I have done quite a bit of reading and thinking about remote work over the last few weeks. I approached my reading and thinking through questions that I wanted answered. Some of these are my own questions, but many arose from conversations with others including the Thriving Through Digital Group. If I had to summarise my number one take out from this work it would be this:
Remote work doesn’t change the fundamentals of good leadership and organisational culture, but it does make the fundamentals more important and it changes how you implement the fundamentals. The real issue is that too many leaders are not strong in the fundamentals nor are they familiar with the new tools that facilitate a great remote working experience which is why organisations should invest on supporting/ training their people in how to lead remote teams and how to use the new workplace tools in order for them to be able to lead and support their team effectively and efficiently.
I have captured my more detailed thoughts below for those who want more ……
What percentage of work can be done remotely?
Estimates vary from between 31% (Erik Brynjolfsson et al) and 44% (McKinsey) of jobs that can be done remotely. In their analysis, McKinsey states that the work that doesn’t require interpersonal interaction or a physical presence at a specific worksite is the type of work most amenable for remote work. When the various pundits do their estimates of remote work, it is not particularly clear what populations of work they are considering. On the surface, these estimates seem a lot higher than I expected. This is based on my intuitive feeling about the huge numbers of jobs that require a physical presence or are location dependant. All hospitality, all construction, most of health care, all manufacturing and supply chain. The list is long. It makes me wonder if the populations considered are predominantly traditional office jobs. They also noted that in general, workers whose jobs require cognitive thinking and problem solving, managing and developing people, and data processing have the greatest potential to work from home. These employees also tend to be among the highest paid.
In conclusion, remote work is set to widen the digital divide and the gap between the haves and have nots.
What type of jobs are best done remotely?
As McKinsey noted above, remote work revolves around two things:
- The degree to which your key job outputs are produced using computer / online applications. Why? This makes you location independent
- The extent to which you can complete your work independently from others i.e. there is limited need for collaboration for you to be effective.
While the ability to be location independent is reasonably black and white, the need for collaboration is shades of gray. It is possible to work remotely even if there is a significant need for collaboration. These needs can be met by, for example:
- The effective use of online tools. Depending on the job this may include video conferencing, shared planning and task management tools, “real time” chat tools
- Use of hybrid working rather than full time remote working.
Most commentators favour hybrid working to full-time remote working as it provides the possibility to combine the best of remote and in-person work. This is particularly good for those jobs that require high levels of collaboration and eases management concerns around the impact of remote work on culture and team cohesiveness. (I note that there appears to be a significant disconnect between leaders and staff on the importance of the office culture. In the extreme, leaders see the office as an important part of maintaining the culture, whereas many staff see the office as toxic and the scene of bullying).
What jobs can’t be done remotely?
Jobs that are location dependent. This is nearly everything where the primary work output is not computer / application based. I have listed examples of this above, but there are many others besides these (lets add emergency services – police, fire and ambulance, physical retail and most tourism jobs). There is much hyperbole from commentators that employers will need to offer remote work as standard if they are to win the war for talent. This may be true for some industries and job types (e.g Hi Tech industry and clerical / professional work), but this is far from true for many industries where location dependance is real. At the risk of stating the obvious, there is no one size fits all and employers need to think through their specific circumstances.
A final thought. If work can be done remotely, does it matter if that work is completed at home, 10 km down the road or in Mumbai? Remote is remote and if remote work truly is practical, then the labour pool is global. We will look at some of the implications of this later.
What are most organisations planning?
Here are some of the responses from organisations in New Zealand and around the world (broadly from most popular response to least popular response):
- Hybrid workplace. Under this scenario employees split their time between home and the office. The rule of thumb seems to be a 2/3 split with some organisations preferring two at home and three in the office and others three at home and two in the office. Some mandate the days you are required in the office; others allow employees to choose. So while hybrid is the most popular workplace choice, what exactly that means varies greatly.
- Remote work forever. This seems to be mainly coming from Hi Tech companies and I believe there are two factors driving this. Firstly, the work performed by Hi Tech companies is amenable to remote work and secondly, there are major skills shortages in Hi Tech and companies are looking for any advantage they can get to differentiate themselves and attract talent. There are some limits to remote work forever even from it’s most ardent supporters. For example Jack Dorsey of Twitter announced remote forever, but made an exception for employees who needed to be in the office to manage their servers (I giggled at the irony here).
