Work From Home

To Work From Home, or not to Work From Home?

The Implications of the New Normal for Entrepreneurs

Unless you did as Jared Leto earlier this year and retreated to a desert to meditate while the world you unplugged from burned down, you’re aware there is still a once-in-a-century or so pandemic occurring. I’m going to make the assumption you haven’t been off the gird for longer than the length of a pregnancy. So, it’s not a stretch to also assume you’ve heard a lot of people say they now work from home. One more assumption, I’m sure you’ve heard their opinions on whether or not current arrangements meant to blunt the spread of COVID will outlast the pandemic itself. Once businesses are fully reopened, and employers don’t have the pandemic all but mandating employees work remotely, will employers nonetheless allow their employees to continue to do so? Perhaps even more importantly, should they?

Jared Leto, being an interesting human being off the grid, and a useful example for my intro about Work From Home.

Or, will there be a return to “normal”? Will employees capable of performing the tasks of their jobs, whose productivity can be enabled and monitored thanks to modern technology, be expected to return to their commutes and cubicles?

Both approaches have passionate defenders and detractors. And since hiring and managing employees as well as determining where to require them to be during business hours is part and parcel of being a full-time entrepreneur, I’ve decided to weigh in.

Work from Home; Arguments in favor and What They Mean for Entrepreneurs and Everyone Else

Work from home life

Work from home, also known as remote work, is a natural reaction to a worldwide pandemic that health officials instructed us to help contain by separating from each other. The expectation of course is that humanity won’t be wiped out or live with the pandemic forever. So, should we just expect to return to our normal commutes and offices once the pandemic has abated?

But many people are expecting, if not outright demanding, that the current work from home arrangements be made permanent. It’s long overdue, say some of the most ardent work from home supporters. This is especially considering how much technology enables us to effectively communicate and collaborate over any distance. And the work from home supporters arguments make a lot of sense.

And Those Arguments Are…

The first common argument I see in favor of remote work is; if you hire someone, you should be able to trust them. They’re adults, and should be treated as such. And if you can’t trust them to do their work without monitoring them in person, why did you hire them?

Adding to that argument, more and more businesses are striving to become meritocracies. In meritocracies results and accomplishments are valued more than tasks performed. And certainly moreso than time spent at the office, and seniority in the role. The point of compensation for employees in a meritocracies is their output warrants it. We should be less concerned with how long someone performs their tasks, and where they do so, and more appreciative of the quality of the work. It’s a long enduring premise of work-at-the-office that butts in seats at specific locations is required for work to be done effectively. But this is predicated on pre-high speed internet limitations on how employees can do their jobs.

Modern corporate America emphasizes metrics above all else. This is a testament to how much this view on what matters when it comes to evaluating employees has shifted over time. With the availability of technology that allows us to more closely monitor productivity and track and analyze results, we can understand better who merits the most praise and reward at an organization. We also know whose productivity needs to increase. Lastly, worst case scenario, we know who needs to get let go, wherever they may be working out of. It thus follows that if output is what matters, who cares about location?

Employee Happiness With Work From Home

The next argument contends that employees will be happier with work from home. This is, in and of itself, a laudable goal for companies. Not only is it kind and considerate of them to make their employees happier, it’s better for business. As this Oxford study demonstrates, happier employees are more productive.

Employees working from home will be able to better balance their personal and work lives. They can expect to get several hours of their very limited time back, which is an enormous benefit a company has limited other ways of providing that can be used to do whatever chores they need to do and spent in pursuit of their own interests. Much more importantly, they can spend more time with their families. All that matters is, as pointed out above, that they get quality work done, something that can can easily be measured, monitored, and predictably achieved.

Thus Far…

The results seem very positive, as employers are mostly reporting similar or greater levels of productivity since switching to a remote model.

Since many business models can adopt a remote model, entrepreneurs can now find the talent they need practically anywhere. No longer do they need to make sure they have offices in locations such as big cities. They can find talent in large cities without having a physical presence there, and regardless of where their presence is, they can find talent wherever it is, even when it happens to be in far less populated suburbs and rural areas. And, the cost of living is lower in such places, meaning remote work can help mitigate compensation costs.

Additionally, for entrepreneurs and business leaders, another massive operating cost, leasing and owning real estate, can be significantly decreased when the need for office space is lessened. Startups, the go-to glamor model for entrepreneurialism these days, have very high gross margins, and with operating costs decreasing, startup entrepreneurs can expect to see even healthier net margins once they turn profits, and can greatly slow their burn rate when they’re living off of investor capital. In fact, many business leaders have caught onto this idea already.

Lastly, entrepreneurs need to consider not just what they’ll gain from a remote work model, but what they stand to avoid losing, most notably, potential talent in search of remote opportunities. When considering jobs that do not provide the implicit trust, additional convenience, and time-value of the remote model, talented employees may opt in favor of roles that do, costing entrepreneurs the very necessary human capital they need to make their business thrive.

Work from the Office; Arguments in favor and What They Mean for Entrepreneurs and Everyone Else

Offices, the default for many, even in the new normal of Work From Home.

There’s no denying the many advantages of work from home. But, it could be that a lot of the positive sentiment driving this new movement is the result of recency bias. Recency bias is “a cognitive bias that favors recent events over historic ones.” Work from home is obviously a newer idea than work from the office, which may mean we are favoring a more recent development simply because it is newer. Based on the arguments outlined above, I certainly don’t think that could possibly be all there is to it, but like all cognitive biases, it can be difficult, as a human subject to them, to notice their impact since we are normally myopic about such things.

Work from the office still has some merits and defenders of its own, and I think there are some good arguments in favor of having, at least to some extent, physical offices in spite of the advantages of remote work.

