Recession Archives

Goodbye hybrid work: 5 signs 2023 is the year of return to office

January 20, 2023

Before the COVID-19 pandemic, only 8% of employees worked exclusively remote, but that jumped to 39% by early 2022, according to a survey from Gallup. But the days of rolling out of bed and making yourself presentable from the waist up could be coming to an end this year. Yes, it might be time to put on real pants. Straight Arrow News has the signs that 2023 is the year of “return to office” in this week’s Five For Friday.

#5: COVID-19-related factors

COVID-19-related social distancing and lockdown measures were the catalyst for the widespread adoption of working from home. Companies were itching to get employees back in the office by the start of 2022, but surges in cases due to the delta and omicron variants upended those plans. Cases have leveled off for the most part, according to CDC data, making it more likely that no virus will stand in the way of a return to office.

#4: Some workers want to return

More than half of remote-capable workers prefer a hybrid work environment, nearly double those who prefer being fully remote, according to Gallup. But when it comes to returning to the office everyday, only 6% are willing to give up all that flexibility. With business leaders overwhelmingly believing in the benefit of in-person work, the opinion of the 6% may get more weight than the rest.

#3: Commercial real estate

Business is all about the bottom line and office space can be really expensive. The technology hub of San Francisco is a perfect example. Office space in the Bay Area averages $75.86 per square foot. That’s nearly twice the national average of $38.19 per square foot. Wasting all that money on a premium location isn’t sitting well with shareholders and those in the C-suite. Kastle has been tracking a steady increase in employees returning to the office over the last year, a sign of what is to come.

#2: Follow the big guys

Business leaders believe workers are more productive in the office. In fact, 96% say there are more benefits to in-person work, according to a survey from Resume Builder. But there’s a big disconnect between leadership and employees, the latter claiming to be 29% more productive with a flexible work environment. Major firms like Apple, Disney and Starbucks have already mandated return to office in some capacity, so smaller companies will likely follow suit.

#1: The job market

Workers experienced a brief moment of power following the pandemic shock. The U.S. hit a record 11.5 million job openings in March of 2022, which made employees a sought-after commodity. Employers fought to attract good talent by offering higher wages and perks like flexible working conditions. But pay increases are slowing and concerns of a global recession could tip the scales back in the favor of the boss. They’re already flexing that muscle, with 21% saying they are willing to fire employees who refuse to return to office, according to Resume Builder.
Gas prices rising as energy secretary sends warning about oil bill

January 18, 2023

According to an exclusive report from Reuters, Energy Secretary Jennifer Granholm wrote a letter to a House committee warning about the effects an oil bill could have on gas prices if passed. The Strategic Production Response Act, introduced earlier this month by Rep. Cathy McMorris Rodgers, R-Wash., would limit presidential authority in releasing oil from the Strategic Petroleum Reserve (SPR), except in the case of a severe energy supply interruption.

“This bill would significantly weaken this critical energy security tool, resulting in more oil supply shortages in times of crisis and higher gasoline prices for Americans,” Granholm said in the letter to the House Energy and Commerce Committee. Rep. McMorris Rodgers became the chair of the committee after Republicans took control of the House.

President Joe Biden tapped in to the reserve multiple times last year to manage rising gasoline prices and supply disruptions caused by Russia’s invasion of Ukraine. The Biden administration faced bipartisan concern after the SPR shrunk to about 380 million barrels, its lowest level since 1984.

In her letter on the oil bill, Granholm cited estimates from the Treasury Department saying the administration’s use of the SPR cut gas prices by as much as 40 cents per gallon. The White House has criticized the bill, calling it “backwards” and an attempt by House Republicans to help oil companies make more profits.

Reporting of the oil bill letter came a day after AAA reported gas prices had risen by five cents since last week, to a national average of $3.32. The rise comes despite the fact “the short days and messy weather of January are combining to keep people off the roads, lowering gasoline demand,” according to AAA.

“Gasoline demand is usually lackluster this time of year, and it likely won’t start to tick up until spring break draws near,” AAA spokesperson Andrew Gross said. “So the primary factor in this latest increase is the higher cost of oil, which accounts for more than half of what you pay at the pump.”

According to AAA, “the price of oil rose as fears of a global economic recession eased.”
Major CEOs predict a recession amid steady inflation, stagnant global trade

October 5, 2022

Polls have pointed to inflation and the economy as top concerns for voters heading into midterms. Now, those concerns are being shared with major CEOs of U.S. companies. A survey showed the world’s richest are preparing for a recession. A survey of 400 CEOs shows a staggering 91% believe a recession is bound to happen within the next 12 months.

The survey also found that only 34% of these CEOs think the recession will be mild and short. As companies predict a recession, they are looking for ways to prepare and cut costs. The survey results noted that more than half of the CEOs are considering workforce reductions to deal with a recession.

As the U.S. grapples with recession predictions amid high interest rates and high energy costs, the global outlook is in a similar position. The U.S. has slowed down on global trade. Exports in goods and services fell 0.3%, the first decline since January, the Commerce Department said Tuesday. Imports were down 1.1%, continuing a downturn that started in June. With imports and exports down, a sharp slowdown in trade is projected for 2023. The World Trade Organization also lowered its forecast for global economic growth in 2023 to 2.3% from 3.3% and warned of an even sharper slowdown should central banks raise interest rates too sharply.

“The global economy faces a multipronged crisis,” Ngozi Okonjo-Iweala, secretary-general of the WTO, told the Wall Street Journal. “The picture for 2023 has darkened considerably.”

Goodbye hybrid work: 5 signs 2023 is the year of return to office

Gas prices rising as energy secretary sends warning about oil bill

Major CEOs predict a recession amid steady inflation, stagnant global trade

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