What’s Next for America’s Workforce Post-COVID-19?

Apr 12, 2021

PwC’s Workforce Pulse Survey findings for March 24, 2021

After a year of change, employee priorities are shifting on location, benefits, and skills.

As business leaders charge ahead with post-COVID-19 work plans, they’re relying on an energized, motivated, and skilled workforce to help them achieve their growth agenda. The challenge? Many employees simply aren’t mentally or physically ready to hit the ground running.

22% of US workers are considering or planning a move away from their office location

Part of this is due to burnout as the lines between work and home have all but dissolved during the pandemic. Others can’t give work their full attention until schools fully reopen or there’s less risk of contracting the virus. But perhaps most significantly, the past year has prompted many employees to reconsider their values or make major changes in their personal lives, which is changing how they work and what they need to be productive. Our Workforce Pulse survey of 1,515 US employees found that:

  • Employees are on the move, with almost a quarter considering or planning to move more than 50 miles away from a core office location. That’s on top of the 12% who have already made such a move since the start of the pandemic.
  • Employees deeply value extra paid time off, including dedicated time to upskill or volunteer, as so important they’d give up part of their future earnings to get it.
  • The skills employees are most focused on building are clearly influenced by the lessons learned from the pandemic, including adaptability and the ability to learn and apply new skills quickly.

These shifts are happening against a backdrop of nearly 3 million women dropping out of the workforce during the past year and the number of long-term unemployed people (those who have been unemployed for six months or more) is at its highest level in 60 years. 

To return to growth, business leaders will need to understand what employees really want and create policies and plans that allow for more flexibility and personalization. They’ll also need to continue expanding mental health support and develop pathways that make it possible for women to come back into the workforce.

Relocation is on the upswing - for those with flexibility and mobility
US workers on the move bar graph

The rise of remote work is spurring a nomadic trend among employees. Twenty-two percent of employees told us they’re considering or planning to move more than 50 miles away from a core office location, either permanently or temporarily. In addition, 12% have already made such a move since the start of the pandemic.

Those who have flexibility and mobility are more likely to have relocation on their minds. Sixteen percent of remote workers, for example, are considering or planning a permanent move 50 miles away from their current office. In comparison, just 8% of essential workers — those who are more likely to be working on-site — say the same. In addition, 40% of employees who have been laid off or furloughed are planning or considering a move, a possible indication that they’re willing to relocate to find work.

What’s driving this trend? One likely factor is economics. Given the high rate of unemployment and the number of women who have had to drop out of the workforce, many families are seeking more affordable living on one income. The spike in suburban and rural home sales may indicate that some people see less-populated areas as safer. And lower state tax rates or states with a lower cost of living may be appealing. Tennessee, Texas, and Florida, for example, are all seeing rising numbers of new residents.

Key takeaways

These findings point to a wave of self-reflection where sociology meets workforce and lifestyle preferences.

  • Employers appear to be adapting to this new demand for flexibility, with most telling us they have invested or will invest in new tools and tools training to support virtual work going forward, according to our March US Pulse Survey of executives.

  • About half also report planning or implementing additional options for remote work such as hybrid work schedules or permanent remote work for roles that support it.

Earlier this year, a majority of US workers (56%) surveyed by the US Gallup Poll said they worked remotely all or part of the time due to COVID-19. Even though some business leaders have said remote work will be a permanent fixture at most workplaces, the outlook is likely more nuanced and complex. Younger workers living in major cities who crave professional experience and networking opportunities are likely to want to return to an office for at least part of the workweek if not full-time. As a result, the work-from-home trend will likely evolve into hybrid work and working remotely may not be as widespread and permanent as some initially expected.

Looking ahead, how companies decide to manage their workforce could hinge on where their offices are located.

  • Most hybrid work plans call for employees to be in the office two to three days a week, yet this is unlikely to be practical for those who move more than 50 miles away. Employers with headquarters and offices in major cities will need to decide if they will allow employees who relocate to work remotely on a permanent basis.

  • Employers will also need to set expectations on when remote employees need to come into the office and be sure that they comply with federal and state tax laws.

  • Companies based in smaller cities will have an opportunity to recruit from a wider pool of talent if they let employees work remotely full-time.

  • Companies will need to decide if they will offer travel reimbursements to encourage on-site visits from employees for important events.

