I love my neighbourhood: it’s green, quiet, and shows who I really am. A husband. A father. An employee, nowadays. COVID-19 showed us how much more efficiently we can manage our lives, work, and relationships — if we are forced to. Some companies learned this the hard way, while others took advantage of the latest trends. The most important change in corporate life is the long wait, and suddenly arrival, of the home office phenomenon.
Early home office (The Waiting Game)
Experts have long been predicting that remote work will be increasingly normal and that “office” will take on a whole new meaning. Since corporate culture is based on the office as the axis of work, and not just a place to complete the job-related tasks, it isn’t surprising that these forecasts didn’t seem to come true – or at least not as fast as the experts stated. Some progressive companies had already headed towards more autonomy for positions that were location-independent in nature. But this trend mostly occurred at smaller companies, where the reporting and accountability were easier — or at least more direct. Freelancers praised remote work, and companies integrated it into their practices. Such colleagues were typically employed by the aforementioned small, progressive companies, which were often founded by former freelancers who promoted this kind of work as well. They were creative, innovative, and free-spirited individuals who embraced freedom over regulations, and believed that some kind of jobs can be done from any place at any time. They stated that the results and the quality were the only real performance metrics, therefore other factors were irrelevant.
Office space trends (The Space Race)
Besides the institute of the home office, another trend in workspace flexibility was the coworking offices. The coworking office means a reasonable alternative to a representative office for a company that is not big, or not profitable enough to finance their own office space, but would like to operate in a modern, well-equipped office environment. Coworking spaces offer an office to rent for the companies that can vary their office demand and usage based on their current operating intensity and workflow. This kind of workspace created a flexible working method, that is somewhere between the “normal” office-oriented work and the home office. This option is preferred mainly by smaller companies.
Because multinational companies have always been more regulated, not only but mainly regarding work hours and workflow, they obviously weren’t so flexible about coming into the office. At multinational companies, someone’s work isn’t judged only by their results, but also by the time spent physically at work. This can be traced back to the basic office infrastructure, such as the computer and the corporate IT systems. Since a multinational company provides the equipment and supplies for the work, and they usually have their own corporate system that the employees use, it is somehow self-evident that the work is done solely in place. Of course, there were positions and areas, such as sales, where the work was already independent and less attached to the office itself, but the culture of remote work didn’t spread to other divisions at multinationals.
Although many experts predicted that office space demand would decline due to the remote work trends, this simply did not happen to the estimated extent. Except for some specific businesses models (e.g. consulting and accounting firms), which have desk-sharing or “hoteling” arrangements to reduce their office demands. The shared office or coworking office trend spread amongst those progressive companies mentioned earlier. According to a survey of coworkingresources.org and coworker.com, the number of coworking spaces worldwide was 16,599 in 2019 and is estimated to be more than 19,000 in 2020. The survey also mentions the number of people using coworking spaces: in 2018 this number was 1,650,000 while in 2020 it is estimated to be more than 1.9 million. The increase in the number of coworking spaces shows that the companies have long been using the office environment as a cost-cutting tool. Companies did not only use this form of operation due to cost-effectiveness, but also because they tried to follow the trends of the new generations’ demand for freedom and flexibility. Finally, the rise of the online team and project management applications further decreased the need for an actual, permanent office space.
A New World Order
Fears, lockdowns, and regulations forced people to completely overhaul their everyday practices in both their private and professional lives. Kids needed to stay home from day-care and school, forcing at least one parent to stay at home as well. This inconvenienced families because they needed to reschedule every routine. Those with flexible jobs could handle this situation easier and could solve the work vs parenting vs teaching challenges. Changes also came in the form of safety provisions issued by governments and companies. Office employees have the advantage of doing their work remotely; for many this started out optional and became mandatory a short time later. This option comes handy when people can see so many health or parenting/family issues in the current situation.
Remote work = cost-cutting
People are not the only ones overhauling their everyday practices: companies are doing the same. The financial advantages of remote work were too important to ignore. In times of economic uncertainty, companies tend to assess any cost-cutting options and when such an easy opportunity appears, they have to seize it. According to globalworkplaceanalytics.com, the average cost reduction for a person that works from home at least half the time is around 11,000 USD yearly. So, if a company can transition 1,000 of its employees to half-time telecommuters, it can save 11,000,000 USD per year. In light of the global crisis, this seems like a logical and promising option for decision-makers.
