The Hidden Cost of Remote Work – Moshe Vaknin

The major challenges facing companies around interaction and innovation while working from home are just the tip of the iceberg.

Remote work technologies powering the new ways in which we work have undoubtedly been among the biggest winners in the age of Covid-19. Many have lauded the hallmarks of the work from home (WFH) phenomenon citing increased productivity, performance and work/life balance. Yet,  there remains a hidden cost to remote work.  The long term consequences of these costs could be significant and so they need to be studied more closely to understand WFH’s impact on business beyond the pandemic. 

At the height of the Covid restrictions during the spring, 51% of the American workforce reported working from home.  Come this winter it’s entirely possible we’ll be reaching those numbers again.  Clearly, WFH is having a moment. What’s less clear, however, is what’s being lost due to this shift towards remote work as –  in many instances  – it remains stubbornly difficult to quantify. For example,  face-to-face, or, impromptu communication amongst teams have been all but lost over the last 6 months. 

While remote work technologies have been amazing at allowing us to weather the pandemic , we seem to forget how even traveling from office to office within a given company or organization can bring with it a unique type of information flow as a result of these interactions.  It’s this kind of subtle movement of information that gets lost in remote work environments.  We forget that those accidental  chats that happen in the kitchen or the unplanned conversation right before a meeting tend to lead to a greater degree of preparedness and an increased level of synchronization around ideas and strategies. That critical, personal level of work communication is missing right now.  That’s crucial for big and small companies, alike, particularly for those that rely on interaction to build new ideas and innovate. 

For growth companies, the challenges around WFH extend beyond internal communications. Often growth companies rely heavily on vendors and outside partners to make up critical elements within their value chain.  The lack of face-to-face interaction impacts how these parties communicate around rapidly changing product innovations.  This, unfortunately, lends itself to a kind of  inertia, an inclination to stay with the same old product and leave well enough alone.  It damages business, slows growth and decreases the chances taken on new products because “the old way is working fine for now” and communicating change or innovation in a remote environment can be seen as simply too challenging. 

It’s not just vendor relationships that suffer either.  Maintaining and starting new relationships with customers is also severely impacted.  Most industries that involve sales are usually high touch when it comes to generating leads, closing deals, etc. Whether it’s grabbing a coffee or a drink with a potential client or attending industry events for networking, the impact of losing the ability to have that face to face connection would seem, at least intuitively, to be a net negative –  even when you factor in corporate savings around travel and entertainment.  It’s perhaps too early to tell what’s driving sales numbers during the pandemic but it bears paying close attention as companies begin to weigh the costs of remote sales teams and the permanent transformation of the sales funnel.  

WFH won’t just impact high growth companies.  Massive global enterprises like Facebook, Google and Apple will also see an innovation slow down.   Prior to March 2020 one of the amazing benefits of working at an organization like Google was that tunnel of knowledge that was open to any and all employees on site at large corporate HQs.  When innovation occurred, engineers could share updates directly among not only other engineers but also business people who could, in turn, give them “hot” input.  The pandemic has effectively closed this tunnel. Remote communication tools like emails, instant messages or video calls tend to diminish this kind of interaction by their very nature.

Larger enterprises will also be challenged when (if?) the time eventually comes to shift back to traditional forms of work. Smaller companies are necessarily more nimble and should be able to transition back to their offices more easily  whereas behemoths like Microsoft and JP Morgan will find themselves having to navigate the challenges of reintegration made more complex by the lingering after effects of the pandemic.   

For giants like Apple and Google, whose teams will remain remote well into 2021, they may face unexpected attrition rates born out of this adaptation to COVID19.  A recent study which surveyed workers at Amazon, Facebook, Microsoft and Google found that nearly 70% of Silicon Valley workers are feeling burned out from WFH exhaustion.   Employees love working at these places like because they literally love working at these places.  The HQs and remote offices of these giant tech companies are so accommodating and offer so many amazing, ancillary benefits and has such an appeal that often employees will forgo traditional enticements (like a greater salary) because of the on-site perks offered by these uniquely massive enterprises.    

Since lockdowns began happening in Q2 it has staggered the type of innovation that can happen as a result of human interaction.   While WFH has allowed us to optimize remotely and, importantly, keep working, it’s clear that less innovation is occurring both in terms of product and  services.  And that’s just the tip of the iceberg. Reports are also now coming to light uncovering other downsides to WFH. They range from longer hours and more meetings to worsening mental health amongst employees and increases in the gender pay and promotion gap.   

Across the mobile spectrum (with all the various industries and sectors that necessarily includes) I’ve been able to see it first hand.  No doubt there are tangible and measurable benefits when it came to  “going remote.” Ridding ourselves of costly long term leases or saving money on commuting and other expenses such as travel and entertainment have all been significant.  Yet,  there has always been a sense that a deeper price has yet to be paid for these superficial savings.  I fear it’s a cost we’ll be paying for for some time down the road.   As we move forward through this pandemic and hopefully find a resolution in 2021 it will be high time that we all get together again as soon as possible so that we can interact meaningfully and finally bring back the kind of high level innovation born out of actual human interaction.

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