Everyone back to the office? Not quite – what's happening in the UK workforce

Many are expecting shifts in the labour market and employer-employee relationships as UK job vacancies have consistently fallen since mid-2022 and unemployment has risen to its highest level in two years. Though average wages have risen above the level of inflation for the first time since late 2021, a sluggish economy – with falling employment, rising unemployment and Bank of England worries about a wage-price spiral – means some analysts suggest that pay offers in the private sector are likely to become less generous.?

At the same time, there have been a number of high-profile stories of employers pushing for return to office mandates – from Google's attendance tracking and Amazon's toughening stance , to virtual giants Zoom and Roblox calling staff back. Last month, many firms in the City, including HSBC and Lloyds, began to insist employees must be in the office two or three days a week, and in some cases faced opposition from staff.

A recent survey of global CEOs by KPMG showed that 64% expect staff to be back in the office full-time within three years, and 87% said they would give those in the office pay rises and favourable assignments over those staying remote. However, those expectations may clash with reality – several other surveys, including LinkedIn research , have shown that many workers say they would consider quitting if they had to go back full-time.?

"Organisations need to recognise that employees are not the same people they were pre-pandemic. Although employee roles and skills may not have changed much, mindsets, behaviours and expectations certainly have, and that means a new corporate culture will emerge," writes business psychologist Martina Doherty . And, at least in the UK, LinkedIn data on job adverts shows that hybrid roles have continued to rise, even in the post-pandemic period.

Is hybrid work here to stay?

Among job postings in the UK, hybrid work has become increasingly common, with a little under half (45.1%) of job ads in August listed as hybrid. That figure was up more than a third compared to August 2022, and slightly up month on month. The UK also had the highest proportion of hybrid job ads this August among eight European countries we analysed (followed in order by Ireland, Sweden, the Netherlands, Switzerland, Germany and Austria, where less than a third of roles are hybrid).

Compared to those countries, the UK is also somewhat of an outlier when it comes to fully remote roles: in August, more than 10% of job postings were classed as such in the UK, compared to 8.5% in Ireland and just over 3% in the Netherlands. However, the UK has seen a drop off in the share of fully remote roles on LinkedIn. While hybrid roles saw a rise, the share of remote roles advertised on LinkedIn in the UK fell by 12.4% between August 2022 and August 2023.

What people want from work

Over the past few years, many surveys have shown that people generally have positive things to say about working remotely for at least some of their work week.

Top Voice John Amaechi OBE makes the case that the office is only a benefit if it's providing something useful: "People want to come into the office because there is a compelling reason. Something that you are going to do there, even if it perhaps can’t only be done there, can be done there with other colleagues in such a way that is so dramatically better than doing it separately. Nobody wants to come into the office for free bananas and coffee [or] so their boss can watch them work."

Many members have also highlighted the diversity and inclusion impact of forcing people back to the office, particularly on working parents, carers and people with disabilities. Member Catherine Buls (Assoc CIPD) shared the pros she sees in hybrid working for people returning from maternity leave, while others have emphasised the benefits for introverts too.

There's also a cost aspect – the sting of commuting costs is particularly noticeable in a period of high inflation. However, costs are also where people do see potential benefits to the office. Research for office architects MoreySmith found 58% of employees would return to the office if benefits like food and gym memberships were worth more than the commute. "People have reclaimed the time, money and energy costs of commuting, and are instead investing in their own happiness," says workplace experience specialist Richard Jeffries . "They can work effectively from home and will not give up this privilege easily."

When it comes to what people are applying for, LinkedIn data shows remote job applications still slightly outstrip supply – 17% of applications are for remote roles, while 10% of the roles available are remote. However, the share of applications has fallen by almost a fifth between 2022 and 2023, while applications for hybrid roles have significantly increased. In August 2023, over 49% of applications were for hybrid roles, up almost 19% year on year as people apply for the roles available.

The job market is becoming more competitive

Alongside this growth in hybrid roles, we've seen the labour market get increasingly competitive as the UK economy remains sluggish.

LinkedIn's data shows that in August, there were just over six active applicants per job, while in July there were just under four applicants per job. The slackening of the labour market is also evident in the LinkedIn Hiring Rate (LHR) – the number of hires divided by the total number of LinkedIn members in the UK. In September, the LHR was down 18.8% year on year, compared to a smaller fall of 6% between September 2021 and 2022.

But, while people of course apply for the roles available, the fact that hybrid roles have increased, even in times of sluggish economic growth and an increasingly competitive labour market, suggests many employers have seen the benefits of flexibility. Jack Parsons , CEO of Youth Group , is one of them : "In my view, the landscape has evolved, and expecting employees to be in the office every day no longer fosters maximum creativity. Embracing a hybrid and flexible approach is now what most workers thrive on."

Methodology

Economic Graph data: Labour market tightness is calculated from the stock of "active" job openings divided by the number of active applicants. Active Job Openings is equal to the stock of paid job openings multiplied by a recruiting intensity index. A remote job refers to jobs that can be done completely out of the office and is defined as either the job poster explicitly labelled it as "remote" or if the job contained keywords like "work from home" in the listing. A hybrid job refers to jobs that are done both in the office and out of the office and is defined as being explicitly labelled as "hybrid" by the job poster. The share of hybrid and remote jobs is calculated in proportion to all paid job postings.

Reported by Siobhan Morrin , managing news editor at LinkedIn News UK . Economic Graph data research by Rosie Hood, PhD .