Before the pandemic hit Los Angeles, ChowNow Inc.’s workforce of about 200 was split between Playa Vista and Kansas City, Mo., with almost everyone clocking in daily at either office location. The exceptions were the online ordering platform’s menu specialists and outside sales representatives who were allowed to work remotely. “As a company culture, we weren’t all that open to the idea of it,” said Kristine Minter,company’s director of human resources. But by March 2020, as the state’s lockdown orders took effect, ChowNow told its employees to work from home. Even as its workforce grew to 560 with the proliferation of online food ordering and delivery, the company’s remote model appeared to hold water. “We pretty much doubled in size, and we were just as, if not more, productive than we were before,” Minter said. Once the CDC’s Covid-related restrictions eased, the executive team contemplated returning to the office, but an employee survey showed that only a small percentage of workers wanted to come to the office three or more days a week.
City National Bank moved 85% of its staff to working remotely.
“It was really going to be hard — after one of our most productive years, how do we justify saying, ‘No, you have to come into the office full time,’” she said. “And then on top of that, while we were expanding, we started hiring in a lot of different locations.The talent pool opened for us, and we were able to hire talent that we weren’t able to tap previously. And so, it was like, okay well, people in those states, they obviously can’t come in to work. So, how do we make certain people come in and others not? It just wasn’t going to make sense.” ChowNow is among a growing number of local companies that are adopting 100% remote or virtual-first models as the pandemic wanes, so their employees can choose to live and work anywhere in the United States. The shift appears well received by both current and prospective workers.
“The pandemic has really forced people to evaluate their priorities, (and they) want that flexibility to balance both their work and an increasingly complex, in some cases, home life,” said Shannon Sullivan, chief people officer at Dave Inc. in Mid-Wilshire.“So, this virtual-first model really leans into that because what it allows for people to do is really make the choice of where they work.” Dave, a fintech company, in June said it plans to go public through a merger with a Chicago-based special purpose acquisition company at a $4 billion valuation. It has 170 employees and is looking to hire another 101 by year’s end, just in time for the completion of its new headquarters in the Pacific Design Center. Another office in San Francisco is also in the works. “Even if you’re in those cities, you still get to make the choice of whether you come into an office and at what frequency or not,” Sullivan said. “We get the best of both worlds — to double down in a city that we are proud of and we want to continue to support, and also open ourselves up to talent that brings diversity of perspective, background, and thought that we might not get if we followed our plan we had prior to the pandemic.” Other local companies that have implemented a similar strategy include Downtown-based City National Bank, which moved more than 85% of its employees to working remotely; Santa Monica-based social media giant Snap Inc., which has more than 3,200 employees that now can choose to work from home instead of returning to office in September; and Thousand Oaks-based pharmaceuticals company Amgen Inc., which has 24,000 employees globally, most of whom will continue working remotely. The lot also includes MatchCraft, a marketing technology company that abandoned its 20,000-square-foot headquarters in Santa Monica in February 2020. MatchCraft employs around 100 full-time, part-time and contract employees in seven countries. “We were 50% remote pre-Covid and had a continuity plan in place,” Chief Executive Sandy Lohr said in an email.“It proved vital in our need to become 100% remote overnight. We made the decision to remain permanently remote and vacated our office space after surveying our employees with the large majority desiring to work 100% remote. For our L.A. team, it is not a surprise that their top reason was to forgo their long and frustrating commutes.”
Maintaining productivityThe shift to remote work is not without challenges, including concern about a potential loss of productivity.“Any business contemplating a virtual workplace should make sure they have a culture of trust in parallel with accountability to make sure they are not supporting a shorter work week,” Lohr wrote.“A business needs to be certain they have a clear communication plan and likely needs to invest in technology tools to support their communication.” Sullivan looks at the trust issue as a two-way street. “Employees want an equal exchange of trust — that they trust their company and that the company trusts them,” she said. “When organizations are too rigid, or they’re focused on face time and your value is not through your output but rather through showing up at an office and that face time — that is in conflict with trust.” Most companies had not been ready to say to their employees, “I trust you’re getting the job done when I can’t see you,” Sullivan said. The pandemic forced them to reconcile with that, and the shift “allowed employees (to) really step up and say, ‘Let me show you, let me prove it to you that I can do this job without having to be physically present.’ And I can only speak right now for our workforce, and I feel like our workforce really did that.”
The issue seems to be prevalent among small businesses, according to Digital.com’s poll of some 1,500 entrepreneurs nationwide, 45% of whom expressed concerns about a decline in employee productivity while working remotely. The survey also showed that four out of 10 small employers said they will fire workers who won’t return to the workplace full-time. That mindset is diminishing small businesses’ chances of competing with the “big guys,” who can “pay more, give more benefits, and have the brand,” according to Dennis Consorte, startup and small business consultant. He also suggested a workaround. “If a company is fearful of this new model, which is inevitable, and it’s the direction that the world is moving in, they should start thinking about systems they can put in place to make sure that the workflow matches their expectations,”Consorte said. “It can be as simple as setting up a standing meeting once a day for 15 minutes where everybody logs into Zoom, or hops on a conference call or something, just to talk about the work that they did in the previous day what they’re going to do in the next day or two, and if there’s anything that’s blocking their progress,” he added. “That simple 15-minute standing meeting is enough to give people structure so that they can stay focused on their goals and so that you can align on expectations.” While some fret over productivity, Minter is worried about burnout and making sure ChowNow’s employees remember the worklife balance they were after. “When you work remotely, since your workstation is in your living room or just in the other room, there’s always one more email, one more Slack, one more response, and you find that you’ve worked into the night,” she said. “And just from a safety standpoint, employees might want to work from their couch or from a (kitchen) bar stool or something.” “When you’re in the office, you have the advantage of making sure your employees’ workstations are ergonomically safe. We offer stipend and reimbursements to make sure (employees have a similar set up at home). But it’s always ‘I’m just working on the couch for a couple of minutes,’ and now your back is hurting,” she added.
Small businesses adapt
Compensation questionsEmployers are also contending with compensation issues as different markets command different rates. ChowNow has defined three regions and is adjusting the pay scale based on where employees reside. Dave is taking a different approach and is compensating everyone according to California labor rates. “For us, regardless of where someone chooses to live, their time and effort that we pay them for should be based on the job they’re doing, not necessarily where they live,” Sullivan said. “If you are a software developer in L.A., and one day you decide to pick up and move to Minnesota because your family’s there and you want help with childcare … you’re still doing the same job, contributing at the same level and having hopefully the same impact and results that you did if you were in L.A. We’re committed to your pay, mirroring your contributions and impact and not (basing it) on geography.” Then there’s also the struggle to maintain the company culture and connection in a virtual-first environment where everyone’s dispersed across the country. Some companies have committed to bringing the entire team together at a physical location at least once a year while others like Dave are investing in training their managers to be the “sticky glue that really helps the folks that report to them feel that connection with their peers and with the broader organization,” Sullivan said. With time, these and other issues related to remote work are bound to work themselves out. In the meantime, she suggested, be flexible. “So much of this model is figuring it out as you go and being very open to piloting and be open to feedback,” Sullivan said. “Every quarter we … send out surveys (to our employees) to understand what’s working and what’s not, and we ask very specific questions now related to our virtual-first model so that if there is an issue or we’re not meeting one of our success metrics, we know that soon and so we can pivot on that.”
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