Due to increasing costs of business, travel, and tightening time constraints, remote workplaces have been getting a lot of attention in the media for their cost saving potential. Companies of all sizes have found that remote environments allow for employee flexibility and a larger global reach. However, there are a few unexpected disadvantages that companies must understand before deciding if a remote work environment is right for them.
One of the most well-known and controversial changes that Marissa Mayer made when she took over as CEO of Yahoo! required all employees who previously worked from home to return to the office. At the time the struggling company needed rejuvenation and Mayer believed “some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu meetings.” Although she took a lot of heat for the decision, she had substantial research to backup her claim. In their research on globally dispersed teams, David Armstrong and Paul Cole determined that the best work teams have a high sense of psychological closeness. They describe this term as “many interrelated variables, including the degree of identification with group membership; the similarity of work goals, norms, roles, and the procedure expectations; the accuracy of mutual comprehensions; the degree of motivation towards shared goals; the amount of interdependency and mutual trust; and the frequency of communication among members.” They found that all of these qualities were increased in a shared work environment. Remote employees are further removed from this psychological closeness, potentially creating an environment where they work more independently, and less for the team.
Remote work environments rely on various electronic communication systems in order to function. In the study “Critical success factors for video conferencing,” Wickramasinghe et al. found that “electronic communication systems are deficient in four basic cues for communication: reciprocity, conversational fluidity, mutual gaze, and un-interruptability.” Although electronic systems such as email and video-conferencing are valuable for passing information, there is always a reduction of social cues that are critical in face-to-face conversation. In their research titled “The Virtual Tea Room,” Renee Gedge and David Abramson show that “one of the most commonly reported sources of unease is the lack of reciprocity and privacy inherent in the [video-conferencing] system.” Electronic communication’s inherent shortcomings may create an environment where a sense of unease is shared between fellow employees, decreasing trust and possibly creating a more hostile work environment.
One of the reasons why Marissa Mayer’s decision to force everyone into the office was so controversial was because people had become very comfortable working from home. To them, it created a more balanced environment where they were free to work in whichever atmosphere best promoted their creativity. Brad Harrington, executive director of the Boston College Center for Work and Family notes that people who work from home tend to have less stress and are more productive. This is because they don’t invest time and money in commuting and because they can balance their personal and work lives. Stated otherwise by Gamel Wiredu in the Information Systems Journal, electronic communication technologies “facilitate human’s desire for flexibility in communication behavior and manifest reduced structure overload.” Working from home can promote worker happiness and increase their sense of satisfaction for the company they work for.
The main reason why executives usually switch to a remote environment is to reduce costs. By reducing the number of employees in the office, real estate requirements will significantly fall. Between 2005 and 2012, insurance company Aetna increased its telecommuting workforce from 9% to 47%. During that time they cut real estate costs by $78 million. Travel costs are also a significant factor. Daily commutes to work and meetings are often reimbursed by the company resulting in thousands of dollars in additional costs per year. Costs only increase with global reach. Companies that wish to utilize the top employees from around the country or globe will incur higher cost in order to bring these people together.
This reduction in driving and travel also has a positive impact on the environment. A study looking at Cisico’s TelePresence system showed that a large company utilizing their system can save the planet over 15,000 tons of carbon dioxide emissions per year.
How do I decide what is right for my company?
It may never be a clear-cut decision if a remote workplace is right for you. In order to decide, you must first have a clear understanding of your main business functions and the importance of face-to-face communication within those functions. Since Power Ten, Inc. is a defense contracting company, one of our main priorities is proximity to military bases around the country. By promoting a remote working environment, we can utilize the best employees that are based near important military institutions. As a result, travel costs are significantly reduced and we are able to remain in close contact with the departments we serve.
While making the decision, it is also important to understand which electronic communication technologies are available to your business. Multiple studies have proven the benefits of communication technologies that can best create a sense of social presence, or feeling of face-to-face interaction. However, these technologies, typically video-conferencing or TelePresence, can come with a high initial cost and are subject to subscription fees and maintenance. The graphic above demonstrates the relationship between technology and the interaction results that are fostered. At Power Ten, our domestic dispersion allows for our important contract meetings to happen in person while most of our internal communications are electronic. However, rather than relying on one electronic communication technology for all internal interactions, we utilize email, cell phones, chat applications, screen share/audio conferencing,and multiple collaborative tools to allow a greater flow of information. We remain aware of meetings that might best take place in person and have face-to-face interactions when deemed necessary. Russ Emons, Power Ten’s President and CEO summarizes the benefits of remote work environments on business as such:
“The advantages of our remote work environment are manifold. We are able to matrix the right person for the task regardless of their location, without having to settle for whoever is local. And as inspiration often strikes at a moments notice, we are never far from our virtual office to take advantage of that muse. The remote office concept keeps our facilities costs to a minimum, allowing our rates to stay competitive. And not insignificantly, the remote work environment is easier on the global environment with far less energy spent commuting and less of our peoples time wasted in transit.”
Finally, when looking to switch to a remote work environment for your company, take time to ease yourself in. Start by allowing one or two days a week of remote work and see if productivity if impacted. There are a multitude of free services available to test. Utilize different ones and see which work best for your employees and company. During this time, have open communication with your employees to get their feedback to avoid any dissonance that may be created.
As an executive, it is a daunting task to restructure your work environment, especially when it removes employees from your direct oversight. However if implemented correctly with a focus on results-based productivity, remote work environments may increase employee creativity and collaboration while saving significant money for your company.