Note: This is a guest post by Soumen Das. Soumen is a specialist in the field of raising money through an IPO (Initial Public Offering) at NASDAQ. He works for a US based firm which launches Special Purpose Acquisition Corporation (SPAC) on NASDAQ to take private companies public. Prior to starting his career in finance Soumen was a Consultant at Accenture advising clients on implementation of tools to streamline their business processes. He is an enthusiastic blogger on Finance and Economics and frequently writes on current topics.
Even prior to the current pandemic there were discussions about the feasibility of Work from home especially in offices located in big cities. During those times the underlying reasons were high cost of commercial real estate, commuting time and pollution. Nowadays because of the pandemic, corporations are making it compulsory to work from home. It’s no more a virtue to be co-located. Thus arises the question whether work from home would continue even after the pandemic. In order to answer this we need to understand the challenges associated with it and the benefit it brings to the employees, corporations and nations.
Undoubtedly the first thing which comes into the mind when it comes to work from home or for that matter anywhere else is the flexibility it provides to spend time with family and friends. Being closer to elderly parents or younger kids while still able to complete the official tasks is something which the newer generation prefers. This makes them less stressful and hence more productive at work.
Work from home completely saves the hassle of commuting. In a big city like New York or Mumbai the time saved per day could be at least 2hours per day which means 10 hours per week or 40 hours in a month. This roughly translates to addition of 1.5 days per month of time. One can safely invest this time in doing more productive activities.
The cost of living in big cities are enormous. Individuals pay roughly 50% of their salary in rental and other non-discretionary costs in urban areas. This can be completely avoided if someone can work remotely from a less expensive place.
In today’s age of digitization anyone in the services or knowledge industry can work from anywhere. They just need high speed internet and good computers. They don’t need to be in a particular city or country to do a job. This opens the door for them to tap into better opportunities in different countries without worrying about immigration issues.
This is an obvious thing as fewer employees in the office means smaller office space requirements and reduced real estate. This could be quite handy as commercial real estate in urban centers around the world are quite expensive.
With this option of working, corporations can tap into talented employees in far off places and not just in the city they are based. They can also get hold of talented freelancers at a much cheaper pay grade than their normal employees.
Work from home provides flexibility to employees and reduces stress. This motivates employees and they prefer to stay longer in the company.The immediate consequence is drop in attrition rates.
Work from home often enhances productivity as employees remain less stress and avoid wasting time and energy in commuting.
Offices guzzling huge quantities of electricity by account of using Air Conditioning, bulbs, equipment etc. are a burden on the society. The decrease in number of fully functional offices have the potential to reduce pollution and Carbon Dioxide emission drastically.
This is an issue for emerging markets whose talented citizens often move to developed countries for search of better jobs. If employees could work from their own country rather than traveling to the country where the company is based, it could limit the brain drain.
In spite of its benefits Work from home has not been whole heartedly embraced by corporations. There are genuine hurdles to making it a norm. Employees not co-located are often not easy to manage.
As employees are distributed its often a challenge to have everyone on the same page all the time. Physical meetings and bondings during lunches have their own charm. Its important to have regular meetings so that everyone feels part of the team and no one gets isolated. Time zone differences are a reality. Tools such as Zoom, Skype, Google hangouts and Microsoft teams can create a nice virtual working environment and keep employees engaged.
Although organizations create repository of documents accessible from anywhere its a reality that co-located employees are often seen discussing tasks with colleagues sitting next to them. This cannot happen in a Work from home environment. Also, the office chat boxes and mobile chat apps come in handy to maintain the flow of communication.
Its a big issue for corporations as employees working from home could compromise confidential client sensitive data. Organizations invest massively on cyber security products to keep such data safe and secure. Work from home option thus would require additional expenses to keep the data safe.
Corporations rate employees on the basis of both soft skills and quality of their output. As employees are not physically in touch evaluators have to make an extra effort to tap into those metrics. Secondly, compensation packages also needs to be modified if employees work from low cost centers. Human Resources team needs to make sure that employees don’t get hurt by the process of evaluation as this could increase attrition.
Corporations are well aware of the pros and cons of work from home option. Management and senior executives need to set the right expectation from it. If corporations can keep their employees engaged through virtual tools, invest in tools to keep client and confidential data safe and deliver on organizational goals through enhanced productivity then the option of work from home could emerge as the norm for future modern day working.