The ease and speed with which you can now buy nearly anything — truly, anything — online is often taken for granted: not just food, but cars, homes, blue-chip art, even a college education. In the past 30 years, we have grown to trust the internet in a way we could never have imagined in the days of dial-up. In just three decades, the scale, efficiency, and effectiveness of virtual stores beat physical retail into submission.
I believe the same thing is happening with remote companies — call them e-companies — when stacked against in-person, physically headquartered businesses today. Between 2008 and 2018, remote work exploded 400 percent, resulting in almost 4 million remote workers in the US. It’s estimated that by 2030, 50 to 80 million of the world’s 255 million desk jobs will be performed remotely a majority of the time.
A remote work dilemma is emerging. Any company that’s less remote than its biggest competitor risks losing its most talented people to that business. Jeff Bezos said, “Your margin is my opportunity.” Today, your office is your competitor’s opportunity.
Recent surveys report that around 40 percent of workers are considering quitting their jobs — and that nearly 75 percent of the millions who have already left roles don’t regret it. The Great Resignation isn’t happening because workers don’t want to work. It’s happening because workers are leaving companies that treat them poorly, underpay them, or hinder their quality of life due to a thinly veiled lack of trust. By some estimates, forcing employees to go back to work in-office could result in employers losing up to 39 percent of their workforce. When employees have the freedom and flexibility to organize work around living, rather than living around work, a new paradigm emerges.
In the face of this momentum, management that opts for beleaguered arguments and empty, hand-wavy phrases over true organizational innovation will lose.
“We do our best work around the water cooler.”
Personally, the most progress I’ve observed made around the water cooler was deciding what to have for lunch. A study conducted on the main campus of a Fortune 500 company found that just 10 percent of all communications occurred between employees whose desks were more than 500 meters apart. This suggests that once companies span multiple floors, buildings, or campuses, they’ve already lost much of the collaborative value of being “in the office” together.
“Our culture at the office is special.” “We are social animals, we need the social connection of the office.”
It’s the office that has contributed to a disconnected world. In fact, a Gartner survey of 5,000 workers found that remote and hybrid employees reported higher culture satisfaction than on-site employees. Today, US workers commute nearly 30 minutes each way, on average, stealing time from hobbies and relationships outside of work. Does anyone, outside of company management, believe that considering your coworkers your closest social relationships is a good thing?
And over the last 20 years, as companies raced to become the equivalent of adult kids’ clubs and the commercial cost per square foot rose more than 50 percent in tech-centered cities, the office has grown to become a distraction factory of epic proportions. A slew of research has found that the open office leads to higher stress and less productivity. The office has become the enemy of deep, focused work. There is a reason people came in early and stayed late: it was the only time they had to get actual work done.
Ironically, in another strike against the “spontaneous collaboration” argument, a study of two Fortune 500 headquarters found that transitioning from cubicles to an open office layout actually reduced face-to-face interactions by 70 percent.
There’s another component to this that’s not frequently discussed in Silicon Valley: A company’s remote and flexible work policies can tell you everything you need to know about their seriousness for DE&I. Offices are great for certain demographics. For others — parents of young children or those with health conditions or disabilities, to name just a few examples — they make it almost impossible to access the best opportunities.
Perhaps you’re a company leader who’s patting yourself on the back because you’ve chosen to go hybrid, which is what a steady stream of news articles and company surveys over the course of the past three years reported the majority of workers want.
The problem? When workers say hybrid, they typically mean they want the flexibility to choose where they work from and when, all the time. (In a sign of how jarring this concept is to ingrained expectations, Gartner refers to this as “radical flexibility.”) On average, that will be three days a week from home, two from somewhere else. Studies show that when employees have flexibility over where, when, and how much they work — as opposed to the 40 hours in office standard — there is a marked increase of high performers in the organization. But when many companies go hybrid, they frequently dictate which days and hours their teams must show up. Both sides are using the same word, but it means very different things.
The combination of portable computing, great communication and collaboration software, and the internet has empowered new ways of working and living to emerge. In the face of this, companies that don’t adapt will bleed talent to their competition, and companies that embrace remote work will replace companies that don’t. Probably not today, maybe not tomorrow, but it’s a movement that won’t be undone. In the same way e-commerce has decimated many physical stores, virtual companies will crush office-based companies.
Join the Newsletter
Technology, innovation, and the future, as told by those building it.