When talking about the cost reductions, we have to take the employee side into consideration as well, because for them, remote work also means savings. Working from home means one does not have to commute, and they can also reduce meal costs. According to a survey from Citrix (a global IT company specialised in workspace productivity solutions), 62% of employees would even take a pay cut to work from home. This means even more cost-cutting options for opportunistic companies.
Every cloud has a silver lining
The largest companies dealt with the biggest changes, since they were the ones that previously refrained from remote work. COVID regulations caused them to put aside their conservative approach and start implementing home office protocols. Unfortunately, those employees who did not originally embrace working from home have been forced to get used to it. If we think about employees whose daily schedules, work processes, social lives, and overall lives were built around the “normal” workplace, we can imagine how significantly they were affected by recent transformations. At first, these people were afraid that they couldn’t do their jobs properly, as their tasks and workflows were designed around the office environment. Most of these employees need guidance, reporting processes, presence of managers, and a strict work schedule with a precise workflow. Thus, it is no wonder that early 2020 was very challenging for most employees.
Soon after, however, people began to realise the perks of working from home. When people work from home, they can be with their families. This fact alone changed attitudes of the majority of people. One can find detailed research data provided by Buffer (a social media management, assessment, and research firm). According to their survey about remote work, 98% of people would like to keep remote work as an option, and 73% would be comfortable accepting a job without meeting someone in-person. For 70%, choosing the work location is a key factor when applying for a job. So, the benefits seem to drastically outweigh the costs.
Improved technology slowly caused the line between work and home to vanish. When people started to read their emails on their phones, work simply could not just stay at work. This was initially seen as a “privilege” for some positions. These were usually manager or sales positions, in which the work did not necessarily mean a 9 to 5 schedule. Nowadays, bringing work home isn’t limited to managers and salespeople; it can happen to any kind of employee. When taking the advantages into consideration, we cannot forget about the downsides of this newly adapted way of working and living.
Employees find the following things the most challenging about remote work:
- 22% cannot unplug from work, as their work and private life happen in the same environment. Without the change of location and defined office hours, many people had a tougher time clearly dividing their personal and professional time.
- 19% feel lonely, as the workplace was part of their social lives, and colleagues weren’t just fellow workers. As most of our waking hours were spent in the workplace, our work-based connections are also important. The elimination of these kinds of relationships causes a feeling of solitude that – as social creatures – affects people deeply.
- 17% struggle to communicate and collaborate, as personal discussions fall out of the communication processes and the lack of face-to-face communication can be challenging. Some people are concerned that the full extent of their professional efforts would not be appreciated because of a lack of in-office contact.
- 10% have distractions at home, as most people aren’t used to working outside of their workplace, and therefore, can’t focus properly at home. Moreover, except for the summer, the kids were also at home during office hours, which meant more possible distractions.
The management’s main role is, as the name itself says, the management of people and workflows, but when the people and the tasks are “remote”, it’s hard to manage. This challenge typically affects middle management and generates uncertainty. This is a two-sided effect: on one hand, management has to prove that it controls everything; on the other hand, it really has to control everything.This way, the doubts are not only towards the employees, who work “uncontrolled” from home, but there can be self-doubt as well. Managers worry about the following factors regarding their employees’ work:
- 82% worry about employee focus and productivity. Their inability to directly control the workflow and oversee their subordinates creates a high level of stress since managers are afraid that their team won’t be organised and effective enough.
- 75% worry about the reduction of team cohesion. The managers believe that the absence of personal connections can weaken the cohesion among team members.
- 67% worry about overwork. As employees want to prove their work intensity, they tend to work more hours than usual. This can cause work overload and in the long term, burn-out.
These statistics show that although employees and employers alike welcomed the implementation of remote working, both parties have their doubts and concerns about it. Decision-makers have to live up to their roles and make deliberate decisions. The constantly changing environment requires re-evaluation in many areas. As corporate life is about profitability, the first reactions and conclusions of decision-makers can seem logical. Corporate strategists, however, must concern themselves with more than just owner and shareholder profit; they are also responsible for long-term business effects and the changes they make to their employees’ lives. Decision-makers must know the true costs of cost-cutting. The consequences of this form of cost-cutting can only be assessed retrospectively. But it is already clear for those companies that approach the topic in a more person-focused way, that remote work is not for everybody. In several cases we also have to consider the effects of social isolation, burnout, decrease in efficiency, and all these factors will affect the cost-cutting vs losses. And these will not just result in financial losses, but can also cause serious challenges in the workforce in the not-so-distant future.