The Post-Covid Workplace Gets Clearer

Covid-19 has been one of the biggest challenges many have ever dealt with. But being well past the initial shock and hustle to respond to the new reality, we now reach a point where we can see what has worked, what hasn’t, and how Covid is transforming the future of work. Here is a summary of what key analysts have to say about the changing workplace, now and in the future, including helpful advice from some of the country’s leading consulting firms.

The Upside

A survey by Boston Consulting Group found that:

• The pandemic forced employers to move some 40% of employees to remote work.
• 75% of employees reported that they have maintained or improved their productivity on individual tasks during the first few months of the pandemic.
• 51% report maintaining or improving on collaborative tasks.
• Companies expect 40% of their employees to follow a remote work model in the future.
• 70% of managers are more open to flexible work models than before the pandemic.

Global Workplace Analytics (GWA) forecasts a 25-30% increase in workers working from home at least several days a week by the end of 2021. 80% of workers would like to work from home at least some of the time, and a third would be willing to take a pay cut to do so. They also shed some light on the dynamic behind management’s new openness to remote work.

“The research also shows that managers who have worked at home themselves are more likely to endorse it for others. Their worries about lost productivity go away. As they and their people get used to using virtual tools, their worries about not being able to collaborate are proven wrong. And they see for themselves, just how much happier and engaged they are without the stress of commuting, being away from loved ones, workplace interruptions, etc.”

Global Workplace Analytics also reports that companies are taking note of the real and potential cost savings with increased remote work. Occupancy studies for example, have shown inefficiencies in how traditional workplaces are utilized, with research showing that employees are not at their desk 50-60% of the time. A typical employer can save about $11,000/year for every employee who works remotely half of the time. Employees can save $2500 to $4000 a year working remote half time and even more if they move to a less expensive area (a trend already seen in pricey cities like San Francisco.)

Business travel may also change forever, with generally less of it, due to increased comfort and familiarity with video conferencing and other digital collaboration technology. This saves companies even more money.

Overall, GWA estimates work at home initiatives are saving US employers $30 Billion a day during the pandemic.

McKinsey notes that many have been surprised at how quickly and effectively technologies like video conferencing and other forms of digital collaboration were adopted. They also note that many organizations see opportunities to access new pools of talent with fewer location constraints.

The Downsides and Challenges

According to several leading economists in an article from The Centre for Economic Policy, the transition to remote work has been uneven, with businesses in industries with higher income and better educated employees more likely to transition to remote working. They also find that productivity effects are also uneven, with many firms becoming less productive because of the transition.

Also, they point out, as have others, that some sectors lend themselves to remote work more than others. A tech firm, for example, can make the transition more easily than a healthcare provider. There are some industries that just can’t do most of their work remotely.

The consulting firm EY Belgium cites challenges with the increased pressure on technology and information security, which some organizations have struggled with. They also mention how working from home can blur traditional work-life boundaries:

“Through the immediate introduction of homeworking, employees experience a blurring of the boundary between work and private life. Early adopters show that this does not necessarily impact productivity, but it does pose a threat to collaboration and communication if left unattended. Actively investing in your employees’ well-being therefore is an extra point of attention.”

The Boston Consulting Group survey found that employees missed the connectivity they had with colleagues in the office.

“Respondents told us they miss ‘being able to spontaneously walk to a coworker’s desk and discuss an issue’ and ‘social gatherings at work.’”

The New Future of Work

The Boston Consulting Group (BCG) findings point to a future work environment that is increasingly hybrid.

“This means developing new hybrid working models that enable employees to move seamlessly between onsite and remote work, as well as thinking about the appropriate physical space—both size and shape—for the hybrid office.”

With technology playing an integral role, BCG’s survey shows that 87% of employers anticipate prioritizing tech and digital infrastructure investments that support remote work.

BCG also points out the importance of good health:

“When it comes to promoting good employee health, companies need to focus on both physical health and mental well-being. While employees who are no longer commuting have more time to exercise, it is easy for them to be sedentary when working remotely.”

They also recommend recreating social connectivity in virtual and hybrid settings. The BCG article lays out some key questions to ask when devising such a solution and shares some examples from organizations.

McKinsey recommends the following steps for companies to reimagine work and the future role of the office.

• “Reconstruct how work is done” by resisting the urge to just carry on the same processes and procedures pre-Covid. Rethink processes, professional development, where employees need to be for different stages of projects and reflect on the values and culture and what promotes the culture.
• “Decide ‘people to work’ or “work to people” — Figure out what roles can work remotely and what should be in the office or somewhere in-between. Consider attracting and retaining talent and whether outcomes and value are net-positive or negative for each option.
• “Redesign the workplace to support organizational priorities”—Utilize new work models and a broader technological toolkit with a mind to social distancing, productivity, collaboration, learning, and preserving corporate culture. Collapse the boundaries between being physically in the office and out of the office.
• “Resize the footprint creatively”– Organizations should take a fresh look at how space is utilized and how it promotes “collaboration, productivity, culture, and the work experience.” This process should include thinking about where offices are located and consider a range of space solutions from owned space, standard leases to flexible leases, flex space, co-working space, and remote work.

Nearly eight months into the pandemic, we are beginning to understand the long-term changes that Covid has brought to work and the workplace. Despite the many challenges, a silver lining of the crisis may be that it has forced organizations to rethink what was once sacred, opening new possibilities for employee satisfaction, efficiency, and cost-savings.