If you can’t explain it simply, you don’t know it well enough.
– Albert Einstein –
Thinking of the many changes the devastation of the Corona virus has brought us, there is one in particular, that I am quite curious about. Namely the fact, that the whole world is forced to work from home whenever possible. This incredibly huge turn of events is all the more interesting as home office was widely denied before Corona hit us all.
At this point, it is safe to say, that Corona has worn down a lot of the reservations towards home office we faced pre-Corona. We all have gotten great insights by the current home office situation and came to understand how an overall approach works and how it affects the performance of a company and ourselves. The resulting massive global data base we have at our hands, cannot be denied when home office is addressed for the future of work.
At the TIME100 Honorees, Alphabet CEO Sundar Pichai explained that he does not believe that Google will operate 100 % remotely. His vision of the future is a hybrid to preserve a sense of community. On the other, hand Twitter has already announced they allow home office forever.
This brings us to the question of how the future will be shaped in the aftermath of Corona, when working from home becomes a choice we are all allowed to make?
This is a quite complex question that goes far beyond the personal freedom of doing laundry while working. Instead, this might have a huge impact on the global economy and the health of people. It is going to shape plenty of industries and it will definitely transform how the corporate world operates and thinks.
In the following, we are going look into various scenarios, that will provide insights for further discussion and help us to understand how powerful this change is.
– GLOBAL ECONOMICS OF INTERNATIONAL COMPETITION ON THE JOB MARKET
– MODERN LEADERSHIP & A GROWTH MINDSET
– DRESS CODE & CHANGING BEHAVIOR
– WAR FOR TALENTS
– STRESS REDUCTION
– BENEFITS FOR THE COMPANY
– WORKING PART-TIME
– CHANGING INDUSTRIES
– DIGITAL TRANSFORMATION
– CONCLUSION
Home office will lead us to a growing international competition on the job market to a degree we have never experienced before.
When we do not have to be at the office to get our work done, the country where we live in and work from becomes almost irrelevant. With that said, there is a way larger pool of highly qualified resources an employer can recruit from. And it works the other way round: Not only are there be more potential candidates, there are also many more potential companies for those who look for a new job.
When we are looking at the basics of economics, we can anticipate that there will be a change triggered on international competition.
One can imagine that a country with a high average income will recruit preferably resources from countries with a low average income for cost saving effects. In consequence, candidates from countries with a high average income have to adjust their target salary for competitive reasons.
If this comes true, the big questions are:
Will the average income of high average countries decrease followed by all its consequences such as decreasing purchasing power? Will the average income of countries with a low average income increase?
What happens if low average income countries become short of employees and have to recruit employees that claim a higher salary. Will their average income increase or will there be a wave of crashing businesses as they do not find qualified employees suited to their budget to keep the business running?
Those countries, operating a social security system have to consider the effects on health insurance and pension funds in the long run, if the average income changes.
With a certain share of employees working from home or elsewhere, there is no room for outdated, commanding leadership and a fixed mindset, instead new ways of leadership combined with a growth mindset are in order.
While working from home there is a bigger need for self-motivation and self-organization. Both cannot be force by old ways of leadership. In our new situation, leadership has to be more inspirational and motivational then ever before. The modern leader needs to build a team that works and sticks together although they work online.
Now, the leader has to trust the work will be done without much chance to control it, like they did before. Crossing the bridge to trust their employees, when one was used to old ways of leadership, is an extremely hard step to take. Not an impossible one, but one that should definitely be taken seriously and get the attention it needs. It will take up a lot of time and energy to develop these kind of leaders with the right mindset to give their team the freedom and motivation they need.
Be aware that the complete opposite of old ways of leadership, where the boss leaves their team all alone, is also not a solution. The new leader needs to connect and motivate their team, this is not done by being absent.
Some of the reservations towards home office before Corona came from the fear, employees will not work enough at home. Those who will not work at home, will also find a way not work while at the office. If this was the driver of denying home office in the past, the leadership was more tailored to those who hold the company back instead to those who are pushing it forward.