At the role I had during the outbreak of COVID, after we had gone fully remote pending further notice, I recall a VP of mine saying “well, now you’ve got two more hours in the day” The implication of course being the cessation of our daily commute was not a net gain for us, but for the company. Instead of being considerate and allowing us to use that time as we saw fit, or at least splitting the difference, they decided we owed them more time and effort every day despite not increasing our compensation. This happened at a tech company mind you, so, with all of the open-mindedness and forward thinking that’s supposed to come with the label, if even their reaction is to behave so exploitatively, any company can.

I Can’t be the Only One Who’s Experienced This

I realize this is anecdotal, but I think there’s a shared universal experience we all have of companies using any development, be it an miraculous, wonderful, or tragic, to cynically advance their own self interest, often at employees or the public’s expense. Make no mistake; many companies will see the end of commuting as an opportunity to squeeze more work from their employees.

Yes, the emphasis is still on quality, but old habits die hard. Especially when we can perform whatever mental gymnastics routine we need to cling to our biases. It’s still not uncommon to see the “if we get a greater quantity of quality work, we get more profit!” mentality. Never mind efficiency output from work is subject to the law of diminishing returns. Too much work is actually bad for productivity.

How Will Culture be Affected by Work From Home?

Any successful entrepreneur will tell you a strong corporate culture is an important part of any company’s success. Employees need to feel like their company supports them. They need to know they can trust and count on their coworkers and management and are trusted by them. They need to know the company’s ethics and values align with their own. And they need to know they’re contributors whose work matters. It’s an important part of most people’s sense of self worth. Those are just a few of the things great corporate culture provides employees during the time they spend, half of their waking hours during the work week and then some, doing their jobs.

I, for one, understand the importance of great company culture and the positive impact it can have on people’s lives. I’ve met some of my best friends at work. Through the turbulence of what is a very up-and-down career path, those friendships and the mutual co-dependency they enable has been an essential part of toughing out the bad times. And truly enjoying the good.

I’m far from the only one whose personal life has been enhanced by the positive externalities of a great company culture that enables rich interpersonal relationships between employees. According to at least one survey, as many as 15% of people are meeting their significant others at work. That makes the office the second most popular way of meeting an SO, after through mutual friends.

There’s a Simple Explanation for That

I don’t think most people disagree that rich interpersonal relationships are better fostered by physical proximity. I doubt I’d have had so many great friendships with my work colleagues if I never or rarely spoke to them in person. And I doubt we’d see as many married couples emerge from romances begun in an office with full-time remote jobs. Having thoroughly enjoyed many in person company events, such as annual Sales Kick-Offs, team outings, and happy hours, and generally just lived life and gotten to know everyone I do through old-fashioned in person socializing; I can confidently say nothing supports a kind of richness in interpersonal relationships like physical proximity. Virtual happy hours aren’t nearly as good as the regular kind.

I’ve seen people say we can have fully remote jobs and achieve the same richness of relationships as we always have. But I’m not convinced that isn’t another set of logical hoops they’ve jumped through to justify their recency bias. The fact is, you can’t be confident in such a notion so soon. We may very well find out in several years of many companies opting to go fully remote that work no longer contributes to fulfilling our social needs, instead providing at best a facsimile of such through virtual connectivity, the same way social media doesn’t really connect us socially. It’s just a pretense.

In person contact, up to a point, is a necessary component of truly rich relationships. I can’t, for the most part, really see becoming friends with someone I meet in person once or twice a year. No matter how many Zoom calls we’re on together in between.

So, What to Do?

To Work From Home, or Not to Work From Home? That is the question.

I’m not a fan of appealing to middle ground for the sake of simply doing so. It’s a fallacy, and not helpful. That having been said; I am of the mind that a moderate view will provide us with the right answer for the future of remote work.

It seemed like, even before COVID struck; that companies were becoming more flexible and considering things like giving employees a day a week to work remotely.

So, why not flip the script and do the opposite? Don’t expect employees to come to the office every day. Rent out the minimum space needed and allow employees to come and go as they please. They can use the office as a resource to meet and collaborate when needed. And perhaps companies will have some team meetings and training sessions in person to create the sense of togetherness of a strong company culture. These gatherings should be scheduled sparingly to protect employee’s newly enjoyed freedoms.

Boom, all boxes checked. Save money on real estate? Check. Ingratiate employees to the company by conveying trust and giving them their time back? Check. Maintaining some proximity to help everyone get to know and like one another? Check. Hire necessary talent no matter where it is? Check.

Naval Ravikant, Founder and CEO of Angellist Weighed in on This Recently.

And had a nuanced view I largely agree with.

To highlight some of what he says, he makes the caveat that “Nothing is going to replace in-person, human warmth and communication. When two humans are in a room next to each other, they communicate at a much higher bandwidth through all kinds of subtle, physical signals than they do over video.”

He goes on to explain the shortcomings of traditional on-premises work; why companies are hesitant to change, and where the change is already occurring. What I interpreted his sentiment to be is that employers, need to adapt to a new, mostly remote environment. But it should still be an environment that provides some sort of in-person interaction. On the spectrum of work from home vs. not working from home, his view skews more towards the work from home side.

It’s a view I largely agree with. So when I say I’ll take a moderate stance, I don’t mean directly in the middle. In case it isn’t completely clear, I tend to favor a mostly remote arrangement, with some arrangement for in-person work. Let’s say a 80/20 or 90/10 split in favor of remote to office located work.

Would love to hear why 100% remote is the way to go. Or why a balanced approach might be better if that’s what you think. Or, if you’re one of the increasingly rare ones that think a return to the old way of doing things is warranted I’d especially love to hear that. Whatever you think, please let me know.

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