Is the Future of Work remote?
The onset of COVID19 has heightened concerns over the future of (remote) work. As startups look ahead, questions loom: should remote work be adopted as the new normal or is on-site work still the long-term solution? The answer might lie somewhere in between.
This May, Twitter announced that all employees would be allowed to work from home “forever”. Facebook, Shopify, Square, and Slack soon followed suit with similar announcements. These decisions reflect how some measures implemented to deal with the pandemic could lead to a new normal.
Big tech leaders are not alone – 19% of founders are estimated to see remote work as a possible approach to the future of work and, in response to Covid-19, many other companies and startups around the world have adopted a WFH policy.
Critics, however, were quick to point out that moving towards remote work might come at the cost of employee collaboration and ‘serendipity’, a term that describes chance encounters, discussions and brainstorming between employees that drives creativity and new ideas. Some companies are starting to think that remote work isn’t so great after all, or that at least there are some downsides that require better planning and a more deliberate strategy.
Long-term, is remote work the way to go for startups? Is there a way to get the best of both worlds – the access to worldwide talent and the team cohesion and culture that comes from employees sharing the same workplace?
Adopting remote work comes with its set of challenges
Enabling a remote workforce is not “business as usual.” There are critical differences in managing in-office and remotely: communication, culture, and management must adjust. A fully distributed workforce has been proved a viable solution for tech companies such as GitLab, that successfully employs more than 1300 workers in 65 Countries. Adapting to this framework may not be an easy task for all companies though.
Even before the pandemic struck, companies such as the Bank of New York made headlines when it told staff in November 2019 that it was scaling back their ability to work from home. The bank's announcement followed decisions by IBM, Yahoo, Aetna and Best Buy requiring those working from home to return to a main office or worksite.
Why were companies watering down their remote work efforts, just as its infrastructure was surging? Which lessons had they learned that we should revisit today after we have all been obliged to adopt a WFH policy?
#1 Founders worry about a losing company culture
How can you begin to define ‘company culture’? For many startups, it’s the sum total of their ways of working, standards of behavior and interaction. And it is essential to build shared trust. Some entrepreneurs perceive shifting to virtual-working arrangements as risking the erosion of that common culture.
Startups contemplating remote work as a long-term solution might learn from past experiences of others who blazed the trail and then decided to scale back. In 2013, Yahoo!’s CEO Marissa Mayer acted on that same concern, effectively ending the company’s remote-working experiment, observing that the company needed to become “one Yahoo!” again.
#2 Does lack of community lead to a weaker collaboration?
In the US, the typical remote worker is a 49-year-old college graduate who earns about $58,000 a year and belongs to a company with more than 100 employees. Amongst them, there is no data to confirm that remote work limits creativity although concerns are raising over projects life-cycle and the effectiveness of team collaboration in a fully remote organization.
#3 The salary challenge: should remote workers be paid based on their location?
One of the most appealing aspects of remote work is that it allows remote workers based in low-cost-of-living places to apply for well-paid jobs. However, Facebook has been reported to plan to tie remote pay to the location of their employees. That would mean that workers earning high salaries and based out of locations with a high cost of living might not be able to keep their pay should they move elsewhere due to remote working. In practical terms, this means bringing the office-centered logic of ‘location-based pay’ into the fully-remote framework.
As of today, it’s still unclear whether this policy will be enforced, which would set a market-changing precedent, specifically for tech companies who rely heavily on a multinational work pool. Facebook alone employs +50.000 people from over 50 nationalities. Slack, Twitter and Square are reportedly studying the same shift, while other fully remote companies such as Basecamp are tailoring salary to the experience and tasks of the employee and not his/her location.
#4 Companies are struggling to deal with a sense of unfairness.
A feeling of unfairness might arise when only certain employees have work that can be done remotely. Prolonged physical detachment has been proven to lead to a sense that others might not be as productive as you.
Most companies had to leave their headquarters behind and pivot to remote work, with little time to plan. Now, 67% of entrepreneurs find themselves torn between going ‘back to normal’ once pandemic restrictions ease or adopting remote work as a new normal.
#5 Ensuring all employees have the same level of access to company information
Despite the moderate success of recent experiments with remote work, employers are slowly reopening offices to some of their employees to encourage social bonding, reinforce culture, and increase business collaboration. With part of the workforce being in the office and part remote, if processes and systems don’t adapt to support a partly WFH workforce, remote team members will be cut off of all the spontaneous brainstorming moments happening at the office, they won’t feel included and will face constant communication barriers.
Should employees return to the office?
Should companies write remote working off as just a forced experiment and hurry back to the office? As safety officials lift quarantine measures, many companies are weighing the pros and cons of going back to business as usual, physically in the office. That decision is made harder when:
The overhead of maintaining various offices is considerable. For a typical tech startup, office space in the US can amount to around 500 $ / month/employee.