Modern leadership should focus on what people need to be or to become an employee that pushes the company into the right direction. Those are our assets, those are our future, those are worth our time and effort and those are the ones who will benefit the company. When they prefer home office, grant them home office
Leadership with the right mindset and soft skills is crucial in the context of home office, because in the past it was the location that connected people at work, from now on, it is the mindset and the shared passion for our work that connects us while we are working.
Another leadership challenge is to keep the office grapevine running, which usually provides a lot of relevant information and helps us to build relationships.
The way we dress up for work and how it changes when we work from home seems irrelevant at first. What makes it worth to talk about it, is that the clothes we wear alter how we feel about ourselves and how others perceive us.
For simplification, I will stick to the suit instead of mentioning all the other buttoned-down clothes as the suit is the embodiment of the corporate world.
As we express ourselves with the clothes we wear, it affects the way we behave. Putting on a suit can cause a superior feeling towards others. One feels respected in a suit and one is more respected by others in a suit. For some of us, the second we put on our suit, we slip into a role in which the suit gives us the confidence we need.
Likewise, the way we dress up has an impact on how we perceive others. In the context of work, this means a book gets judged by its cover quite often and for sure ‚clothes make the man/woman‘.
Appearance plays a big role in the perception of our qualification. One good example is the well-dressed imposter. They communicate high-level using all the buzzwords and they wear a suit, which leads to the impression they are self-confident, qualified and worth the promotion. The missing value of what they actually said is overridden by their staged professionalism in which the suit is an important stylistic device.
When the suit is taken out of the success-equation, it is not that easy to just blow smoke and be successful anyway. Everyone will have to actually listen to the spoken word and its value. This already happens since we are working from home and it will manifest even more once home office is a free choice.
But what about the office dress code? At home we are dressed mostly casual and our colleagues have all seen us in our comfy hoodie by now. It seems odd that a hoodie is fine when we see each other in a video chat and at the office with the same people, a suit is in order. We should make use of the chance to widen our view and become more tolerant towards casual clothes in the corporate world.
If the attire at the office really loosens up, it might affect the fashion industry as well, as people will buy less suits and buttoned-down clothes and chose casual clothing instead.
Whereas the above mentioned international competition on the job market focuses on global economics this chapter is about the chosen career path of the individual.
‚War for talents‘ is a term that was introduced in 1997 by Steven Hankin from McKinsey & Company to express how incredibly hard it is to find talented people and keep them in the company. If we prefer to chose a career that allows us to work from home, the war for talents will be the next big bad thing for jobs where home office is not possible. This can lead to a serious shortage of employees in these kind of jobs and become critical.
Thinking that jobs where home office is not an option, are not affected by the above mentioned ‚international competition on the job market‘, might be a false conclusion. If the international competition is really changing, we will become more international and familiar with English in our daily lives. This opens doors to look abroad for qualified people to staff these kind of jobs.
By the way, denying home office once we are back to normal, could provoke employees to look elsewhere for new job opportunities that are more suited to their needs.
That stress is detrimental to our health is a well studied fact and it became a ubiquitous, destructive force, many of us have to deal with. We all have tried some way to lessen stress like meditating, taking a step back or engaging in new hobbies. The current situation shows us other ways to manage or prevent stress.
For many of us, the day starts out in hurry in the morning. We get up early and hurry to catch the bus or we become stressed as we are stuck in traffic or we have a ridiculous long way to work. These are just a few examples that are all going away when we can work from home.
Beginning the morning without stress is such a relief and when the way to work is no longer required, we get extra time to have a more balanced live.
And there is another benefit for those among us who are not exactly a morning person, home office works better with our circadian rhythm, when we can sleep a little bit longer.
This suggest the overall physical and mental wellbeing is improved with the choice of home office by reducing stress.
Particularly interesting in this context is the longterm development of burnouts, heart attacks, strokes and other stress related diseases. Will they diminish because people experience less stress?
People call in sick, when they are overwhelmed by the workload. Maybe this will happen less often, given the stress of our daily commute disappears, so we can handle the stress of the workload better. Another frequent reason to call in sick, is the common cold. It is the right thing to do, to protect ourselves and others, of course. Yet, it is a valid assumption that people call in sick less when they work from home. With a slight appearance of the common cold it is exhausting to drive all the way to work whereas being at home in bed going through our work eMails is still fine for some of us.
