Remote Work Perspectives

2021-07-08

Abstract A look at remote work after a turbulent year of pandemic enforced work from home. I explore the pros and cons of remote working. Recommendation that teams requiring collaborative efficiency are best co-located

The 2020 pandemic accelerated trends, which were quietly dematerialising our world. Around May 2020, a number of the largest UK employers embraced work from home. These announcements came at a time of great uncertainty and economic anxiety, with employees needing to plan ahead. The question remains whether remote working becomes part of a new normal

There are signs big tech are summoning employees back to headquarters including Amazon:

“Our plan is to return to an office-centric culture as our baseline. We believe it enables us to invent, collaborate, and learn together most effectively.” 1.

A reversal on remote policy echos earlier reversals by IBM, Yahoo, Aetna, Best Buy. Others such as Apple hope to begin 3-day work weeks from September 2

Despite better communication software and faster network speeds in 2021, “…all of these technologies have a weakness, which is that we have to choose to use them…. Back in 1977, the MIT professor Thomas J. Allen looked at communication patterns among scientists and engineers and found that the farther apart their desks were, the less likely they were to communicate. At the 30-meter mark, the likelihood of regular communication approached zero.”[1].

The picture in big finance is more decisive with heads of Morgan Stanley 3 4 and [Goldman Sachs]“Goldman does not want to hire people for whom the most important thing is how many days they have to spend in the office. The others can have them.” (https://www.bbc.co.uk/news/business-57431263) seeing the remote movement an ‘aberration’ which has to be fixed 5. Reed Hastings of Netflix agrees:

“Not being able to get together in person, particularly internationally, is a pure negative”. “Once we can get a majority of people vaccinated, then it’s probably back in the office,” Hastings said, adding that it would likely take six months or so after a vaccine is introduced for that to happen. 6

Culture

Microsoft research found 67% of people wanted proximity and to work with people at some point | 7. “Pandora’s box has opened and likely we will be hybrid” - Julia Hobsawm - The nowhere office. Establishing and cementing relationships requires proximity, conflict resolution harder online 8.

Productivity

The shift to remote work the shift has gone better than expected9. Not surprisingly, self-reported productivity tends to be high high. It is clear that employees prefer remote on the whole, but not that these preferences map to organisation outcomes.

There have been mixed research results around the impact of remote work on productivity. BFI reports lower productivity in an extensive study which showed:

total hours worked increased by roughly 30%, including a rise of 18% in working after normal business hours. Average output did not significantly change. Therefore, productivity fell by about 20%. [2]

Remote working has also led to increased hours 10, an inability to unplug, more meetings 11.

The benefits of co-location depend greatly on the type of problem being worked on. Remote work benefits work characterised by well-defined uninterrupted work, whereas collaborative work is hindered:

But other types of work hinge on what might be called “collaborative efficiency”—the speed at which a group successfully solves a problem. And distance seems to drag collaborative efficiency down. Why? The short answer is that collaboration requires communication. And the communications technology offering the fastest, cheapest, and highest-bandwidth connection is—for the moment, anyway—still the office. [1]

Operational costs

It’s true, office space is expensive; the question to answer is whether it is worth it.

Office space may cost around 100k per employee per year depending on location. What does a company get for it?

Put some clothes on If the use of office is relegated to the being used by a few, there’s a chance it will be perceived as something of a luxury which privileged companies will offer to lure employees. Two types of employees will emerge in this new world; those waltzing around spacious plant-lined air-conditioned glass houses around prime real estate while their colleagues huddle in costa coffee shops or at home with the tumble drier in the background. Working from office means working out of your comfort zone, means dressing up and grooming, being scrutinised by strangers. Working at home just isn’t as sexy.

Pay Cuts One possible outcome to a workforce with lower living costs is lower wages | 12. An employee whose role can be conducted miles away at home should consider how resilient their role is to being outsourced, also see counterpoint

Growth opportunities

If you are young or developing your career, being in the office means being visible and first of mind when responsibilities are delegated 13

Economies of agglomeration

Knowledge jobs depend on agglomeration effects[3]; Americans living in agglomerations with more than a million people are fifty percent more productive. [4]:. Tech cities such as Silicon Valley are highly clustered, and profit from the ease at which technological advances, skills, learnings are shared by the region 14

There are innumerable benefits to the many unplanned, spontaneous and informal communications which take place during a work day not to mention the cross channel leaky types of just overhearing what co-workers are dealing with.


Franz Sittampalam | Software Consultant | LinkedIn

[1]
J. Useem, “When working from home doesn’t work - the atlantic,” The Atlantic, 2017 [Online]. Available: https://www.theatlantic.com/magazine/archive/2017/11/when-working-from-home-doesnt-work/540660/
[2]
C. S. Michael Gibbs Friederike Mengel, “Work from home & productivity: Evidence from personnel & analytics data on IT professionals,” Becker Friedman Institute for Economics at UChicago, 2021-56, May 2021 [Online]. Available: https://bfi.uchicago.edu/wp-content/uploads/2021/05/BFI_WP_2021-56.pdf
[3]
“Economies of Agglomeration.” wikipedia [Online]. Available: https://en.wikipedia.org/wiki/Economies_of_agglomeration
[4]
“Covid-19 is working from home really the new normal? | The Economist - YouTube.” Economist [Online]. Available: https://www.youtube.com/watch?v=MxDVucUZCnc

  1. Remote working: Is Big Tech going off work from home? bbc↩︎

  2. Apple Prepares Office Staff for Hybrid Workweek wsj↩︎

  3. ‘If you can eat out, you can go to the office’, says bank bossbbc↩︎

  4. Morgan Stanley CEO to NYC workers: Be back in the office by September or else cnn↩︎

  5. bbc↩︎

  6. Netlix boss says working from home has no positives - Forbes↩︎

  7. Money Talks - the future of work economist podcast↩︎

  8. Harvard Business Review - remote conflict management youtube↩︎

  9. economist podcast | economist↩︎

  10. A Year Into Remote Work, No One Knows When to Stop Working Anymore wsj↩︎

  11. buffer state of remote work↩︎

  12. pay cuts might be the price of freedom - reuters↩︎

  13. bbc - Why in-person workers may be more likely to get promoted↩︎

  14. Angel, D P. “High-Technology Agglomeration and the Labor Market: The Case of Silicon Valley.” Environment and Planning A: Economy and Space 23, no. 10 (October 1991): 1501–16. 14. ,15↩︎


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