Remote work tools are becoming more advanced - VR, for example, is showing promise and might be about to reshape the digital meeting world. Thanks to the evolution of VR devices, we are soon exploring the frontier of ‘heightened realities’ in the realm of professional collaboration
Social distancing requirements might mean that most companies won’t be able to return all their employees to the office at the same time, leaving even less margin for new hires. Reducing the number of staff in the office at any one time and longer-term design upgrades and modifications that put hygiene at the heart of workplace planning are costly endeavors that many entrepreneurs might be reluctant to undertake at this time of uncertainty.
By going back to the office, businesses might be passing on the opportunity to widen their pool of talent, especially for hard-to-fill roles. Before the pandemic struck, in 2019, 90% of millennials identified flexibility as a top priority when job hunting and 74% of workers said the ability to work remotely would make them less keen on changing jobs. Now, studies show that 98% of people would like to have the option to work remotely at least some time although only 7% want to work from home.
Going back to the office, even with safety measures in place, will take its toll on companies looking to attract, hire and retain top talent. Will remote work replace traditional offices? Some organizations are finding that they might not have to choose.
The alternative: a multi-site, remote-friendly work approach
Is it possible to get the best of both worlds? A possible solution might come in the form of distributed team hubs.
This new model promises greater access to talent, increased productivity for individuals and small teams, lower costs, more individual flexibility, and improved employee experiences.
This approach has also been dubbed ‘remote-first’, which means that employees primarily work outside of the office by themselves and can get together in physical locations, optionally and at their own discretion, for the occasional visit, reporting or meeting. So, what is the distributed model exactly?
There is no main office. In a distributed hubs model, the main HQ is replaced by many smaller hubs, spread across talent-rich markets. The executive team is not permanently based out of any location, or might be distributed amongst hubs to ensure equal distribution of power and opportunities amongst sites.
Employees can choose where they work. The future work is flexible – that’s what top-performing employees value the most from their employers. The distributed team model caters to this need-for-flexibility by allowing workers to choose between working from home, or from any available hub. This way, they get to decide whether to share a physical space with their coworkers,work from home or some other place
The distributed model is designed for ‘clash-of-minds’ and serendipity. In the distributed model, employees are encouraged to meet colleagues, and even spend some time in the other hubs. This strengthens the company’s culture and promotes cross-cultural collaboration.
In the distributed team hubs concept, offices are spaces of collaboration, discussion and creativity, whereas home is where the focused, intense work will take place.
But there is no one-size-fits-all solution. Instead, savvy startups are looking for the option that allows them to access talent across the world, keep the team and individual productivity high while keeping rental under control:
A comparison of the several organizational models, from in-office to fully remote. Source: Mckinsey
By combining elements from remote and on-site work, it might be easier for companies to suit most employees’ needs and lifestyle.
Making the shift to a distributed setup
What are the vital steps companies need to take in order to reap the benefits of a distributed team setup?
Decide where to deploy physical locations. Companies considering the shift will need to take into account the country’s public policy on foreign business and talent, living conditions, the stability of the government and startup environment. Certain countries have established themselves as innovation hotspots. Portugal, for instance, is ranked #13 on Talent Investment & Development by IMD World Talent Ranking, due to its education system, which makes for a great pool of local talent.
Don’t rely solely on virtual interactions. Despite big technological advancements over the years, nothing can entirely replace face-to-face communication: it creates significantly more opportunities for rich, informal exchange, emotional connection, and emergent “creative collision” that can be the lifeblood of trust, collaboration, innovation, and culture.
Document processes so they’re ready to scale. As companies grow and talent is sourced from around the world, scalable processes help to smooth the transition.
Set clear output goals and expectations. Micromanagement is not suited for distributed teams, or any teams really, but it is especially important to avoid it on distributed teams with flexible work policies Instead, companies should set clear company, team, and individual objectives and key results, and help coach each contributor to achieving it. Optionally linking them to the employees' pay.
For 67% of remote workers, the biggest challenge during virtual meetings are interruptions/being talked over and IT issues during meetings. During hybrid meetings (those with both on-site and remote meeting attendees from different locations), effective communication is the biggest challenge for both remote workers and on-site workers. Successful hybrid startups will be looking for ways to cope with these challenges in advance of major transitions.
For most companies, a distributed team set-up means they will capture top talent from all over the world, as they outgrow their natural talent pool, while maintaining a well connected, cohesive and motivated team.
What the future of work looks like
Business lives or dies by the quality of its people. Increasingly, top talent is demanding more flexibility in where and how they work. Startups looking ahead will need to find ways to provide workers with flexibility and foster a sense of belonging.
For most companies, the answer might be a distributed team hub model that combines the flexibility of remote work with on-site collaboration, strategically close to key talent pools that allow the company to find and curate top talent. In this model, there is no central HQ, but instead, teams can choose to work with colleagues in different hubs or choose to work from any other place, home or not, keeping an affinity to their local company hub for key moments like collaboration sessions, team events and even dealing with employment contracts. The management is also spread across locations to ensure equal decision power and opportunities. And creativity can flow freely with in-person debates and discussions, teams build their comradery and become more cohesive and effective. Technology still has no replacement for beer happy hour.
In the wake of coronavirus, startups strive for that delicate balance between freedom and unity – survival means compromising neither and BRIDGE IN can help you shape your organization so that it can thrive in an ever-evolving world.
