Houston workers don’t want a full return to the office. And a recession won’t force them to do it.

Houston Chronicle


July 31, 2022 Updated: Aug. 2, 2022 11:18 a.m.

Before the pandemic, Petar Radulovic was a commute warrior. He’d rise at dawn daily to traverse tangled traffic-filled highways for a 75- to 90-minute commute from Katy to his job near George Bush Intercontinental Airport. Then nine or 10 hours later, he’d do it all again.

Then came the pandemic, which gave him the opportunity not only to work from home, but also reclaim three hours of his life every day. So when his employer began requiring him to work from the office, he did what many other workers have done in the past year: He found another job that offered a flexible work schedule — even though it came with a 15 to 20 percent pay cut.

“The personal time and the family time I have, that’s grown exponentially since the pandemic began,” said Radulovic, 43, now a senior talent manager at the Houston offshore engineering firm Oceaneering International. “It is something that I value incredibly, and I wouldn’t trade that for anything at this point.”

Finding a job with greater flexibility is now one of the top three reasons job candidates look for greener pastures, according to a recent study by the global consulting firm McKinsey &Co. Flexible work arrangements have become so entrenched in the expectations of job candidates that companies are finding they must include flexibility in their offer packages, recruiters and human resource professionals said. That is creating a tectonic shift in the relationships between employees and employers that labor experts say can’t be undone — even during a recession.

“I don’t think you can put the genie back in the bottle. I think it’s out,” said Chad Hesters, managing partner in Houston with Korn Ferry, a Los Angeles-based recruiting consultancy. “It’s our view that this is part of the new work culture.”

The power shift

The backdrop for this rapid rise in remote work is a remarkable labor market in which there were about 273,000 unfilled positions in the 13-county region that includes Houston as of June, according to Gulf Coast Workforce Board, citing data from Lightcast, which analyzes online job postings. That compares to about 170,400 people who were unemployed across the region in June on a non-seasonally adjusted basis, according to data from the Texas Workforce Commission.

With talented job candidates a hot commodity, the power in the labor market has shifted from employers to employees over the past year or so, said Keith Wolf, managing director at the Houston recruiting firm Murray Resources. That gives top job candidates more leverage to demand better benefits, pay and remote work.

“They got a taste of it during the pandemic,” Wolf said. “We’ve spoken to numerous candidates who have fit this description: They’ve decided they are never going to work in an office again.”

The desire for flexibility is so widespread that Reynaldo Ramirez and Jason Walker, who work with many Houston firms through Austin- and Denver-based Thrive HR Consulting, said that they tell any Texas company not allowing some form of remote work that they are missing out on anywhere from 50 to 70 percent of qualified applicants.

If there isn’t a remote working option on the table, for many job candidates, “they won’t even talk to us,” Ramirez said.

And that’s because they are likely to find somewhere else that does offer flexibility: about 66 percent of employees in Houston said they can work remotely, slightly higher than the national average of about 58 percent, according to McKinsey.

Large influential companies in Houston have integrated hybrid work into their long-term strategies including Hewlett Packard Enterprise, Shell, BP, Chevron, KBR, LyondellBasell, Deloitte, J.P. Morgan Chase and Accenture to name a few. Even the region’s two biggest hospital systems, Memorial Hermann and Houston Methodist, as well as cancer center M.D. Anderson, offer remote work for roles such as administrative, human resources, legal, finance, real estate, communications and back-office positions that don’t require face-to-face patient interactions.

With about 2,200 working remotely at least part time, Houston Methodist determined it no longer needs about 100,800 square-feet of office space in Bellaire that the hospital system is trying to sublease. Methodist is even hiring out-of-state IT professionals and medical coders who may never live and work in Houston.

“Our talent pool has increased tremendously,” added Shibu Varghese, a senior vice president at M.D. Anderson, which has about 10,000 people working remotely or in hybrid roles in Houston.

A broader labor pool

Remote work is blurring the geographic boundaries of Houston’s labor market. Out-of-state companies are now hiring Houston workers without requiring them to move. And job candidates are evaluating positions not just in their local market, but across the globe.

That is the case for Vianna Sengphilom, a 27-year-old tech worker who lives in the Houston Heights neighborhood but works remotely for Boston-based Vista (owner of Vista Print). Sengphilom and her partner, who both work remotely, relocated to Houston from New York City during the pandemic in search of a more affordable lifestyle in a diverse, big city with a thriving food scene.

Now Sengphilom only travels to her company’s headquarters occasionally for meetings. Sengphilom, who focuses on recruiting digital designers for Vista, said the firm’s remote-first culture makes it easier for her to find the best talent. Most of the designers she’s helped to hire don’t live in Boston.

