Recruiting Trends: 80% Prefer Hybrid Work Setup

In the last years, we learned that most candidates across all demographics prefer a flexible work policy with a remote option. Don’t ignore reality—tap into the global talent pool

By Andrea Althaus and Mirela Stefan

Over the last six months, we conducted 2,500 candidate screening calls for Project A and our portfolio companies to understand people’s unique skill sets, motivations, and company/team fit.

After analyzing candidates’ desire or willingness to change jobs, it became apparent that the most significant change in work culture is a company’s in-office/remote/hybrid work policies.

Nearly every second talent–regardless of age, family, and status–preferred a flexible work setup with a remote option. Furthermore, over 80% of the candidates we interviewed were unwilling to accept a job if the company didn’t offer a hybrid setup compared to companies that re-introduced a strict in-office work policy. 

Flexibility is a main talent attraction drivers

Candidates’ preferences for flexible work became apparent even before we spoke with them during an intro call. During our direct sourcing activities on platforms like Linkedin, Xing, and others, we realized that flexible work was a major factor influencing prospective candidates’ interest in new roles.

Over the last 12 months, we contacted 32,000 people, accumulating a response rate of 30%. However, we noted that only 25% of those respondents agreed to have a call with us. We decided to investigate their reasons and motivations for not changing jobs. 

The graph below includes the top four reasons why most prospects rejected the job offer:

A pie chart listing reasons people don't want to leave their current jobs: • Happy in current role / not wanting to leave
• Location
• Starting a new role
• Personal reasons
• Other
20% of candidates were unwilling to relocate for a job that requires a daily office presence

Being happy in their current role was the primary reason for staying. However, we found that 20% of prospects declined our proposal because they were unwilling to relocate for a job that requires a daily office presence.

From their perspective, remote work didn’t reduce their productivity and, at the same time, offered greater flexibility: They didn’t have to choose between being close to their family or friends and moving for a job.

The argument for in-office work

While candidates view flexible workplaces as the new normal, many of Project A’s portfolio companies have opted to re-establish office presence as a job requirement.

We found that some newly founded companies, in particular, often prefer to build a team in-office. The reasons include attending more in-person customer meetings, building a team culture, identity, and processes, as well as collaboration, training, and leadership efficiency.

In contrast, our cooperation with around 15 later-stage portfolio companies indicates that more mature businesses with stable cultures are inclined to adopt remote work policies. This provides access to a broader talent pool and increases talent attraction and retention.

Main aspects of adopting a global hiring strategy 

You shouldn’t be confused by the headlines about massive layoffs in tech companies: The trend mentioned above remains relevant as the high demand for skilled talent continues despite the war in Ukraine and the recession.

We had about 820 openings across our portfolio this year, compared to 1,300 open vacancies the previous year. And in February 2023 alone, we recruited for more than 100 jobs.

Since there’s a shortage of qualified talent, especially in tech hubs like Berlin and London, we believe businesses should extend their geographical reach when hiring. Based on the company’s growth strategy, global hiring should consider remote workers and relocation.

There are several factors to consider when moving to a remote work culture: Legal requirements, costs, and cultural awareness. When choosing which setup to adopt – in-office, remote, or hybrid – do your research first, and consider the following:

  1. Salary benchmarks and benefits vary across locations. Candidates might be unaware of these differences, and sometimes the company has to educate them. For example, in the EU alone, each country has its own social security laws, and companies need to add 10% to 20% on top of the salary. 
  2. Cost of living in different countries. For instance, some of our portfolio companies are located in Germany but employ people in Mediterranean or East European countries, requiring a hybrid setup, if not fully remote. Since the employment costs are lower in those countries, the company would benefit in the long run. 
  3. The cost of collaborating with third parties to help with hiring or relocation. Depending on a company’s preference for global hiring and internal resources, it will also need to outsource these tasks and get support, which will likely add additional costs. However, if you consider long-term employment costs, it can pay off. 

During the last years of hiring for more than 300 jobs globally, we learned that listening to candidates’ desire to work remotely is crucial to extending your pool of candidates and winning in a competitive talent market.

As our findings indicate, asking if this is just a temporary trend is the wrong question, as it’s been answered with an unequivocal no.

It remains to be seen whether companies that choose to ignore it will face challenges in the long term, not only in staffing but also in retaining employees.