The “Great Resignation” and talent shortages in 2021 and 2022 created a candidate-driven labor market where workers had the upper hand, more say, and the ability to be choosier. The current economic uncertainty and a possible recession may take some of that say and power away.

While many companies were familiar with remote work before the pandemic, others were forced to send their employees home to work in March of 2020. They have since adopted hybrid work models or have chosen to remain fully remote. With almost three years of work-from-home data, it’s clear that it presents both benefits and challenges for organizations.

Benefits of remote work

Increased productivity and morale: Before the pandemic, employees were in the office and managers could see them working, which provided validation that they were being productive. That is not as easily accomplished when it comes to remote workers. However, it’s been found that the flexibility and autonomy that remote work offers have led to increases in employee productivity (53 percent), morale (47 percent), happiness (22 percent), and performance (22 percent). Employees working from home are not distracted by office politics (25 percent) or affected by interruptions from colleagues (34 percent).

Larger and more diverse talent pool: Because candidates can be recruited from rural areas and other countries, remote work opens your organization’s hiring efforts to a larger geographic area and talent pool. One survey found that remote roles attract 2.2x as many candidates as non-remote positions and 2.2x more women. Since the pandemic’s start, the number of workers with disabilities has increased by more than 12 percent.

Improved attendance and retention: Prior to remote work, when a worker had a nagging cough but was okay to work otherwise, he/she could either take a sick day or risk a coworker in the next cubicle over giving them dirty looks all day. In hybrid work models, employees feeling under the weather can work from home without taking a sick day. In addition to fewer employees calling out sick, flexible work options provide business continuity during emergencies such as snowstorms and the pandemic. Remote work also allows organizations to retain high-quality employees that move to a new state. Overall, hybrid work decreases employee attrition by 35 percent.

Related: Using Remote Work to Retain Your Top Talent

Challenges of remote work

Corporate culture maintenance: A Society of Human Resources Management (SHRM) survey found that 66 percent of CEOs and 62 percent of CHROs believe that remote work’s most significant talent management challenge is maintaining their corporate culture. A remote workplace can create a lack of employee connection and communication, causing workers not to feel seen, heard, and as if they belong.

Effects on mental health: Working remotely requires discipline, the ability to prioritize and self-motivate, and the capability to separate work from personal life. 27 percent of workers feel that being unable to unplug is the biggest struggle with remote work. Working longer hours can cause burnout which causes physical and mental health issues. Working from home can also lead to feelings of social isolation, loneliness, and being less connected to coworkers, which affects mental health. Employees with unresolved depression experience a 35 percent reduction in work productivity.

Cybersecurity risks: When employees access company data using an unsecured internet network and/or in the cloud, it provides cybercriminals access to confidential and sensitive information and data. In fact, during the pandemic, cyber-attacks increased by 238 percent. Security breaches can lead to theft and costly damage. The use of personal devices for work continues to increase and shift the definition of a security perimeter.

The Outlook for Remote Work

As we start 2023 and the three-year mark of remote work, Gallup projects that around 75 percent of remote-capable workers will be hybrid or fully remote for the long term. However, “There’s a genuine divergence between organizations,” said Melissa Swift, a workforce transformation leader at consultant Mercer. “You’re starting to see companies pick sides.” 62 percent of employees prefer some mix of in-person and remote work. Yet, some leaders report that the shift to hybrid work has attributed to productivity paranoia, causing them not to have confidence that their employees are productive.

2023 may determine what the future of work looks like! The data shows that remote work benefits employers and employees—when it’s properly managed—and companies are striving to find a happy medium.

Hybrid work compromise: According to Gallup, “fully remote work arrangements are expected to continue decreasing from three in 10 remote-capable employees in June (of 2022), down to two in 10 for the long term, despite 34 percent wanting to permanently work from home.” The same survey found that hybrid work has been on the rise and was expected to increase to 55 percent of remote-capable workers by the end of 2022 and beyond. Fully on-site work options are expected to become a remembrance of the past, with only 20 percent of remote-capable employees working entirely on-site in the future. The hybrid work model creates security challenges for IT departments and new opportunities to implement modern cybersecurity practices.

Prioritization of employee well-being: For leaders who did not have to manage a workforce divided between the office and home pre-pandemic, managing in a hybrid work environment requires a different leadership style. Employee well-being needs to be at the forefront of every manager’s mind. Leaders should be aware of signs of changes in an employee’s mood or behavior which could signal that he/she is struggling. Facilitate open and honest communication, have 1-on-1s often, provide support, and be understanding.

Related: The Importance of Stay Interviews to Retain Talent

Increased focus on corporate culture: Hybrid work requires organizations to maintain a culture of connection. Leaders need to be deliberate in communicating a shared purpose and how each employee contributes to the company’s overarching mission. Promote belonging through employee recognition to ensure employees feel seen. Pulse and engagement surveys offer good insight and make workers feel heard and that their opinions and ideas matter. Build time into meetings for casual conversations and provide frequent opportunities for relationship building.

Related: The Effects of the Labor Shortage on Workers

This blog was written by Broadleaf Vice President of Client Delivery Suzie Mitchell.