Gen Z and millennials see a future where remote work is a given
Remote work is a top priority for young workers

Not only are younger workers more likely to be on the move, they’re also more likely than the two generations before them to accept smaller salary increases if given the option to go remote permanently. Nearly half of Gen Z (45%) and millennial (47%) employees surveyed said they are willing to give up 10% or more of their future earnings in exchange for the option to work virtually from almost anywhere. In contrast, 38% of the Gen Xers and only 14% of boomers said they would accept smaller pay increases.

Younger workers are also more likely to consider or plan a permanent or temporary move compared to older workers. This is consistent with findings from our October 2020 Workforce Pulse survey, in which younger employees accounted for 45% of all workers opting to voluntarily relocate.

Key takeaways

These findings come as the unemployment rate for individuals 16 to 24 years old hovers at 10.9% in February — higher than the national rate of 6.2% — indicating that younger workers are chasing jobs and are likely more willing to relocate to pursue or accept career opportunities. Some may be relocating because they want to work in certain sectors and need to go where those jobs are, such as hospitality in Las Vegas. Others may be drawn to locations with less expensive housing options or a lower cost of living. 

  • Not all young employees want to be remote, however. Gen Z and millennials in urban areas may be more interested in spending time in the office to build professional relationships.

  • Gen Zers in particular may be drawn to remote work for its flexibility. This generation appears far more willing than others to give up some of their future earnings for things like extra time off or dedicated time for volunteering — suggesting that they value the time and opportunity to pursue personally meaningful activities.

Employers should design a hybrid workplace where employees can work seamlessly in blended teams — whether they’re at the office or remote. This could include investments in different tools to fully support collaboration as well as standardized technology to streamline productivity.

Time is the new currency: Workers equate personal time with pay
One-third of employees value non-traditional benefits like paid time to volunteer

Employees want their companies to support their desire to pursue endeavors they consider personally meaningful. About a third (33%) of them said they would give up a portion of their future earnings in exchange for paid time off to volunteer for a cause of their choice, and 44% of workers said they would surrender at least 10% of a 20% pay raise if their employer provided unlimited vacation time.

  • Employees also want to spend their time learning different skills with the ability to choose what they learn. In our survey, 33% said they’re willing to accept smaller pay increases if their employer provided them with such benefits.

  • Overall, younger workers are more likely than older employees to accept smaller pay increases for non-monetary benefits, including extensive mental health benefits, unlimited sick time, flexible work hours, and remote work options.

Key takeaways

Companies should continue to rethink employee benefits and rewards beyond retirement and traditional healthcare. Providing paid time off to volunteer may not be a benefit that’s traditionally given to employees, but it’s worth noting the desire for time off for community service comes at a period when companies and investors are shifting their focus beyond the interests of shareholders following social justice demonstrations. Only a third (31%) of CHROs say they’re giving employees dedicated paid time off for community service and other activities they find meaningful.

To attract and retain top talent, companies need to rethink the employee experience, and there are certain nuances to consider.

  • While instituting unlimited vacation may be financially advantageous for companies, studies have shown that employees who have this option take fewer vacation days, as there’s no framework for how many days they can — or should — take off.

  • Instead of offering infinite days off, companies may want to consider simply giving additional vacation days to encourage employees to take time off.

  • If you offer these rewards, make sure employees can actually use them. If you don’t have a culture that encourages well-being and helps employees feel like it’s OK to take time off, they won’t be able to use the extra time. Encourage people to take time off, and let employees see their leaders modeling these behaviors.

Skills in demand: Employees value problem solving and adaptability
Most US workers consider softer skills critical to their future career path

When employees were asked what skills they consider critical to their career over the next three years, respondents were more likely to list softer skills such as problem solving than technical skills like coding. Gen X and boomers were more likely than Gen Z and millennials to consider problem solving and the ability to learn new skills and apply them quickly as critical to their career paths.

Key takeaways

The past year has been a period of problem solving and adaptability for most people, so it makes sense that many employees may see a need to sharpen these skills. They may see other skills like digital, data visualization, and leadership as table stakes.

  • Employees have signaled a robust appetite for learning and want to increase their productivity and employability. Help them understand what skills they need to build their careers and for your business.

  • Recognize that some employees may be hesitant about upskilling due to anxiety related to automation and job losses. Reassure them of your commitments to workforce investments and show them how upskilling will help them stay relevant.

  • Build a culture of flexibility and continual learning. For example, consider giving employees dedicated paid time off to work on upskilling, reskilling, and learning. You may also want to consider rotational or shadowing programs to give employees more opportunities to learn on the job.

By PwC