I listened to a talk radio program recently about new wrinkles affecting work from home programs. As someone who has engaged in lengthy WFH stints (several years each), and was both a WFH subordinate and a people manager of WFHers, I listened to the dialogue with great interest. The central question of the show was, “Would you accept a 10% reduction in pay to work from home?” The answer to that question should almost always be ‘no.’
There is very little justification for such a request other than the psychology of ‘we (the company) do for you (the employee), so you should do for us (i.e. accept less money.)’ It has an emotional tug that appeals to the innate human inclination toward reciprocity but that pitch proves to be entirely unjustified upon any further examination.
Even though it is becoming more common, WFH is not a panacea. The first company which allowed me the work from home is still going strong. The multinational tech giant to which I moved is no longer around. However, its demise had nothing to do with WFH employees, even though it had one of the most extensive WFH programs. Marissa Mayer, quite publicly, curbed WFH when she took over Yahoo and the company’s condition can quite righty be seen as worse now than it was before. Curbing WFH also raised the ire of many Yahooers, who saw it as a way of life in their company.
WFH will not make or break a company. It a tool to be used for improving employees’ quality of life. As the evidence shows, the powerful derivative benefit of improved employee morale is almost always a significant and sustained bump in employee productivity. One authoritative study stated that “Indeed, it is difficult to find published materials that indicate telecommuting does not generate productivity gains, or that gains are less than 10%.”
There are certain jobs—increasingly, fewer of them—where people must always be in an office. There are also circumstances where companies need to cut costs. However, doing so should be independent of employees’ WFH status. Let us focus on an otherwise healthy company that makes a decision to move its people into a remote work arrangement.
Here is a summary take on the monetary and qualitative issues, presented in tabular form. I discuss each point later, and wrap up with an assessment of the role of pay and personality to the overall picture.
More time for work: The reality is that WFH employees tend to fall into an efficient ‘out of bed – coffee maker -home office’ routine. Home chores get squeezed in as ‘stretch activities.’ That serves to further lengthen the employee’s working day, since the house work is already done. As a result, WFH employees spend more time ‘at work.’
Personal time gained: This is paradoxical since most of the time saved goes right back into work. However, the employee’s lack of commute stress, and very importantly, high value gains like being able to send children off in the morning and welcome them home, plus being there for those errant days when a child is ill or forgot something, generate very high emotional satisfaction, and magnify the perception of time gained.
Improved quality of work: this is a derivative and data-substantiated benefit. The combination of more time, lower personal stress, and higher employee satisfaction, underpinned by innate appreciation for ‘having a good thing and not wanting to lose it, plus the psychology or not wanting anyone to believe you’re slacking off all combine to drive high employee conscientiousness and improved results.
Lower Real Estate costs: this is self-explanatory. Even with moteling (shared work spaces for occasional employee visits,) the business can shave considerable space. Additionally, WFH drives more offices to become paper free, and that creates less need for ancillary spaces.
Reduced cost for commuting: Hard to argue with paying less gas. This reduction in cost is only partly true for employees who are road warriors. Unless the employee has a company car, the overall wear and tear on that person’s vehicle will exceed the mileage compensation. Has anyone ever done a rigorous comparison of mileage rebates vs. vehicle maintenance cost?
Cost increase of remote space: Although the employee may receive a ‘conversion allowance’ to set up the home work space, and may also be able to claim some tax benefit, use of that space is foregone. It now, temporarily, ‘belongs’ to the company. An additional and hidden consideration is that the employee is now liable, under company rules, for company content at home. Now you can be fired for not protecting the company’s stuff in your own house. By any measure, that is a cost. (re 1)
Cost increase for technology: In most cases the move to remote work simplifies a company’s infrastructure. The dense and sophisticated network-centric offices, can be moved without too much difficulty and with almost no compromise, to the cloud. The CIA uses the cloud today; security is hardly an issue anymore. Most people already have Internet connections so the company rides that free—sometimes, an allowance for monthly fees partly compensates. Additionally, the WFH arrangements takes its toll on IT staff (reductions,) and companies are able to outsource large parts of their networking. Reduced headcount and the shift of a greater share of technology costs from delayed depreciation to a pure expense model, yields substantial cost and related tax gains. (re 2)
Reduced ‘visibility’: A WFH employee must work harder to retain ‘top of mind’ standing within the organization. ‘Out of sight and out of mind’ is ever more true in the increasingly torrid world of business, where there is always more work than everyone can do. You are no longer able to pick up on a boss’ physical cues and jump in to help in a pinch. Now you have to ask, and do so at the right time; it may be awkward for a boss to admit the need publicly. So new skills come into play—who is helping the employee to adapt? Also, to help the boss, he or she often has to do something. You can no longer just grab the file and go. With electronic safeguards in place, more often than not, someone has to make time—even when too harried—to let you help them. Because the WFH employee has to over-deliver, consistently, in the absence of face time, to remain an elite player, the model holds significant long-term implications for promotability, career success, and life-time earning power.
Management control: Well set up programs actually promote greater autonomy and accountability, which are productivity boosters. As some companies already know, flattening the management hierarchy and moving decisions to the front line yields all sorts of company gains, such as faster work response, better customer service, higher employee satisfaction, etc. WFH programs force companies to do what’s good for them—if they implement WFH programs well!
The bigger and often unexpressed concern for companies, which clouds and distorts WFH decisions, boils down to two words: employee conscientiousness. Can the employee be trusted to deliver a fair day’s work in a remote work setting? For a not insignificant number of employees, the simple answer is no! The truth is that such employees, in all likelihood, are showing the signs even in an office setting! That is not a WFH challenge, it is a workforce quality problem. This issue affects but is independent of WFH adoption, and should always be addressed once the problem is evident. Implementing a WFH program is as good a time as any to address it. (re 3)
Talent choice: In the increasingly competitive business environment, more companies want to raise their profiles and go from local to regional, regional to national, or national to global. To achieve that they need access to the best talent. Now that it is no longer necessary to dislocate one’s self and family from a desirable and established community life, top talent stays put and the company comes to them, electronically. In the process, companies are becoming less site-centric, by default. WFH is a natural fit with the pattern that the companies are imposing on themselves. (re 4)
Summarizing the gains in the table shows that in the first group of three factors, the employee time gained versus time applied to work can be considered a wash. The other three ‘yesses’ are in the company’s favour—including the employee ‘yes’ for improved productivity. Second, regarding Real estate vs. commuting costs, that too is a wash—employee and company both gain something. Even on relative terms, the company typically gains more. Third, the establishment of a remote workspace is actually more onerous on the employee than it is on the company. Overall, the cost and productivity factors work out to be in the company’s favour, and the data bears this out. As such, it is irrational, even unfair, to ask employees to accept less money, for what helps the company to gain money.
The ‘WFH as a gift’ mindset misses the point that today’s companies are more mobile and distributed by default. That shift has eroded the importance of the traditional office but it remains far from irrelevant. However, looking at ‘unused’ office space as a basis for decision making is applying an outdated and cost-obsessed mental model to the new world of work. Increasing disuse of the office does not reflect a reduction in the value of the worker but instead, quite the opposite. Why pay a worker less for operating at the expected level and being effective in the new model, as or she should be?
Save on costs and save on payroll too, haven’t we all been taught that double-dipping is not good manners.