I heard in my personal network that there is already a decrease in sick notes. However, stress reduction may not be the only reason. The Corona situation puts jobs at risks, so it is just a natural response that people put in a lot of effort to secure their livelihood.
On a side note, working from home is not for everybody a stress relieve. However, having a need-based choice is more likely to have an overall positive impact.
As we know, the connections we have with our loved ones are the most important part in our lives. Several studies reveal they are not only substantial to our mental health, but improve our physical-wellbeing and life expectancy, too.
Imagine the psychological distress that long distance relationships cause. We have to commute regularly long distance which is already stressful as it is and more importantly, we get to see the person we wish to have in our daily life just on the weekend or less. This is emotionally exhausting. Given the choice to work from home, long distance relationships become closer. We can live together in one city although being employed in another.
Another plus side is, we get to spent extra time with our families. How nice it is, to have lunch together every day.
Some of us used come home from work when their little children were already in bed, which can be very frustrating. The new situation allows us to put our kids to bed and wish them goodnight and that is amazing.
This is a challenging one and certainly the opposite of stress reduction. Having our office at home feels like work is always pressing in, especially when there is no extra room to separate our work space from the rest of the house. This may even cause us to work too much.
The benefits for the company are pivotal, to get companies to support home office on their own free will. Many companies would not allow for home office in the past. They where hesitant based on outdated views rather then sufficient experience with employees working from home. Anyway, our new situation provides enough data to make an informed choice. Let us dig a little deeper into benefits that work in favor of the companies we work for.
We already looked into the impact of home office on our health. When we are less sick be it physically or mentally, it gives us a chance to produce additional output at work. This is an improvement of efficiency and an opportunity for the company to grow. Furthermore, the better work-life balance makes our work less error-prone which benefits efficiency as well as the quality of our work.
As company growth depends on many factors and growth may not be achieved in any case, the efficiency improvement requires fewer employees to do the work, which provides an opportunity for cost savings, i.e. less employees.
The buildings providing us with our workspace are a big pool of costs that home office can reduce. Companies that allow us to work from home do not need a desk for every single employe anymore. The reduction in needed space, allows to plan smaller buildings for more employees.
On top of working from home, we may reduce the amount of business travels since everybody we are supposed to meet with, is working from home anyway. The necessity for presence has already changed and will continue to change fundamentally the more we continue to work from home. Over are the time where we fly around the world to have meetings, that could have taken place in an online session just as well.
Before Corona, companies spent a ridiculous amount of money on travel expenses. Now, there is proof, that many of those business trips were not necessary in the first place. There is a big financial saving on a silver platter and one that is easy to measure.
There is a special benefit for those of us who work part time. Here in Germany, working part time is quite common especially when we have kids.
When we look at part-time jobs, we find an opportunity to make a better living, if we work from home. Imagine the following scenario:
We have a way to work that takes about 40 minutes, so we spent 80 minutes a day to get to work and back home. Looking at the time spent for our commute per week, we find over 6 hours (80minutes x 5days) of unpaid time, that could have better spent working from home and getting paid.
Apart from the benefit for the employee this is an advantage in efficiency for the company.
There are countless industries that are affected, reshaped or even built by the new home office situation. I chose the following three because their dynamics are easy to understand, especially in the context of this post.
When the location of our workplace becomes irrelevant, we can work from everywhere. I can only imagine that a lot of us would want to take home office as an opportunity to explore the world. We can work during office hours and do the sight seeing right after work.
Given we would pay less for our stay then what we would get for renting out our apartment via airbnb, we would even make money on the side and further spark up platforms like airbnb. This seems like a benefit for the travel industry.
On the other hand, we talked about the possible decrease in business trips before. Business trips usually do not give much regard to the prices of flights or other transportation. I read on investopedia.com that ‚business travelers account for 12% percent of airlines‘ passengers, but they are typically twice as lucrative – accounting for as much as 75% of profits‘. Therefore, a decrease in business trips will hit the travel industry hard.
