City of Austin employees going back to the office later this year: Will it hurt hiring?

AUSTIN (KXAN) -- As City of Austin employees shuffle to in-person work starting later this year, recruitment and staffing companies say the city could face hiring challenges.

Murray Resources -- a recruiting and staffing firm with an office in Austin -- said clients that don't offer a work from home option at all get anywhere from 25% to 75% less candidates, depending on the position.

"If it's 100% in the office, what we tell our clients is that you are giving up a large portion of the candidate pool," Keith Wolf, managing partner at Murray Resources, said. He noted that the hybrid role, where people can work in the office some days and at home others, are typically the most sought after.

Some positions with the city will be hybrid starting later this year. Starting in early June, employees in management positions with the city will be required to work five days a week in person. Non-executive staff who have been working from home will have to return to the office no less than three days a week starting in October.

“It is imperative, in my opinion, that we work to ensure the public’s trust. We cannot completely do so if we are not present or responsive to their needs. With this in mind, we must address the various department policies surrounding telework,” Interim City Manager Jesús Garza said in a memo to employees.

Earlier this month, the city said its vacancy rate is 15.3% -- the lowest it's been since February 2022. Vacancies have dropped from 2,537 in January to 2,401 openings in April, it previously reported.

Julia Pollak, the Chief Economist at ZipRecruiter, said in the company's "job seeker" surveys, roughly 60% of people looking for employment on the job site prefer a remote job. Of those people, 20% said they are only seeking remote work.

"When you look at the same kinds of roles, when companies convert roles to remote roles, they get much higher interest and engagement on those jobs. They also tell us that they have much better retention," Pollak told KXAN.

She also said studies show two days in the office seems to "raise productivity and employee satisfaction." When companies require employees to be in the office more than that, "it can be a significant retention risk."

"Workers view remote work as the equivalent of about an 8% pay increase. That's how much they value it because it frees up time that they would spend commuting and also just allows them to have better work life balance," Pollak said.

According to a new US Bureau of Labor Statistics report, which looks at data from the end of 2022, less than 30% of private-sector businesses have employees who are teleworking. That accounts for roughly 2.5 million employees nationwide, the report said.

National companies like Disney and Amazon are now requiring employees to return back to the office at least several days a week. Disney employees were told to be in the office no less than four days a week at the start of the year, according to CNBC. Amazon employees are required to be in-person three days a week as of May 1, NBC reported.

Meanwhile, many Travis County employees are still allowed to work from home. The county is undergoing a third-party study to establish a policy moving forward, and departments will be able to opt into that policy.

Travis County officials have previously said that the county saved money after sending employees home during the pandemic and that departments were actually more productive.