The Reverse Exodus

  2020-06-12
  12 min read

Corona Virus Disease 2019 (COVID-19) prompted businesses to ask their employees to work from home.

Working from home actually looks like a sensible thing to do, even without a pandemic, as it could save businesses millions every year in office space and general office perks. So why wasn’t this started earlier, before COVID-19? Is remote work here to stay? Will it have larger implications?

In this article I'll go over past uncertainties for businesses regarding remote work, show you how pioneers have made working-from-home a reality that makes business and social sense, suggest numbers and actions to help businesses cope better, and finish looking at the inevitable business and social changes that this new reality will bring.

Baseline

Back in 2013, at a time when working remotely was already lauded as “the future”, Yahoo’s new CEO, Marissa Mayer banned working from home. The media covered the event negatively, with Forbes Magazine writing a story titled “Back to the Stone Ages”.

Marissa was motivated by the feedback that distance causes drag in meetings and exchange of ideas.

She wasn't alone in this thinking. As recently as June 2019, Daniel Coyle, New York Times bestselling author of “The Talent Code”, “The Secret Race”, and “The Culture Code: The Secrets of Highly Successful Groups”, discussed the merits of workforce proximity, and its implications in creative work.

In the interview, Daniel states that:

• People are 34× more likely to respond favourably to a request face-to-face vs. e-mail
• For proficient work and productivity, remote work actually works pretty well
• For creative work, proximity promotes 4× more discussions

Marissa was therefore right: there is definite value in face-to-face conversations. But Daniel does not discount the value of remote work though, nor does he state that increased discussions lead to faster or better finds.

Challenges to the Status Quo

Being right isn't an absolute. There are numerous memes on the Internet where two people face each other and look down at a number drawn on the ground. One says “Six!”. The other says “Nine!”. The subtitle reads “Just because you're right, doesn't mean that I'm wrong”.

Many remote work pioneers would have disagreed with Marissa and, to a lesser extent, Daniel. Some have gone all-in on a remote workforce with Twitter, GitLab and Automattic being examples of companies that are all-remote or working towards enabling it. Matt Mullenweg, cofounder of Wordpress and CEO of Automattic says:

You'll probably notice I don't use the word “remote” because it sets up the expectation that there are some people that are essential, some that aren't. I use the word “distributed” to describe what we do, where everyone's on an equal playing field.

(…)

Talent and intelligence are equally distributed throughout the world. But opportunity is not.

Matt was referring to how companies who hire locally for on-premises jobs are limited in the number of possible applicants. Could the many advantages of a distributed work force, as he describes on his video, outweigh the collaboration efficiency of in-person communication?

Businesses often have more than one office location. For those, even before the lockdown, some meetings had to be done remotely anyway. If Marissa were to keep pushing into closer collaboration, should everyone move to a single office, say San Francisco?

As Dave Cheney puts it bluntly on his blog:

The “must be willing to relocate to San Francisco” meme has been doing the rounds on Twitter to great effect. The best jokes have a grain of truth to them. I think it is absurd to expect to draw on an infinite supply of debt burdened twenty somethings to relocate to the hottest real estate market on the planet.

There's a reason why all those office locations exist—proximity to clients and skilled work force being the usual culprits. And there's also a reason why San Francisco has become the IT mecca it is today.

As Eric James puts it in his article Why They Still Are “Willing to Relocate to San Francisco”:

We know the southern shoreline of the peninsula is desirable for tech companies because it historically birthed computing innovations in sprawling low-cost campuses. But most importantly it has concentrated intellectual institutions and venture capital into a self-propagating complex of physical and social networks, which David M. Levinson coined as “plexus.”

Collaboration and the energy derived from working alongside like-minded people is a great motivator. You have fewer detractors and nay-sayers around you. Part of this energy is lost when you have drag trying to talk to the people you need to. Drag because they're too busy, because they're on holiday, because they speak very poor English, or because they're remote: in a different office or working from home. It's this latter cause of drag that decision makers can easily do something about, and they often do, just like Marissa.

In the end, there are advantages to both forms of work and businesses need to consider their culture and situation before planning ahead.

The Harbinger of Change

COVID-19 became the proverbial mother bird who pushed her babies out of the nest to learn to fly. It, more than anyone or anything else, has pushed the world into a large-scale experiment into the merits and flaws of remote working.

