Even as Covid cases in Los Angeles dwindle, working from home continues to prove to be successful for many technology companies.
Whether this new workplace culture is studied before, during or after the pandemic, one thing is for certain – remote work is here to stay.
Nicholas Bloom, an economics professor at Stanford, has been studying remote work since 2004, years before the pandemic pushed companies to resort to and embrace virtual workspaces. Prior to the pandemic, 5% of full days were worked from home, and last month, that number had spiked to 30%.
According to Bloom, the hybrid workspace is becoming more dominant because it has four main benefits: employees are happier, productivity is increased, it supports diversity, equity and inclusion, and (for some) it saves a company from having to invest in and pay for more space. These and other reasons have spurred businesses to continue allowing hybrid work, and some have gone fully remote.
Bloom said working from home typically increases productivity by 3% to 5%, mainly because the time that workers are not spending commuting is being used to work more. In addition, the average employee is able to be more focused in the quiet of their homes.
“Fully remote has two major upsides, which are that you can save on office costs, which are about 20% to 30% of wages, and you can hire globally,” said Bloom in an email. “The big downsides are it is harder to mentor; it is harder to build culture, and innovation can be impeded. As a result, while it is obvious for firms that hybrid beats in-person for professionals and managers, it is less clear that fully remote beats hybrid.”
Bloom added that though hybrid work is already the norm, the tech industry is unique in being focused on operating fully remote.
One size doesn’t fit all
Founded in 2015, Sure is a tech company headquartered in Santa Monica that unites core insurance technologies, like policy details and claim management, in a single platform for digital insurance programs for brands and carriers. The business has been a “remote-first” company since before the pandemic, said cheif executive Wayne Slavin.
“Remote has always been a pretty natural fit for tech work … A lot of the collaboration tools that have been developed and rolled out over the last several years, even before Covid, were really enabling that, everything from Zoom, Slack, but even some other meaningful collaboration tools around designing software and project management tools. They don’t have to be on sticky notes on the wall anymore,” Slavin said.
Slavin was quick to concede, however, that remote work impedes the face-to-face connections that are important to building trust between team members.
“In those scenarios, we highly encourage people to get together face to face from time to time and not necessarily do work, but just hang out, socialize and form those bonds,” Slavin continued. “But in terms of productivity, we’re very pleased with how remote work has gone for our team, and I think it reflects in the business results and our customer satisfaction rate.”
EPAM Systems, on the other hand, wanted the best of both worlds, so the company’s employees have the flexibility of working from home or at the company’s Brentwood offices.
Larry Solomon, senior vice president and chief people officer at EPAM, said, “I think we pivoted fairly quickly and fairly decisively once Covid started. But even before that, we’ve always maintained quite a flexible model here; flexibility in where and how people work is one of the most important things that we can offer to our people.”
Solomon added that “people like choice.”
“I think today’s worker doesn’t appreciate top-down mandates very much,” he said.
The price of WFH
Matthew Kahn, an economics professor at the University of Southern California, said remote work, like anything else, comes with separate costs, such as a need for more space at home and a spike in electricity bills.
Kahn added that there is also a generational divide between older and younger employees when it comes to virtual workplaces. On the one hand, older employees who are more established in their careers are content with working from home because they can do their jobs while taking care of personal matters. On the other hand, younger employees want to be back in an office where they can make connections and receive mentorship in their fields.
“For established middle-aged people, we can do our business on Zoom because we already have our networks. For young people, who are trying to network, trying to find their niche, work from home is not for them,” Kahn said.
A positive outcome of remote workforces, according to Kahn, is that technology companies have access to a wider, more diverse pool of talent.
“Before the Covid crisis, it was obvious that tech companies were going to Silicon Valley,” Kahn said. “What was unfair about that old model of entrepreneurship is that cities like Baltimore did not attract enough of these startups. They were all going to San Francisco, driving up home prices and increasing traffic congestion in Silicon Valley … and in such cities that have a large African American population, African Americans were not sufficiently getting into tech because they’d have to move to Seattle or Silicon Valley or Boston to get into tech.”
The pros and cons that both Bloom and Kahn have found in their research are what drives tech companies to decide whether fully remote or hybrid work is for them; however, virtual workspaces will not be widely used in other sectors, according to Kahn.
“Can work-from-home penetrate fields that we’re currently not seeing? What’s crucial here is it will not penetrate in areas where face-to-face continues to be crucial, like a dentist or like installing solar panels,” Kahn said. “I don’t see how you do that from home.”
