What the Future of Work Means for your Business
Goldman Sachs CEO, David Solomon, made news this past February with comments on pandemic-induced work from home (WFH) situations. In a BBC interview Solomon said, “I do think for a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal for us. And it’s not a new normal. It’s an aberration that we’re going to correct as soon as possible.” He then added that the firm had operated in 2020 with less than 10% of its workforce in the office.
Perhaps surprisingly, Goldman Sachs returned robust 2020 results, with net revenues up 22% over 2019 and net income exceeding prior year as well. Diluted earnings per share was the second highest annual return ever reported by the firm.
Other leading financial firms have expressed similar concerns. In September 2020, JPMorgan’s Jamie Dimon declared that working from home had a negative effect on productivity, and Barclay’s CEO hoped that vaccines would hasten the return of employees to the office.
However, not every leader is bearish on the future of WFH. Financial giants Lloyds Banking Group and HSBC both reveal that they plan to cut office space usage over the next few years, due to more work from home accommodations. The technology sector has also shown a more positive approach to WFH. Facebook, Microsoft and Twitter have all given employees the option to permanently work from home and Facebook believes half of its staff will be remote within 5-10 years.
Work from home is not a new phenomenon, but it attained justifiably intense attention and scrutiny over the course of the pandemic, as employees move en masse to WFH where possible.
In a Harvard Business Review research paper titled, “Our Work From Anywhere Future,” Professor Rod Choudhury outlined key moments in the history of work from home, and how the pandemic is accelerating the adoption of not just WFH, but also work from anywhere (WFA) policies.
According to Choudhury, WFH germinated in the 1970s when the spike in oil prices justified the financial benefits of working from home. The practice blossomed in the early 2000s with the broad availability of personal computers, the internet and email. He also cited a 2015 study that showed that employees who got the option to WFH were 13% more productive, and when they got a chance to re-up nine months later their productivity was 22% higher than before the experiment.
What should we make of these positions and findings and how might they impact your business?
The pandemic is a wildly successful test run for WFH. Jobs that could be performed remotely were generally completed without loss of productivity. This is remarkable given the rushed, mandatory and stressful circumstances.Managers saw first-hand that employees could perform at high standards while working in makeshift settings, with the fear of a life-threatening virus and limited resources in many instances. Imagine the productivity gains when employers and employees mutually agree on WFH structures (fully in the office, fully remote or a hybrid) that fit the requirements of the job and the preferences and circumstances of employees.
However, before firms can properly assess and deploy a good WFH policy they will need to address a key intangible, that is, the conventional view among some managers that in-office work is a prerequisite for innovation, collaboration and productivity. Firms must also review the business needs, risks and exposures that are inherent in, or will arise from any new structure.
These critical considerations, many of which should be laid out in a WFH policy, include:
Labor Laws – what, if any, health and safety standards apply to WFH or work from anywhere? Who is responsible for additional costs an employee may incur? What are reasonable accommodations for someone with a disability?
Pay Equity – should (can) employers offer a different pay structure for WFH/WFA employees, those able to save on transportation and housing costs?
Promotions – will having less access to senior executives hurt the promotion chances of junior employees?
Taxes and multi-state implications – what are the possible cost implications with increased state (and even country) work jurisdictions?
Risk Management – what are the legal, insurance, technological, security and confidentiality implications?
By most accounts this global experiment, driven by a pandemic, has been successful and is here to stay. How can your organization adapt to a pandemic AND digital disruption and maintain or gain a competitive foothold?
Recognize that disruption – whether a virus or technological advancements – will necessitate new ways of working. Firms that adapt and evolve will reap the most benefits.
Security and confidentiality take on greater significance in dispersed, less controlled situations. Network, data and physical security (checks, confidential documents) and policies should be reviewed and strengthened as much as possible.
“Water cooler” moments are still critical even in self-selected WFH situations. Firms can still foster team cohesion through “virtual watercooler” moments with light-hearted Zoom-based events for example, and creating space and sharing opportunities that allow employees to come together, catch up with each other, and collaborate.
Agile and inclusive companies will have considered the potential impact on equity, mentorship, sponsorship, promotions, and pay, and will proactively work to address each.
While there is possibly no firm substitute for in-person events and communication, COVID-19 is a game changer. Choudhury neatly sums up the benefits and concerns of WFH/WFA, declaring that, “Organizations can reduce or eliminate real estate costs, hire and use talent globally while mitigating immigration issues, and, research indicates, perhaps enjoy productivity gains. Workers get geographic flexibility (that is, live where they prefer to), eliminate commutes, and report better work/life balance. However, concerns persist regarding how WFA affects communication, including brainstorming and problem-solving; knowledge sharing; socialization, camaraderie, and mentoring; performance evaluation and compensation; and data security and regulation.”