To quote the late, great Yogi Berra, “It’s like déjà vu all over again.” As we approach the summer of 2022, we are still dealing with the same issues we had in the summer of 2021 and the summer of 2020. COVID-19 case counts are going up again across the U.S. due to a rise in the BA.4, BA.5 and BA.2.12.1 subvariants of the Omicron variant. At the time of this writing, the seven-day average of daily new coronavirus cases has risen to above 100,000, which is more than three times higher than one year ago according to the Centers for Disease Control and Prevention (CDC).
In addition, supply chain issues linger, the microchip shortage continues, and we are still facing geopolitical conflict and economic uncertainty caused, in no small part, by levels of inflation that have not been seen in 40 years. As the Federal Reserve tries to mitigate the effects of inflation by raising interest rates, fears of a looming recession are causing a collective shudder through stock exchanges and businesses. In a recent interview with CNBC, Alan Blinder, the former Federal Reserve Vice Chair admitted that there could be a 50% to 60% chance of a recession on the horizon.
In the face of all of this uncertainty, I’ve consistently been offering one piece of advice – reevaluate the way your company works. Organizational operating models are changing. In this time of great upheaval, the old way of doing business is no longer working, and the businesses that emerge from these challenges successfully will be the ones that can evolve and transform accordingly.
A Remote Solution
“The office as we know it is over. It is an anachronistic form factor from a pre-digital age.” These are words spoken by Airbnb’s CEO and Co-Founder Brian Chesky in an interview he did on May 18, 2022 with The Washington Post. The reason for the interview? Chesky announced that all 6,000 of Airbnb’s employees were going remote. Everyone, including Chesky, was free to live wherever they wanted and travel as they pleased with no cuts in pay for lowered costs of living. After he made the announcement, Chesky reported that Airbnb had more than a million people visit their careers and jobs page on their website.
By now, we’re all familiar with some of the ways that remote work benefits employees – they can opt to live in a less expensive city, they have more flexibility to take care of kids and pets, they have greater autonomy, improved productivity and higher job satisfaction. They spend less on fuel and food. And last, but certainly not least, remote workers report having a better work-life balance. However, the benefits of remote work extend to employers as well.
One benefit that Chesky noted during his interview for The Washington Post was the opportunity for a company to recruit from a bigger talent pool. Instead of being limited to hiring people within a 50-mile radius, you can now hire anyone in the world without any relocation costs. Job seekers, on the other hand, will be more attracted to your business because they can be remote. Instead of your business competing with other organizations for talent, job seekers will be competing with each other to work for you.
In addition to winning the war for talent, the cost savings of going remote can be significant for any business. Companies that go remote will save significantly by reducing their commercial real estate costs, which can include rent, utilities, cleaning services, office equipment, office supplies and insurance. Other savings may be a bit more indirect, but they add up. For instance, if your employees are more satisfied with their work situation, then they may avoid stress and burnout, which can lead to increased healthcare costs, missed workdays and lost productivity. Plus, happy workers stay at their jobs longer so you can save on turnover costs as well.
If you’re doing the math in your head right now, you’re likely realizing what all of this could mean for your profit margins. In an article about the benefits of remote work on TheStreet, Dave Rietsema, Founder and CEO of Matchr.com, a leading Human Resources software company, estimates that “Companies can save up to $11,000 per employee in terms of overhead costs if they switch to remote work.” If you employ 6,000 employees like Brian Chesky of Airbnb, that’s a cost savings of 66 million dollars a year!
Hybrid Without The Headaches
Hybrid work has become a popular option for companies trying to thread the needle between worker demands and company requirements. This experiment is playing out in real time and we’re seeing that some hybrid work models have had a few hiccups. For instance, in companies who allow their workers to pick which days they come into the office, workers often find that they chose a day that no one else did. In a moment of epic irony, these employees find themselves working alone at the office instead of working alone at home.
And while offices may have been noisy and full of distractions before COVID-19, workers seem to be affected by this atmosphere more now due to the years of imposed isolation. While some workers felt like they were distracted by kids and pets while working at home, other employees feel like they can’t get any work done at the office. A recent Clockify blog post cited studies that show that as high as 70% to 90% of employees feel distracted at the office with up to 56 disruptions counted during the day. The same studies show that it can take almost two hours for an employee to refocus their attention after suffering a distraction.
Not only do they feel unproductive, but they also feel uncomfortable in unfamiliar surroundings. After creating a comfortable workstation at home, many workers find that they have to cart peripherals and other elements of their workstation back and forth to the office or buy duplicate equipment to achieve the same comfort. Plus, many companies fail to enforce anti-COVID-19 policies making employees feel that their health and the health of their loved ones is at risk from offices that don’t go far enough to prevent the spread of disease.
Transitioning to a hybrid work model without the headaches is indeed possible. A Robin survey of over 10,000 offices found that 20% of American workers are working at the office one day a week, 10% are working onsite two days a week, and 5% of workers surveyed are back in the office three days a week. Enticing employees to come back to the office is not a one-size-fits-all proposition, and it’s important to figure out exactly what it is that you can offer your employees at the office that would make it more attractive than working from home. With proper understanding and preparation, hybrid work can be the most pragmatic, inclusive and accommodating work model solution.
Innovative work models were emerging before the pandemic, but they are now being adopted at an accelerated pace. Among these alternative work models is the hub-and-spoke model. This type of work arrangement has a central office that functions as the central hub of the company. Off of that central hub are spokes, which function as satellite offices. The spokes can range from commercial offices in different cities to workspaces for just one employee. In the hub-and-spoke model, the opportunity for creativity and innovation is unlimited. Companies have the ability to customize their hubs and spokes in whatever ways uniquely benefit their organizations.
For example, Amazon has long been a champion of the hub-and-spoke model with offices in 17 cities in North America. In August of 2020, they announced plans to open six satellite offices in Detroit, Dallas, Denver, New York, Phoenix and San Diego resulting in an additional 3,500 jobs. Each of these locations is strategically chosen to take advantage of the talent, tech and business resources located in each of these cities. Spurred on by the pandemic, Google has decided to follow Amazon’s lead. While the company is famous for its “Googleplex” headquarters in Silicon Valley, CEO Sundar Pichai says that the company is planning on opening smaller offices around the country in order to give employees the flexibility to relocate.
In an interview with Forbes, Adam Segal, CEO of cove, a real estate tech company, describes what he envisions the future “hub” will look like. He imagines there will be quiet spaces for concentration and gathering spaces for collaboration, eliminating the need for a designated desk per each employee. He posits that the future of work is about personalization. So, too, should the hub and spokes of an organization be personalized in order to empower each and every employee to give their best professional performance.
Companies are choosing unique solutions that make sense for their individual organizations. While Airbnb is going fully remote, Chesky still intends to get his workers together in the same physical space on occasion. For one week a quarter, Airbnb employees will meet together for what Chesky describes as, “meaningful experiences that we’re going to design to build trust, connection and do important collaborative work.”
Are You Ready To Go Remote (Or Hybrid Or Other)?
In Chesky’s interview, he makes his feelings clear about traditional offices. “We need to let go of the form factors of the last 50 years and imagine if you started from scratch, what would you do?” That’s a great starting point and one that we’ve been using when we talk to clients about their specific organizations and their specific goals for transformation.
The first step is always to evaluate each area of function and each role in the company to figure out which work model would make the greatest positive impact. The silver lining of the pandemic is that it has given companies the opportunity to reimagine their operations. Starting from scratch is no longer a hypothetical conversation, but an exercise in resilience.