- Return to the office full time. The most famous example is Elon Musk’s mandate – “return to the office full-time or find work elsewhere.” and that Tesla employees need to return to the office for a “minimum of 40 hours a week” or “They should pretend to work somewhere else.” If you dig below the surface of these quotes even Musk is not absolute, but he definitely sees it as a privilege to be earned rather than a right to be given (if a person is “an excellent contributor…….they’re allowed to work remotely”)
Many people have ridiculed Musk’s position on remote work and criticized him for being out of step with the modern workplace and ignoring research findings that support productivity improvements from remote work. Based on my reading and thinking on this topic, people are right to criticise Musk, but I confess to being somewhat hesitant on this as Musk’s track record in value creation is second to none and so hard to dismiss outright. This doesn’t mean he isn’t wrong rather that perhaps we should look deeper.
Over what time frame is a globalised workforce likely to be mainstream (if at all)? What are the key challenges / issues / opportunities that a globalised workforce will cause NZ?
First, the workforce has been globalising for decades. One of the early and largest moves to date has been ‘outsourcing’. It works in India (primarily), but this trend has accelerated and spread to more jobs. It’s hardly surprising as COVID has ensured we have all experienced remote working and for most it was a very positive experience and not the disaster we feared.
In light of this experience and given the much talked about skills shortages in most developed economies, why would we not consider sourcing more of our labour needs from overseas markets? Not only does it broaden our options in the war for talent (as talent arises everywhere, not just in mature economies), but it raises the possibility of decreased costs if you source from “cheaper” labour markets. There are of course some challenges to overcome if we are going to make the global workforce a reality, such as time zone, language, cultural sensitivity as well as maturing our remote working work environment. It’s imperative to work remotely in a crisis because we have to survive and remote working is our preferred environment. More on this later.
Back to the question at hand challenges and opportunities – these are top of mind for me:
- Higher wage economies will pick off our best people and limit New Zealand based companies from accessing the best talent. This is already happening. I know many New Zealand based people who are now working remotely for overseas based organisations (including Australia, USA / Silicon Valley and England) on overseas salaries while living in New Zealand. It’s great for them, but perhaps not so much for the future of the New Zealand economy as their talent is contributing to overseas innovation, not New Zealand innovation.
- Entry level / lower skilled jobs move from New Zealand to lower wage economies. I’m not an economist, and while this may be good for individual firms as it improves their access to talent and lowers cost, but it might not be so good for New Zealand Inc as it moves wages and salaries out of New Zealand and puts significant downward pressure on local wages and salaries threatening our standard of living. I also wonder how we develop our own talent if we only have a limited supply of entry level roles.
At its worst this leaves the local economy running on limited talent and with broken career paths. I might be being too negative, but the scenario worries me.
What are the issues with remote work?
As mentioned above, I believe there is a major difference between working remotely because we have to (aka the pandemic) and working remotely as a matter of personal and organisational choice. As we move from an environment of “have to” to “choose to” we will need to consider:
- Do we provide tech support for remote workers? If yes, how will we do this as our standard onsite support procedures will not work.
- Will we provide all or some of the technology required to work remotely effectively? Will this include laptops / PCs, a screen or screens, ergonomic chairs / desks, an appropriate internet connection?
- Who will be responsible for health and safety when home is the workplace?
- Is home really a productive work environment? During the pandemic I lost count of the number of VCs I was on where the call was interrupted by children or pets. No one minded that as we understood things were far from ideal for many. Will this understanding attitude continue?
- How do we measure / understand productivity? Many suggest you don’t or don’t need to that it should be taken on faith that people are more productive (accepting that there will always be those that take advantage). Maybe I am a control freak, but I’m not so sure of the faith based approach. I prefer the smart trust approach advocated by Stephen MR Covey. Implementing this is hard to do if a job does not have clear and agreed outputs and it’s surprising how many jobs don’t.
- This leads us to the issue of trust. Many workplaces are low trust environments. Managers need to see their employees working because they don’t trust them. It’s hard to imagine remote work working in the long term in a low trust environment.
- Then there is team culture and connection to the organisation. Leaders worry that remote work will undermine both culture and commitment and it is likely that new ways of leading will need to be developed
- Effective remote working requires high levels of digital literacy for all remote employees. This is hard particularly when you have 4 or 5 generations in the workforce and most organisations do not explicitly invest in people’s digital skills. Perhaps worse, leaders don’t invest in their own digital skills and set the example. (Dear leader, to be clear the ability to read PowerPoint presentations and to read and send emails is not sufficient digital literacy).
Thanks for sticking in there and getting to the end. What do you think? On the money or off track? What other questions would you like considered? I would love to hear your views and feedback.