The car industry is a very important one since it has a noticable impact on the global economy.
Thinking of how home office is going to affect the car industry, one may expect that there will be a declining need for driving and with that a shrinking demand for cars. But, a study for UK by PWC revealed, that people are likely to move out of the cities when they can work from home as they do not need to live close to their employer anymore.
As the coverage of public transportation is great in the cities, it is usually poor the farther we are away from the city. This prompts an increasing demand for cars as people outside the city heavily rely on their cars.
In areas of high population density the opposite might be true and people demand less cars and rely more on car sharing. This would give the car sharing industry a boost.
Hospitals are always short of health care workers and doctors, at least in Germany they are.
We talked about the stress mitigating effects before. If there is a reduction in stress related diseases as mentioned above, this shortage will become less severe.
On the other hand, hospitals wont provide little to no opportunity to work from home and people might prefer to work in other jobs where home office is possible. This development would intensify the shortage.
Additionally, the pharmacy industry will also experience change.
At home we are in contact with far fewer people. This gives us extra protection from diseases like the common cold. Thus, the demand for cold medicine like nasal spray, bronchial balsam and the like will shrink. In 2008, Kian Fun Chung found that alone the US spends a billion US dollar on these kind of products. A cutback in a market like this, will be noticeable for the economy.
The whole blog post has a lot of speculation in it, but the advances in digital transformation thanks to global home office now and in the future, is a given. This is an endless topic and I do not want to make this about technology, hence the outlook is very basic here.
Especially in the B2B industry, it is important to find new ways how to work with our customers. Their employees work from home and we have to come up with ways to build a relationship and deliver our service online. The direction of reinventing and running the business is clear: Digitalize as much as possible because from now on digitalization provides a competitive advantage. If our clients cannot collaborate with us online, they will turn to a new business partner.
The current home office situation has already proven that the world is in need for a better digital infrastructure and digital workplaces to make home office work. We all have noticed the past few month how much room there is for improvement as we all felt the pain of ‚Can you hear me?‘, ‚Are you muted, I don’t hear you?‘, ‚Hello?, Hello?, Hi?, Hello?‘,…‘.
And this is just a minor issue compared to countries or regions with poor to no internet access. Even in Germany, the rural areas have sometimes very bad internet connection.
The afore mentioned study of PWC analyzes how cities are going to change because of home office and reveals that people move outside the city. The digital infrastructure has to follow this development or even be there first to allow for this change to happen. The Government has to invest a lot of money soon to improve the digital infrastructure that still falls short of expectations.
One need for innovation that we are all familiar with from our daily work live is everything that makes the digital office work, e.g. innovations of better tools for online workshops.
Another innovation we all can relate to, is the doctors consultation which already happens partly online. A next innovative step could be tools that help us to easily examine our health ourselves and post reliable data live to our doctor into our online session. That way doctors have a chance to work from home.
These are just very basic innovations just for illustration and there will be many innovations to make home office happen even for jobs where we cannot imagine home office will ever be possible. Just like operating a whole laboratory remotely. This is possible but not very common.
The massive share of people working from home is a leap forward in efficiency. Such fundamental turn will change whole outlines of a profession, it will wipe out some jobs, it will require the redefinition of existing jobs and will introduce completely new jobs. All that has a growing digital expertise in common. This will lead to a reworked curriculum in schools to impart broad digital knowledge. Furthermore, children will work with iPads and notebooks rather then paper and pen. We already see this happening.
We are going to start into a new digital age where we finally take digitalization to the next level. In this really connected world people will have the freedom to choose to work from home, at the office or someplace else. There will be health improvements which is absolutely amazing and cost saving opportunities for companies. This sounds all great so far, yet, there will be effects on the global economy that require further analysis to understand the consequences and its intensity.
Other than the positive changes that are very welcome, what can be done to prevent the downside?
This post provides possible scenarios that are by far not a complete list, to give a thought-provoking impulse for further discussion.
Now, I am curious about your thoughts.
What do you think is going to change?
What do you hope for?
What does working from home means to you?
Do you think that employers will force us to work from home to some degree or even completely?
Will there be laws to force companies to give their employees the choice to work from home?