Covid-19 — the forced remote work experiment
Covid-19 has dramatically altered the way we work, and an unintended consequence of this forced experiment is that it revealed the many benefits of remote work. Working from home has saved American commuters nearly $91 billion since the pandemic started. Direct costs, such as fewer trips to gas stations and repair shops, and time value were the main contributors to these savings, which arguably go even further than purely monetary savings. No wonder why Google, Facebook, Twitter and Slack, four of the leading tech companies in the U.S., are not expecting workers to return to their campuses until at least the middle of next year. While at first sight there may be huge benefits to adopting fully remote work, will this approach prevail even after the pandemic?
There is no doubt that, without recent technology advancements, the effects of the Covid-19 pandemic would be much greater than they actually are. Thanks to video conferencing services, such as Zoom, Google Meetings and Microsoft Teams, employees can have daily meetings with anyone in the world with amazing video and sound quality. Slack makes it possible for employees to easily reach out to their colleagues as if they were approaching them at their office desks, and software development platforms such as GitHub enable full software applications to be built by dispersed teams of developers in a coordinated and frictionless way. The truth is that the internet and all tools derived from it have proven that we do not need offices to get work done, at least in the short-term.
The current remote work experiment we are living has not only shown us that we can work from home, but also brought to light several benefits that come with adopting this approach. Aside from the most obvious gains, such as cost and productivity time savings, not having to drive to work makes it possible for employees to achieve greater work-life balance and spend more time with friends, family and other relevant ones. On the employers’ side, adopting remote work significantly broadens their potential talent pool. Previously, companies were restricted to hiring mostly from a certain distance radius from their offices. With remote work, they can hire people from all around the world with different backgrounds and experiences, increasing diversity and potentially becoming a key competitive advantage. The tech industry is leading the change. Facebook is changing its practices to recruit talent far and wide instead of needing workers to live near campuses. Tim Cook mentioned in a Bloomberg article that he doesn’t believe Apple will “return to the way we were because we’ve found that there are some things that actually work really well virtually”. While it will not work for everyone, there is no denying that there are several advantages to shifting the workforce to remote positions.
Shortcomings of remote work
Even though remote work can be beneficial in several ways, there are also some downsides. According to the Remote Leadership Report, 95% of HR and engineer leaders believe they successfully navigated the transition to a remote workforce, but more than 60% of them have invested little to no time or resources in building a remote work process, structure and culture long-term. This is even more worrisome considering the communication challenges introduced by virtual environments that make it easy for employees to miss the socioemotional undertones communicated through nonverbal and paralinguistic cues (gestures, tone, pitch).
Remote work also undoubtedly diminishes the chances of having casual moments among employees for on-the-job learning, which could harm the transfer of knowledge in the long-term. This is particularly true for younger, more inexperienced employees who learn from observing and interacting with their more senior colleagues.
Additionally, having employees working from home daily poses new cybersecurity threats to companies as it becomes more difficult to control which devices they are using or if their networks at home are secure or not. This is evidenced by the surge in demand for the solution from one of Mindset Ventures portfolio companies called SAM Seamless Network, which provides cybersecurity for home routers and smart devices.
We are still in the early days of fully remote companies, but HR departments should already start considering what the long-term impact on collaboration, knowledge sharing, cyber vulnerabilities and overall organizational culture will be.
Hybrid-remote companies — the best of both worlds?
A new model that is trending now are hybrid-remote companies (firms with at least some of their workforce in permanent remote positions). This makes a lot of sense as it encompasses the best of both worlds. Companies can save on cost and have a more diverse pool of talent while still maintaining quality by hiring remotely for specific roles that do not suffer from lack of in-person interactions. In this sense, Mindset Ventures’ portfolio company Turing connects tech companies to “Silicon Valley caliber” software engineers spread globally at affordable rates. Turing predicts that 20–30% of tech companies’ software development workforce is better served with fully remote positions, both in costs and productivity. Brex, another Mindset Ventures’ portfolio company, recently announced it has decided to be a “remote-first” company, meaning that it will provide office hubs in major cities for employees who sporadically want to give a break from remote work, but all processes, communications, and culture will be designed assuming every employee is remote.
It is, of course, early to say which will be the most successful model in the future and there most definitely won’t be a one-size-fits all model. But allowing employees now and then to go to office spaces seems to be the most likely path forward for most companies. The days of having an entire team show up in the same office at the same time may soon be — and perhaps already is — in our past. How quickly and effectively organizations embrace the new world of work will be critical to their success during the pandemic and beyond.