“If we didn’t have this remote-first culture, we never would have even heard of (these new hires) before,” Sengphilom said. “And they are absolute rock stars in their roles.”

Petar Radulovic laughs as he eats lunch with his 14-year-old daughter, Karoline, and seven-year-old son, Luka, at the family’s home, Monday, July 25, 2022, in Katy. After enjoying the time he got to spend with his family due to the added flexibility of working from home, Radulovic changed jobs last year when he determined that he would not be able to work remotely for his prior employer.

Mark Mulligan, Houston Chronicle / Staff photographer

Vista’s parent, the Irish company Cimpress, reported that since it implemented a remote-first policy in August 2020 the company has more than doubled its female hires in key leadership roles. Female attrition rates have fallen by a third, too.

Other firms — such as Oceaneering — said the added flexibility is helping their diversity initiatives, too, particularly for people balancing elder and child care responsibilities, said Holly Kriendler, chief human resources director at Oceaneering.

Even if the power in the labor market tilts away from job candidates, “there are employers who are going to continue to use (flexible work policies) as an advantage to get that diverse candidate pool in there and be more inclusive,” Kriendler said.

While Houston’s labor market is still roaring, if a recession does set in, that could give employers more leverage to dictate where employees work, said Parker Harvey, principal economist at Gulf Coast Workforce Board. But they may find the cost savings from remote work too compelling to turn back now, he said.

Already some firms with hybrid work policies are shrinking their offices in Houston, including Enbridge and Bechtel, which are cutting their office footprints in half, and Halliburton, which reduced its real estate footprint in Houston by about 30 percent in the past two years.

Meanwhile, M.D. Anderson before the pandemic had considered expanding its office footprint, but instead is turning underutilized office space into more research or clinical space, said Varghese. The cancer center is also enjoying the cost savings of less janitorial and cafeteria services, plus lower electricity and facilities maintenance bills, he added.

On average, employers are saving an estimated $11,000 annually on every employee who works remotely at least half of the time, when accounting for reduced real estate costs, lower absenteeism rates, less turnover and greater productivity, according to an analysis by the San Diego-based consultancy Global Workplace Analytics.

Vianna Sengphilom is a remote worker with Vista Print, a Boston-based printing technology company, works from her home office in her apartment on Friday, July 22, 2022 in Houston.

Karen Warren, Houston Chronicle / Staff photographer

As a result of those savings, if companies slow their pace of hiring or even lay off people during a possible recession, their remote working arrangements might not change much, Harvey said.

If the economy does slide into recession, it’s possible office-using professions may be more insulated to layoffs, but even if they weren’t entirely immune to job cuts “you’d still be in a universe in which for the last 2.5 to 3 years in the pandemic, the base (population) from which you’re recruiting has worked remotely in some form or fashion. That experience isn’t going to disappear,” added Ryan Luby, senior expert at McKinsey. “The longer we go in a situation in which hybridity and flexibility is the status quo, the more locked in that becomes into the behavior, and the harder it becomes to claw back.”

‘Sweet spot’

Critically, for the commercial real estate sector, most companies in Houston are requiring to workers to commute to the office at least part of the time. Most Houstonians working remotely are doing so three days a week, according to McKinsey.

Many job candidates prefer a balance that allows them to develop relationships with colleagues or get mentored at the office while having some of the benefits of flexibility, said Jason Wachtel, managing partner at the New York-based executive search firm JW Michaels & Co. But requiring too much time in the office can be a turnoff for some job candidates.

“There are companies requiring four days a week (in office); we have a lot of candidates specifically in Houston and other metropolitan areas that are saying that’s not good enough,” Wachtel said. “The sweet spot is generally two to three days a week in office.”

For job candidates like Abigail Schwaig, finding the right mix of in-person, in-office and at-home work was key for her job satisfaction. Schwaig said working in an entirely remote sales job during the pandemic was tough.

Vianna Sengphilom is a remote worker with Vista Print, a Boston-based printing technology company, works from her home office in her apartment on Friday, July 22, 2022 in Houston.

Karen Warren, Houston Chronicle / Staff photographer

“I really missed that human connection. It was sad,” said Schwaig, 28.

Last month, she changed jobs to a hybrid position at a Houston engineering firm where she commutes to work three days a week and works from her Galleria apartment on Mondays and Fridays. She likes being able to curl up by her rescue dog with her laptop on some days, and then swap stories with coworkers in the office on other days.

She she might have considered a job at a company that required employees to be in the office full time. But the hybrid schedule solidified her desire to switch to the new firm.

“(It was) an offer,” she said, “I definitely couldn’t refuse.”