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Unshackled: Working From Home the New Normal

2021 will undoubtedly go on record as perhaps one of the most challenging years in recent decades as the Covid-19 pandemic has been a catalyst for change in the workplace. Organizations have long sought ways to improve performance and, ultimately, the bottom line. However, for businesses that are slow to adapt and are less agile, 2021 brought upon a whole host of challenges ranging from finding ways to safeguard employees while migrating to a new form of business continuity that not many had envisioned or even considered.

Before Covid-19 and subsequent strains of the virus sparked a global pandemic, most business owners regarded the office as the central hub for business and critical in ensuring productivity remained consistent or on the rise. In addition, offices were a home away from home. many regard their fellow employees as their, “work family.” They became environments of growing various cultures, luring new talent, and legitimizing a business that had grown from home-based operations to the big leagues. Finding attractive real estate, investing in ergonomics, co-working, and hoteling seemed to be the rising trends.

As a result of the pandemic, estimates indicate that 62 percent of employees in America began working at home; whereas, the numbers were the reciprocal only a couple of years prior (at 26%). The adage goes, “necessity is the mother of invention.” With many in the workforce retreating to the safety of their homes, new technologies and ways of collaborating have been put to the test, reimagined, or implemented in ways that few expected. For many, the results of this new form of satellite work have been astonishing.

In a recent survey, 80% of people interviewed reported that working from home was more fulfilling, with 41% of respondents stating that they felt more productive in the home environment—the underlying reasoning primarily based upon the time and frustration of the daily commute. With hours of dealing with traffic now in the rear-view mirror, employees are finding that they are less stressed, more relaxed, and better prepared to take on the challenges of the day ahead of them. This move from the office to the home is the counterbalance in the work-life balance equation for many. But this move is not only advantageous for employees. Many employers are now better equipped to access newer talent pools without the constraint of locality preventing apparent pairings. Employers also enjoy reduced costs as new initiatives and the adoption of liberating technologies no longer chain their employees to the office. With lower real estate costs a significant determining factor, companies who adopt work at home policies find that the new model is just one of many factors making this move more impactful on their bottom line. In addition, the cost of retrofitting an office to make it pandemic-proof is costly as many employers provide personal protective equipment, redesigned spaces for social distancing, and a host of other expensive contingencies to accommodate in office environments to quell the spread of the virus.

Still, opponents of work at home policies cite that corporate culture suffers and community erodes over time without the day-to-day interactions that are common in office environments. Many claim that working from home has only been successful because it is only temporary. They argue that there is less opportunity for mentorship and talent development. And while these claims have merit to some degree, the ability of companies to adapt and adopt are signals that indicate the degree of leanness an organization has.

So what are some ways that organizations can reimagine themselves and adapt to the strange new world imposed by the pandemic? While there is no one-size-fits-all solution, every business will have to consider their industry and the services and solutions they offer. The main questions center around the talent necessary to operate, the delineation of roles, who does what within an organization, and the degree of collaboration needed to reach business goals in the years to follow. Change management skills and constant pivoting will likely be the buzzwords you will hear as companies begin to adapt and adopt new processes to bring the workforce up to total efficiency, albeit from home.

If we have learned anything from the lockdown phase of the pandemic, it is that businesses must reconstruct how they do their work. As a result of the lockdowns, many business owners have adapted quite successfully and responded to the change, carrying on business effectively and collaborating remotely better than they might have expected. Unfortunately, those who have failed to adapt have either gone out of business or are suffering in their business.

Successful business leaders communicate with their employees to better adapt to change by identifying the daily business unit’s processes and then redefining them to better amalgamate with broad changes across an organization. They consider each business unit independently, focusing on geography, function, and cost, and then examine each independent role for adaptation and emergence in the business as a whole under new and improved functionality. For example, adapting to the work at home model may still require that units meet physically for marching orders and planning and then carry out the execution remotely. Still, technology is proving to be more resourceful under the circumstances, and business leaders are adopting these technologies to limit the amount of time necessary in the office.

“A new process may include a period of asynchronous brainstorming on a digital channel and incorporating ideas from across the organization, followed by a multi-hour period of debate and refinement on an open videoconference.”

The process of reconstructing processes and practices should be ongoing already; however, the new precedent has forced these adaptations, and business owners must be careful to resist the temptation to revert to measures in place before the pandemic. Instead, business owners must embrace new technologies and solutions that are applicable now in a post-pandemic digital age.

To this end, equipping the workforce will begin with determining whether or not you bring the work to your employees or if you bring your employees to work. Some considerations include whether all or some of your employees will be fully remote, which carries with it a net positive value-creating outcome, or perhaps even hybrid-remote, which has net neutral results. For these options, upskilling is essential, but talent sourcing broadens as the geographical constraints become irrelevant. Another option is hybrid-remote with exceptions, a net negative effect unless done remotely when necessary. Finally, you may have critical employees where on-site work is essential, in which case, these employees are not eligible for remote work. In addition, other incentives may be considered to promote a sense of fairness amongst the ranks concerning their disposition. To equip workers that do not fall under the purview of remote work, specific organizational priorities must be considered. When we think of the office, we think of meeting rooms, cubicles, the water cooler, and other office amenities. Many offices support moments of collaboration rather than individual work by design.

“Corporate culture, the boundaries between being physically in the office and out of the office must collapse. For example, in-office video conferencing can no longer involve a group of people staring at one another around a table. In contrast, others watch from a screen on the side, without participating effectively. Always-on videoconferencing, seamless in-person and remote collaboration spaces (such as virtual whiteboards), and asynchronous collaboration and working models will quickly shift from futuristic ideas to standard practice.”

Adapting to the work-from-home model allows business owners to resize their footprint creatively as the need to reinvent offices becomes necessary. With more and more offices becoming obsolete, business owners must re-evaluate their spaces and determine how much space is actually required.

“In any case, the coming transformation will use a portfolio of space solutions: owned space, standard leases, flexible leases, flex space, co-working space, and remote work. Before the crisis, flexible space solutions held about 3 percent of the US office market. However, their share had been growing at 25 percent annually for the past five years, so flexibility was already in the works.”

Research indicates an expected decline in the percentage of time employees will work at central and satellite offices at 12–9%, while flex space and work at home will increase 27%. As a result, business owners can expect these changes to improve how businesses operate and lower operating costs and overhead overall in savings on rent, capital costs, facilities operations, maintenance, and management, to the tune of 10–20% for personnel-driven expenditures. Of course, given time and competition, we should see real estate prices become more competitive and alluring as workers move away from offices in droves. It will be interesting to see what happens with shared offices and flex-space-based businesses that rent office space and shared amenities.

“The value at stake is significant. Over time, some organizations could reduce their real-estate costs by 30 percent. Those that shift to a fully virtual model could almost eliminate them. Both could also increase their organizational resilience and reduce their level of risk by having employees work in many different locations.”

In summation, the research available seems to be trending in favor of an irreversible trend to unshackle employees from the office and the commute in favor of more productivity and lower operational costs. As business owners weigh the impact of these changes and develop new and improved ways to foster their culture, they will find a renewed momentum that has the potential of catapulting organizations into a more productive and efficient era of success. Regardless, the result will provide companies with what they have always really wanted; a safe, enjoyable environment where collaboration is intact and improved so that the company can meet and exceed its objectives.

McKinsey Research