Work-from-home model cracks becoming clearer: Colliers
As the pandemic has unfolded, so much has been written that the office is now superfluous to needs.
We can all take our laptops and move to our dining table and not see a drop in productivity.
And this was the case in the early part of the pandemic, because we had no other choice.
Many were concerned about job security and therefore worked twice as hard and most likely longer hours to make up for the crisis.
This has played out in productivity (hours worked to GDP) which increased to 3.1 percent in June quarter, which is above productivity recorded in the March quarter of 0.6 percent.
As the pandemic has dragged on however, we have started to see the cracks which are now forming chasms in the work-from-home model.
Less communication
Initially we were ‘all in this together’, but as businesses have started to return to the office it is likely there is less communication with those that are still working from home.
Project timelines are starting to slip, teams are finding it more challenging to work together, we are all ‘zoomed out’ and managers are finding it increasingly difficult to manage staff in hundreds of locations.
It therefore seems counter intuitive that we are still hearing and reading that work-from-home is the replacement for office when the solution to the current pain points is the need to return to the office.
Then the obvious question is, why are we so confident that office still has a strong place in service-based industries?
It comes down to connection.
Connection is something that we are hard wired for, we crave and need to be healthy functioning humans.
Drawing from management theory Maslow’s hierarchy of needs – after physiological needs comes safety which includes employment and then love and belonging.
Work has a very large role to play in both needs.
Human face-to-face contact is paramount to building trust and connection.
The pandemic has brought forward the technology integration allowing businesses more streamlined remote working through programs such as Zoom and Teams.
However, they don’t provide connection, there is a difference (item continues below).
Connection is a deep understanding and trust of others which can’t be replicated on Zoom/Teams or over the phone or via email.
Connection to our workplace, having purpose and connection to our colleagues and clients/customers is critical for service-based businesses. Connection builds trust and is the foundation of great teams.
Collaboration, creativity and culture
Once trust is built, we see three key elements which are required for business to thrive.
These are collaboration, creativity and culture.
All of these require having a connection and trust and if you have all three elements then a high functioning team is created.
With these three elements working together this leads to innovation and long-term productivity for a company.
So why have we not seen a significant drop off in productivity during the crisis?
We would argue that this is because we are leveraging our previous connections to clients and colleagues to be able to get close to maintaining productivity.
Where we start to see the cracks, is when we are required to create new connections, train new staff or not leverage the serendipitous conversation in the kitchen with Tom from Finance that has helped you find the solution you have been searching for.
These just can’t happen while we are all sitting in our tracksuit pants and business shirts at our dining tables on Zoom.
Cost saving eclipsed by connection, productivity loss
We have seen numerous examples of large global corporations’ trial work from home.
IBM, Aetna, Best Buy, Bank of America, Yahoo, AT&T and Reddit have all attempted this over the last couple of decades and all have realised that the small costs that they saved in rent was well and truly eclipsed by the loss in productivity due to the loss of connection.
This crisis is likely to result in more flexibility in the hours we work in the office, once the health crisis has past, and we will see that companies who return their staff to the office are likely to have a competitive edge.
While we might have the tech platforms that support us to work from home, we see that unless you invest time in face to face contact with clients and colleagues it will undermine the long-term productivity and viability of businesses.
Kate Gray is Colliers Research director. This post appears on the agency’s blog page.
