Decisions For The Future Of The Office

At Everest Group, we work with a lot of companies currently wrestling with the challenge of moving people back to the office. They went from everyone working at the office or company facility to everyone working from home during the COVID-19 pandemic.

There has been a lot written about the rising sentiment in management circles for the need to return to the office, with numerous examples of CEOs proclaiming that said move is essential. However, we can also observe from vacancy rates that this movement has stalled and is being actively resisted by a wide swath of employees. Short of a major realignment in the relative power of employees vs their management, it appears that firms will have to come to an accommodation forging a partnership with their employees which accommodates the needs of both sides into a better working situation. What is clear is that firms that attempt a one-size-fits-all receive the greatest pushback, and those that craft solutions that fit departments and functions achieve the best results.

When looking to strike the right balance, management faces a nuanced set of issues with subtle yet complicated decision factors. We can frame the nuances in a set of 3 Cs or three components.

The 3 Cs are collaboration, culture, and compliance. The 3 Cs are objectives involved in companies and employees trying to optimize their environment for the future of work. Each of the Cs has complexities.

But before we dive in for a closer look at the 3Cs, let’s review the sometimes-conflicting interests of companies and employees. Companies’ interests center around the desire to cultivate an attractive culture, facilitate communication, facilitate invocation as well as increase opportunities for mentorship accelerating employee development. They also consider an office-centered workplace an easier environment to manage in facilitating accountability and compliance.

Employees also desire an attractive culture with easy communication that facilitates connection. However, they balance these needs against the time sink and expense of long commutes and the ability to concentrate with fewer interruptions in the quiet of their own homes. How employees seek to strike this balance can also change by the stage of life they are in.

Employers want employees to return to the office; yet they find there are some functions where employees are best allowed to work from home. The design of the work model post-COVID does not have a one-size-fits-all solution. Not all functions and business processes are the same as far as where an employee can be productive at work.

Collaboration

There are functions that really benefit from people working in the office. The office or company facility is where collaboration is king. It is especially important in functions like IT.

Another example is the situation of having a workforce with young people coming out of college and needing training. Working from the office accelerates their training and their understanding of the company culture. They benefit from collaborating with the broader organization to learn the organizational culture.

But there are functions, such as accounting, where people don’t need to collaborate as intensely or as often and can easily work from home. Another example is for experienced salespeople who find it easier to work from home than in an office environment where they get distracted.

A significant issue that many companies and their associates face is that collaboration, or the lack of it, sneaks up on you. Associates feel comfortable in a remote or hybrid environment, valuing the freedom and flexibility it affords; yet, over time, they feel a disconnection and dissatisfaction they often attribute to other factors than missing the office environment. From the company’s point of view, the team dynamics and innovation are valued more highly than their associates.

Culture

The second of the 3 Cs is culture, which is especially important in a hybrid work environment, where some people work in the office, some from home, and some split their time in both locations. For companies designing their work environments in a hybrid model, they must decide how often employees should get together as well as where and in what context.

For example, at my firm, Everest Group, which has employees located in North America, India, and other geographies, we choose to get together at least twice a year. This has nothing to do with collaboration or productivity issues. We do this for the purpose of building a culture where we get to know each other and develop and reinforce our culture moving forward.

Like the point about collaboration, individual associates often value their flexibility and freedom more than the collective benefits of a vibrant culture. Typically, the value of culture is not shared evenly across the organization. Introverted members differ from their more extroverted colleagues, and younger and less experienced associates value in-person interaction more strongly than their older or more experienced colleagues.

Furthermore, the company likely views the importance and necessity of building a vibrant culture more strongly than some of its associates. Hence, when hybrid conditions are in place, individuals differ in their preference for in-person days in the office. And where office meet-ups or happy hours are organized, there is a wide degree of participation. This creates a controversy in how insistent the directive should be in ensuring consistent participation. Does the company conduct roll calls? Are there consequences for those that opt-out; if so, what are they?

Compliance

The third component of the 3 Cs is compliance. Companies face compliance problems if they have people working in multiple states in the US or in multiple companies. This includes security data integrity issues and tax issues as well as complications around employment laws in those jurisdictions.

Compliance issues are necessary, but they can be debilitating from a corporate perspective. Additionally, it is becoming clear that in some situations, there can be a reduction in productivity in remote work, with associates working fewer hours and being distracted by non-business interruptions.

Some companies manage the potential issues by restricting the countries and states where employees can work. Or they may allow employees to live within a 50-mile radius of a central office. In a hybrid work model, many companies now choose to simplify their potential issues by having fewer locations. Even if employing this strategy, they still will face compliance issues in those locations.

Some companies have added monitoring agents to workstations to measure productivity and bring accountability. However, these monitoring agents often create distrust with the company and work against a vibrant culture. In many firms, remote and hybrid work also interfere with the ability of management to provide clear supervision and spontaneous training.

Decisions Evolving

Although we are still far from landing on what the future of work will look like, companies are iterating towards it, using different assets and technologies to learn what best accomplishes their objectives. It is hard to imagine that most firms will return to the pre-pandemic office environment of five days a week in the office.

However, as remote and hybrid work continues to unfold, most companies will not do away with all their offices, and the three Cs will continue to exert a gravitational force to move work from the home to the office. It is also clear that these forces impact departments and teams differently and that new norms must be worked out by company, role, and department.