COVID-19 has turned the world of work upside down—now’s the time to build better working practices for the next decade and beyond.
If and when vaccines effectively curb the spread of coronavirus, working patterns will surely change again. But rather than just waiting to see what happens, business leaders need to decide now what they want the new world of work to look like for their organizations. The pandemic has given employees an unprecedented opportunity to experience ways of working that are less structured and less limited. Many won’t want to turn back the clock.
Where people work, when they work, and how they work all have huge ramifications for a company’s development of both its physical and human resources, affecting everything from office space to employee development and team building. If companies don’t plan now, they’ll face significant risks as the pandemic subsides.
Chief among these is the danger that some employees continue to work from home while others make a full return to the office, potentially splintering teams and company cohesion. Some employees may seek to physically be in the workplace to build a relationship with their bosses and advance their careers, while others may believe they are more productive at home. If half a team works in the same room while the other half connects solely via video calls, team dynamics are sure to be disrupted.
From a real estate perspective, there’s a clear danger that a business will end up with too much (or too little) capacity, depending on whether it has retained or reduced its office space during the pandemic. If business leaves it up to individual employees to decide when and where to work, it’ll be very difficult for estate managers to ensure there’s enough suitable office space to accommodate seemingly random fluctuations in working patterns.
Where do your priorities lie?
Given these risks, it’s important to plan now for the aftermath of the pandemic. To do that, the senior management team needs to prioritize. Should the priority be making employees happy? If the company’s involved in a talent war this could be very important. Or should the focus be on improving the financial situation of the company, given the way in which the pandemic has ravaged the economy? Or should the company concentrate on making customers happy and winning market share, while rivals flounder? Or a combination of all three?
If used wisely, the current window of opportunity could allow businesses to significantly increase employee satisfaction (in terms of when and where they work), improve the customer experience (through greater agility and better collaboration), and realize significant savings for the organization. If working from home becomes the default, the cost of operating and maintaining facilities will drop, while greater use of remote training and events should improve efficiency. As employees commute less and can work more flexible hours, the business may also be able to spend less on payroll and incentives. Remote working has proved to be efficient during the pandemic and is becoming more broadly accepted by organizations and their leaders.
But working from home isn’t a panacea. Kearney’s experience of supporting clients during 2020, and conducting a comprehensive internal global study, suggests that the upsides of the new working patterns are counterbalanced by various downsides (see figure).
If people spend much of their working life away from the office, a key challenge for CEOs and CHROs will be to give them a sense of belonging and ensure they continue to develop. People who work predominantly from home won’t receive as much informal guidance from colleagues and managers. When everyone’s in the office, problems and solutions are discussed in the cafeteria, in the corridor, or even in a bar after work. It can be hard to replicate that dynamic in a remote working environment.
Companies will also need to consider how many of their staff have enough space at home in which to work effectively. Parents who have to work in their kitchen, for example, could be interrupted by children returning from school or their partner making a meal.
In reality, many businesses are likely to pursue a hybrid model in which about half of employees’ working time is in the office and the other half is at home or elsewhere. It could become customary, for example, to perform tasks that need full concentration at home, while projects that involve a high degree of personal interaction and collaboration might be conducted in offices or other shared working spaces where colleagues can gather together and have access to the necessary amenities. For many service and software companies, the bulk of work may be produced off-site and delivered electronically, blurring the conventional definition of the workplace. Freelancers and contractors from different organizations will work together in ad hoc teams that are assembled and disbanded as required.
Fail to prepare, prepare to fail
For most organizations this will represent a major shift in working patterns, so they need to prepare properly. Now’s the time to review and adjust elements of the operating model to take full advantage of the new ways of working.
The first step is to define the ambition: draw up a people and real-estate strategy that includes targets in terms of where and when staff will work. The allocation of office space should reflect the different needs of different roles and job functions—someone in a back-office position may need less space than a project engineer but more than a salesperson. Whereas some employees may require a dedicated workspace, others may need to book before they visit the office. People performing back-office functions may be able to do most of their work at home, while a software engineer or graphic designer, for example, might need to be in the office to work on specific equipment or collaborate closely with colleagues.
To help clients revamp their working arrangements, Kearney typically develops between five and 10 archetypes of office-based employees who describe where they need to work (home or office?), when (traditional or flexible time model?), and the office layout they require. This analysis is based on an evaluation of how much time each archetype spends on the four Cs—concentration, collaboration, communication, and community. We also help identify the digital collaboration and productivity tools each archetype will need and whether employees have the necessary skills to use these tools effectively.
It may also make sense to provide staff with incentives (and the equipment they need) to work remotely, as the organization could benefit through a reduction in fixed and variable real estate/maintenance costs: tailoring office space to functions should reduce the amount of unutilized capacity and improve efficiency. Although flexible workspace will continue to be important for collaboration between teams, clients, and suppliers, this could be rented from private coworking facilities as the need arises.
Compressing and scattering time
One way to attract better staff and motivate existing staff is to give employees more ownership and control over their work-life balance. For example, allowing for flexible start and finish times will enable individuals to work when they’re most productive, or choose to commute outside peak hours. Some may wish to compress their working week into four days, putting in longer hours each day but gaining one or more extra free days to spend as they please. Others may want to scatter working time, fitting in their hours around childcare or other personal responsibilities. Short sabbaticals could become the norm, giving employees the opportunity to further their interests, such as spending more time with their families, advancing their education, travelling, taking part in charity or sporting events, or developing their entrepreneurial skills. If employees can achieve a better work-life balance, they’re more likely to stay with the organization.
Of course, giving employees flexibility on when they work can’t be allowed to compromise the business. The company will need to design mechanisms that enable compressed and scattered time models and other forms of flexible working, and can be implemented without weakening operating processes. In other words, the organization needs to proactively design rules and conditions, rather than simply allowing flexible working to take place. In practice, this could require a redefinition of roles and responsibilities and management models (for example, span of control) to make the organization more agile. New working models could call for fresh processes, a revamp of cross-functional interaction and collaboration, and even revised customer and employee satisfaction metrics. Indeed, it’ll be vital to ensure that managers throughout the organization are closely involved in designing new working models.
In terms of real estate, there may be a need to create flexible spaces that can be adapted to fit changing requirements, such as seasonal fluctuations or variations in the type of work being done. When people do come into the office, many will be looking for social interaction, so offices could be redesigned to provide space that allows people to meet and collaborate easily.
Finding the right formula
Clearly, there won’t be a one-size-fits-all approach to post-pandemic working. Kearney is working with clients with very different priorities—one business is seeking to close one of its buildings in Paris to cut costs, while another is involved in a talent war and is focused on boosting employee satisfaction. A third client is based in a rural area, which has made it difficult to find good people. New ways of working can help overcome this challenge.
Still, almost all businesses have one thing in common: COVID-19 has opened minds by revealing how digital technologies can overcome many of the challenges related to remote working. The transformation in how, where, and when we work has just begun.
Beyond the pandemic, acute shifts in technology, demographics, the labor market, and the very nature of work itself could reshape the relationship between employers and employees. As remote working and virtual interactions become more accessible, location will matter less and less. Freed of this long-standing constraint, business leaders have a golden opportunity to shape working practices for the better. Now’s the time to act, to maintain your competitive edge.