People are now comfortable to have video conversations with a background that shows they're at home. On the TV, you see examples of politicians, commentators, late-night show hosts and other professionals participating from home. And they're all just as professional as when they participated from the office (barring a few exceptions). Business is still conducted. The stigma is broken.

Working from home works! It was easy. Why should it ever have been differently?

The truth is it was easy because these are exceptional times.

The evolution of TV and network offerings and our growing dependency on social networks and streaming (read Netflix, HBO, et al.) means most homes in the United States and Europe have a combined service of TV, phone and high-speed Internet. This means that there was no additional cost for Internet access when working from home.

The evolution of the smartphone, tablet and laptop has also come to our aid—all these devices now include a camera, and low-cost (or free) conferencing apps are available even for businesses who didn't use them before. Even your typical social-networking app can be used for this, such as Facebook Messenger, WhatsApp or Apple's Facetime. This means there is no additional cost to enable videoconferencing with your colleagues, even for the smallest businesses.

The evolution of the office collaboration suites allows for business documents to be stored in the cloud (e.g., Dropbox, Microsoft OneDrive, Google Drive, iCloud, et al.) and edited by multiple people at the same time (e.g., Microsoft Office, G Suite, Apple's iWork). This required business investment, but there's a good chance your business may already have subscribed to one of these suites.

And finally, the evolution of digital has made the paperless office a reality. For most home workers, a printer is not a requirement, nor is a Fax machine (who remembers Fax machines anyway?)

COVID-19 may have been the harbinger of change that forced everyone to work from home. But these are exceptional times where our tools and infrastructure at the office and at home align enough to make this transition very easy.

Free Will

You've heard from some colleagues and friends how it’s hard to work from home in their situation. Those who are clear extroverts are eager to get back to the office for obvious reasons. But it’s those with young children that suffer the most, as their parental responsibilities know no schedule.

People were forced into remote work. What will happen once they have the choice to work from home or come back to the office? How many will prefer to keep working from home vs. return to the office?

Under COVID lockdown, all businesses who could send people to work from home would have done do so. This means that the number of workers now working remotely represent the technical maximum number of those who can work from home. In the USA, the May 2020 edition of the CNBC|SurveyMonkey Workforce Happiness Index report showed just under half (48%) of all workers are now in that situation. European Union's Living, working and COVID-19 data states that 16.8% were already working remotely before the outbreak and now over a third (36.8%) are starting to, for a total of just over half (53.6%) of all workers. The technical maximum is therefore around half of the work force.

And how many of those will want to keep working from home once the outbreak subsides?

Asking current US remote workers “Thinking ahead to when things are safe again, how often do you think you will want to work from home?”, an amazing 57% responded they would either want to work from home all the time, or at least more often than they used to. Only 18% responded they would want to work from home less often than they used to, or never. For your business, this means that after lockdown you could be looking at providing work from home capability for about 27% (¼ to ⅓) of your workforce. As this is a poll of preferences, real numbers may be still skewed by company sector and policies.

However, the real benefits of remote work will only be realised after people are given free will and allowed back into the offices. Nicholas Bloom did a scientific study on the benefits of working from home, where this critical element became clear. He explains how a Chinese company setup an experiment where a random selection of half of its workforce would work from home while the other half would keep working at the office. Both sets of workers were tracked over a period of two years. Nicholas reports their findings at the end of that period:

We found massive improvement in performances. A 13% improvement in performances from people working at home. Which is huge, almost 1 day a week.

(…)

At the end of the experiment, (…) [they rolled-out] to the whole company. And they let everyone change their mind.

(…)

What you saw at the end is performance goes up by 24% because basically the only people that are left [at home] (…) are the people that can concentrate. Choice in combination with working from home is just hugely impactful.

Nicholas main findings are very powerful:

• Performance improved by 24%
  1. People working from home worked their full shift
  2. It's far easier to concentrate at home
• Quit rates dropped by 50%
• Office space requirements (and costs) dropped

There is momentum in Silicon Valley towards letting people work from home all they want. Some companies already do so, as we've seen previously. This lockdown is poised to be a pivotal event that will change the culture and the way businesses cope with remote work.

The Reverse Exodus

Remote working is headed to become vastly more commonplace. And people who can now start enjoying this perk will start optimising and adapting.

