Is the Workplace of the Future Remote, Hybrid or Distributed? Actually, It's All of The Above. Welcome to the Age of The Agile Workplace.
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As the pandemic subsides, many executives and employees are transitioning to the new normal. Companies that transitioned to a remote environment are now opening their offices again and trying to determine how they will operate. Some businesses, like Airbnb, Salesforce, Meta and Google, have stated they will allow people to remain remote if they choose to, as employers believe it improves their chances at retention and employees have proven they can get the work done.
Others, like Goldman Sachs, JPMorgan Chase and Netflix, are pushing to have all employees back in the office five days a week in the belief that there is no substitute for in-office collaboration and interactions. Other companies are trying to land in the middle. Adobe, Apple, and Citi use a hybrid approach in which employees are generally expected in the office 2-3 days a week.
Several factors suggest the winning strategy won't be forcing one approach but adapting to the needs and desires of the workforce. A more agile strategy toward workplace design, culture and operating models will be required to succeed. To understand why, consider the business realities and opportunities behind a more agile approach.
Why an agile strategy will win
Gallup published a study of more than 8,000 remote-capable workers to learn what they prefer, what they see as the future and what they plan to do if their company changes directions.
Fifty-six percent said their job can be done entirely remotely today, and only 20% said they believe fully on-site will remain a valid strategy, down from 60% in 2019. Only 6% said they want to work entirely on-site. That means 94% of employees surveyed want a more flexible strategy. With more than 70 million workers in the U.S. estimated to be in remote-capable roles, that's a significant number looking for a more flexible strategy.
After two years of the "great work experiment," in which vast portions of the workforce were forced to work from home, we have a lot of information and data. Here's what we've learned:
- Workers are more productive at home: a Stanford University study found that working from home full-time was equivalent to adding a full day of productivity per week.
- Workers are more likely to stay at their employer: the same study indicated turnover decreased by 50% as employees felt more loyal and refreshed because they could be more comfortable at home and spend more time with friends and family.
- It limits wage inflation: a July 2022 study by the National Bureau of Economic Research showed those organizations that expanded work-from-home and remote work opportunities moderated wage inflation by 1% of wages over 12 months on average. The annual Survey of Business Uncertainty found that 55.4% of companies have been able to "restrain wage growth" by employing a flexible work strategy.
- It allows companies to tap into a more global, more diverse workplace: remote teams give employers access to worldwide talent and potentially be "open" to the public around the clock ― the "follow the sun" model, in which work continues in various regions night and day. Groups that have traditionally "fallen" out of the workforce, like women who have kids, can work from home part-time or full-time more easily.
- Employers save money on rent and other facilities costs. A study by Global Workplace Analytics estimates facilities savings could equal $10,000 per year per employee.
So what does an agile work strategy mean and look like?
An agile workplace strategy means an organization is not wedded to traditional 20th-century operating models or organizational structures and is willing and able to adapt flexibly to meet the needs and preferences of its talent. The new models include:
- Fully Distributed Organizations: rather than trying to employ all technology workers in traditional markets (Silicon Valley, Seattle, Los Angeles, etc.), companies will establish hubs all over the world. Top talent can be obtained and retained in lower-cost markets like Eastern Europe, India or Southeast Asia, or even small non-traditional cities in the U.S. like Boise, Idaho.
- Full Remote Organizations: these organizations have removed the requirement to be in an office entirely for nearly every role and now employ a global "work where you are" strategy. Companies like GitLab, with 1,500 employees in more than 65 countries, have gone even further — they have no company-owned offices at all. Dropbox is "virtual first" now and retains 16 studios worldwide, but employees aren't required to come in or be near a location.
How do you make this work strategy work? Four quick tips:
- Change your organization's operating model and structure to allow this environment. For example, Google provides "distributed work playbooks" for leaders, managers, employees and buddies (to help new hires) to help drive how to make the environment work for everyone.
- Set clear expectations: practical goal setting, feedback processes, and regular and effective check-ins and 1:1s between managers and employees to ensure things don't fall through the cracks with a remote, global or hybrid workplace.
- Gather the right tools: effective project management software like Asana, shared document approaches like Google Docs/Sheets/Slides, shared drives like One Drive, and effective real-time collaboration tools like Slack and Zoom for working seamlessly in a (usually) single-sign-on environment.
- Make it an organizational imperative to forge connections, bonds and friendships at work: in an Agile work environment, people will need to find ways to connect as informal in-person mechanisms will be more limited.
How to deploy an agile work strategy is complex, nuanced and challenging, but it will be required to win in the future. The organizations that begin the journey now will be more ready to survive the challenges ahead and capitalize on the opportunities the future will provide.