally replied, they had a surprise: Jobs listed as remote would now be in-office. "They just say everything is shifting to going back to the office," she said.
Among tech workers, the share receiving perks such as paid volunteer hours, college-tuition reimbursement, free financial advice and mental-health programs all declined by about 4 percentage points in 2024 from 2023, according to Dice, a technology job board.
Average bonuses fell by more than $800, from $15,011 to $14,194. Meanwhile, Netflix has quietly backed off from its unlimited parental leave in a child's first year, The Wall Street Journal reported last month. A company spokesman said at that time that employees have the freedom and flexibility to determine what is best for them.
John Frehse, who runs the workforce practice at consulting firm Ankura, said employers' message was, "We'll reintroduce time off for a sick pet in four years when the economy changes again. But for now, you shouldn't get time off to care for a sick poodle."
Corpay, which helps businesses manage non-payroll expenses and has about 4,200 U.S. employees, has been re-evaluating its hybrid and remote-work policies, which expanded during Covid and included allowing people to work from anywhere as long as taxes could be collected accurately and employees were productive.
"We're saying, let's pull back on that a little bit," said Crystal Williams, chief human resources officer at the Atlanta-based company.
Starting with its Atlanta headquarters, Corpay is letting employees know that if they live near an office, they will be expected there at least three days a week. In addition, "we're really not going to do the work-from-anywhere scenario unless a person has a very specialized skill set and they really can't move," she said.
Williams said the shift partly reflected Corpay's better position in the labor market, as employees stay in their jobs longer and the company attracts more qualified applicants. The share of employees lost to attrition -- quits, dismissals, retirements -- in the U.S. was down by 12 percentage points in 2024 from 2023, and more top recruitment candidates accept job offers, Williams said.
The actual impact of return-to-office directives remains to be seen. Bosses hope to make their companies more productive, which, across the economy, makes faster growth possible without pushing up prices. But some economists are skeptical. Many workers now being called in were already spending some time in their cubicles.
Nicholas Bloom, a professor of economics at Stanford University, said most of the benefits of collaboration can be achieved with just a few days in the office, while some tasks that require concentration are better done at home.
That helps explain why hybrid-work rules like Corpay's are far more common than more stringent five-day mandates. The number of big companies announcing five-day mandates is still small and some have yet to take effect. The share of companies requiring five days a week in the office is little changed since last spring and down significantly from 2023, according to research company Flex Index. Meanwhile, the share of job listings that are hybrid rose slightly over the past year, LinkedIn data show.
While the power shift is evident across most of the labor market, it is more evident in white-collar roles. Mark Gazdik was let go from an account-management job with a major cruise line in August. After applying for a few jobs and with his savings running low, Gazdik, age 57, was accepted into a trainee program to be a flight attendant, a job he held three decades ago, at less than half his prior salary.
"I was nervous about looking like I was throwing in the towel on a white-collar career where I could make a $200,000 salary," he said. "But there's a comfort and safety in this job, and it's so nice to feel wanted again."" [1]
1. Balance of Power Shifts Back to Bosses. Putzier, Konrad; Weber, Lauren. Wall Street Journal, Eastern edition; New York, N.Y.. 15 Jan 2025: A1.
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