Dive Brief:

• Remote work is becoming a permanent fixture among American mid-sized businesses, although from a technology and HR standpoint, firms at the larger end of the middle market ($50 million to $1 billion in annual revenues) have been better able to handle the transition than smaller firms ($10 million to $50 million in annual revenues), according to an October 2022 survey of 408 middle market senior executives by RSM US and the U.S. Chamber of Commerce.
• About half (52%) of the executives surveyed said they were sourcing talent for work that can be done remotely from a broader geographic area than before COVID-19. Just one-quarter said they plan to expand their physical footprint over the next two years, but that’s true more so among those at the helm of larger mid-sized businesses (35%) than those leading smaller mid-market companies (17%).
• Executives also reported a noticeable downside: Almost two-thirds (64%) said remote work has had a negative impact on their employees’ mental health, up from 55% last year. Nearly three-quarters (73%) reported that their workers felt isolated, up from 68% a year ago, the survey found.

Dive Insight:

Companies are adopting remote work practices to attract and retain talent, RMS said — and various polls back this up. In a recent survey by Harris Poll, 82% of U.S. hiring managers at companies that worked remotely during the pandemic said their organization plans to continue doing so, and most cited talent retention and attraction as the main reason.

From the employees’ perspective, remote work has opened up job opportunities for many individuals; for others, it’s been an equalizer and a way to maintain a work-life balance.

Of the former, because of remote work, employment numbers for individuals with disabilities exceeded pre-pandemic benchmarks, a Jan. 23 report from the Kessler Foundation and the University of New Hampshire’s Institute on Disability found. This could be partly because of the greater flexibility in work hours seen during the height of the pandemic and partly because labor shortages may have driven hiring managers to consider different segments of workers.

For employee caregivers, remote work is leveling the gender playing field, the consumer president of a digital care marketplace recently said. Women don’t have to drop out of the workforce to care for their children, and men are contributing more at home, too, the CEO and co-founder of the benefits platform said.

On the business side, remote work is beneficial because it can save companies money and allow them to hire from a broader geographic region, Tuan Nguyen, an RSM economist, pointed out in the report. 

But concerns about employee engagement and wellbeing temper the positive aspects. In a 2022 Conference Board survey, employees reported feeling less of a sense of belonging at their respective organizations, although the sentiment was shared fairly equally among fully remote workers (30% of whom said their engagement had decreased), hybrid workers (31%) and fully in-office workers (30%). More than a third said their mental health levels were lower.

One of the biggest adjustments mid-market firms will have to make to remain competitive involves workplace culture and how they can preserve it when workers are spread out across a region or even the world, the RSM report noted. The key is to have an open mind, RSM chief economist Joe Brusuelas said.