There will not be one homogeneous trend that will define the future of work for all of Europe in 2022 but several. The European workplace remains heterogeneous and will face significant differences in economic performances and employment levels in 2022. For 2022, we expect that:
- Skilled employees will “force” employers to grant them greater flexibility — or leave. In 2022, most employers will give employees more power to self-manage by granting more flexibility regarding work location. According to Forrester data, by summer 2021, 49% of employees in the five largest European countries claimed to prefer working from home. Only 32% of employers stated that they are willing to grant this flexibility, however. The majority of European businesses will move toward a hybrid workforce and anywhere-work approach. Those businesses that are unwilling to grant employees greater flexibility will see increased attrition of talented employees.
- Eastern European job markets will suffer from ongoing Covid implications. The shadows of the pandemic will not retreat at the same time across Europe. For Europe, the labor market is recovering fast, with unemployment falling to pre-pandemic levels by the end of 2022. The low vaccination rates in Eastern European countries, however, will exacerbate the weak economic performance and poor labor prospects in most Eastern regions. We see a real risk that job markets in Eastern Europe will recover more slowly from Covid than in Western, Northern, and Southern Europe in 2022. In turn, this will have detrimental implications on workplace investments.
- European businesses will need to revisit employee privacy and tax regulations. Hybrid working will bring e-monitoring of employees into their homes. Both employees and employers require transparent governance for remote working regarding the right of information and confidentiality of communications. Moreover, in Europe, there are about 1.5 million cross-border workers. Hybrid working conditions will have unintended knock-on effects, because as business goes cross-border, taxes stay local. Although, in 2021, the OECD issued updated guidance on tax treaties and the impact of the Covid-19 pandemic, there is not yet a transparent framework in place to address this cross-border tax challenge. Businesses must navigate tax and privacy regulations carefully in 2022.
- European business travel will not resemble pre-pandemic levels. In 2022, we expect conferences and industry events to come back in Europe. For instance, Mobile World Congress will be a live event in February 2022. Forrester data shows that 36% of employees are willing to return to business travel. We also expect offices to reopen on a grander scale in early 2022. Still, we don’t expect business travel to reach pre-pandemic levels in 2022. It is less so health and safety concerns and more so reduced travel budgets and ambitious sustainability targets that are holding back a faster recovery, yet those business leaders who bet on the value of face-to-face interactions and do support business travel might forge stronger business relationships faster in a post-pandemic world in 2022.
2022 will offer European businesses an opportunity to put lessons learned regarding employee self-initiative, flexibility, collaboration, open innovation, and productivity into action. Those businesses that start implementing the necessary changes will thrive; those that revert back to old habits will suffer talent attrition and customer churn.
To understand all of the major dynamics that will impact European businesses next year, visit our Predictions 2022 hub.
This post was written by Principal Analyst Dan Bieler and it originally appeared here.