They will need a proper home office. Their children’s rooms, if the children are away for most of the day at school, may be the perfect place for dual-purpose furniture that shape-shifts that room into an office. But that is not ideal. So, they'll need bigger homes, to account for office space. Bigger homes are expensive, but if you're remote, why do you need to live at the heart of an (expensive) big city? Homes are cheaper in smaller cities, life has less of a rush feeling to it, there is less noise, less stressful car traffic, less pollution. If your Internet connection is just as good in a country house... why not move?

Data seems to confirm this trend. Harris Poll showed that city dwellers (43%) were twice as likely than suburban (26%) and rural (21%) dwellers to have recently browsed a real estate website for homes and apartments to rent or buy. We may find that in the next years we'll see a reverse exodus away from the cities.

This could be a boom for smaller cities and towns that will see renewed growth. Wealth will spread more evenly across a country and there will be fewer divides between the countryside and the city—with improved health care, education and entertainment to service the growing population in the long run.

The Domino Effect

The lockdown led to massive working-from-home, which may lead to a new acceptance of remote work and a reverse exodus away from cities. But there's more.

Standard job perks will have to include work-from-home days. Let's face it: if working from home becomes commonplace, your business will need to offer that as part of the perks in order to attract talent.

Pollution will subside. We've seen this happening in March and April with scientific articles citing data from NASA and ESA indicating pollution levels dropping by as much as 30% in some of the cities most affected by the pandemic. As the lockdown is ended, pollution will rise again, but if remote work becomes commonplace, it should not rise back to the levels it was before, as there will be a drop in commutes.

Business travel will subside. If you are able to do your business remotely during the lockdown and still trust the people on the other side, why shouldn’t you be able to keep doing this after the lockdown ends? Why shouldn’t you be able to do it with the next new customer or business partner? This can save a significant amount in business travel which will negatively impact the rail and airline industries.

Commuting will subside. As people move less, public transportation, taxis, Ubers, et al., that people use to commute may see their income permanently reduced. But in the car industry, both sales and rentals may rise. As people move to the suburbs and countryside, they will commute less often, but have fewer chances of using public transportation when they do need to move—to visit family, to travel. If you live in a city, you may be able to not own a car—which is true in New York and most European cities—but as you move away from cities owning a car becomes a necessity.

Office space requirements will be reduced. You can save in office space if you don’t need to have everyone at the office at the same time. This is a more complex issue, though. You must have (at least) a few “hot seats” that anyone can use if they occasionally go to the office to work. But teams may prefer to work close together, which would mean still having the full seat capacity for the entire workforce. As each business addresses these issues, their mileage will vary.

Business Uncertainty

In the end, all we really know is how much we don't know about how all this will pan out. Even if remote work becomes commonplace, how people feel and how that feeling will evolve over the next months and years will dictate the long-term reality.

Why would it take months or years? Because people will try different ways of combining working from home and at the office. Those eager to come back to the office may find they miss the extra time they had with their children. Those eager to stay at home may find they feel left out of lunches and conversations as (some of) their colleagues come back to the office. Those eager to combine both may find themselves going over the costs of each trip to the office and wondering if it's worth it. Many will need to make home adjustments (such as buying a new home) to be able to have a proper home office, and that takes time. As people try out new ways of working, new feelings and understandings will surface, and they will change their minds—until something clicks and life feels in order again. This will take time for trial and error.

How can business cope and make decisions with such uncertainty?

Because this uncertainty is greatly due to people's feelings, one obvious advice to the business is to gather regular feedback. “Where do you prefer to work in the near future?” “Would you prefer a mix of home/office work?” “Would you prefer fixed days or random days?” And, most of all, “It's ok if you don't know now” and “It's ok if you change your opinion”. “Let's give a try and we'll see how it goes.” Remember: if from the business point of view working from home has been working so far, and you already know that working from the office also did, then either, in whichever combination, will also be fine.

This Too Shall Pass

Eventually there will be effective treatments and/or vaccines for COVID-19. In the end, even if remote work becomes more prevalent and our society evolves as a result, the big rocks in our lives will remain the same. Our children will need our parental guidance. Our family and friends will welcome our company. We will still have hobbies and seek other interests.

In the end, this too shall pass.