Is the end of WORK as we knew it?
Madrid - May 2020
Today more people than ever in history have access to Telecommuting. The COVID-19 pandemic has triggered the most challenging telecommuting experiment worldwide of all times. There are many benefits linked to this way of working, nevertheless some barriers still remain active but many are being tackled thanks to the emerging collaborative platforms, new gadgets, services and the evolution of the organizational cultures towards the agility, flexibility and work life balance. These last are now ones of the most desirable perks for new generations and companies are reacting late to the opportunity to get and retain the best talented people. In Spain some indicators reveal a huge time gap between remote work adoption and the irruption of technologies that make it possible. Probably this will play a major competitive disadvantage for Spanish companies competing in international markets during this black swan which is hitting badly the global economy since last January.
HISTORICAL EVOLUTION OF REMOTE WORK
A good starting point to understand the current context related to telecommuting is to take a look back at its evolution in history. It paves the way to introduce the arguments presented in this article to make a statement of how the remote work might evolve in the future as part of the expected high volatile environments where there is almost no time to assimilate constant changes.
The following highlights from the past come from the excellent infographic published by the professional network Toptal:
1760-1840: The Industrial Revolution creates strong social momentum towards working outside.
1900: First iterations of the modern office come up linked to innovations such as Telephone, Telegraph, Typewriter and public electricity.
1970: The “Clean Air” movement brings the concept of “Zero Commute Time”.
1973: Jacks Niles, worked remotely on a NASA communication system. He is regarded as father of remote work.
1980: IBM allows five of its employees to work from home as an experiment.
1987: The number of telecommuting workforce increases remarkably.
2010: Over 59% of remote workers now work for private companies rather than simply freelancing.
2016: Team collaboration tool Slack grows from cero in 2013 to 4 million daily active users.
2018: The number of fully-remote companies grows exponentially.
2018: Video collaboration software Zoom declares 50.800 with more than 10 employees.
In 2020, the present is being fully influenced by the evolution of the, recently declared, COVID-19 pandemic in which hundreds of millions of people are being forced to work from their homes due to the highly restrictive rules of social distancing taken by Governments worldwide with the objective of avoiding the collapse of its health systems.
TELECOMMUTE STATISTICS IN SPAIN (PRE COVID-19)
Going back at the moment right before the declared state of alarm in Spain, in oder to assess the status of the remote work without the influence of the outbreak, last April the INE (National Statistics Institute) published the paper “Remote work in Spain and EU before COVID-19”. The report goes through a detailed radiography of the work-from-home state in Spain and its positioning versus the European countries in 2019, amongst other data.
Basically we could extract that, by the end of 2019, there was a fragile growth in terms of remote work adoption in Spain over last year. Data is breakdown by two different categories:
People that usually work from home (more than half of days for a year), went up from a 4.3 per cent to 4.8 per cent.
People that work from home occasionally, rose from 3.2 per cent to 3.5 per cent.
The ranking of usual remote workers is led by Netherlands with a rate of adoption of 14 per cent, followed by Finland with 13.3 per cent and Luxembourg with 11 per cent. Sadly, checking the variances of the usual remote workers category on this period of eight years, Spain barely went up 0.4 per cent, while Netherlands rose 2.6 percent.
Extrapolating these percentage differences to number of people, considering the labor force survey from the last quarter of 2019, where 19.9 millions of people had a job, Spain should have 1.8 million people more of usual remote workers to be at the same ratio of adoption of countries leading the list.
Comparing the weight of the GDP productive sectors between Spain and Netherlands, it could be distinguished a notable difference of 4.8 per cent on “Wholesale and retail trade, transport, accommodation and food and services activities” sector, possibly linked to the hyper developed tourism engine in Spain in which the feasibility of smart working is less frequent. Additionally, Spain shows a weight of 9 per cent less than Netherlands on its “Professional, scientific and technical activities, administrative and support service” sector, in which the adoption rate of remote work is more extended.
Datasource set available in Eurostat
SHORT AND MEDIUM TERM PREVISIONS OF SMART WORK (2021-2030)
In the coming years, forecasts of smart work rates will doubtless have to be reformulated due to the current extreme measures of social distancing related to COVID-19 pandemic and, unfortunately, not by a massive shift in organizational cultures where companies should already have flagged up telecommute as one of the principal social benefits for talent retention and talent acquisition in the labor market.
Same as new generations do not put the car ownership as a must on their to-do lists since they are more willing to get flexible access to mobility through the “Pay per Use” platforms, a generational shift is now happening in active job searches. Now, candidates tend to study carefully the target companies and they do it thinking on a medium-term temporal frame, where the potential career growth and a wide spectrum of perks, such as remote work, play an important place when it´s time to decide which company suits better.
Collaborative platforms such as ZOOM, Google Hangouts, Slack or Cisco Webex got over with practically all technological barriers. These platforms ease the flow of information among virtual teams, this is why just the organizational culture should be the only factor affecting the companies´ policies and adoption rates of telecommuting.
From the organizations standpoint, some tangible benefits come up in form of savings in electrical supply, and rent expenses, and intangibles like promoting a sustainable image of the company, carbon impact reduction and the already commented improvement of talent acquisition and retention. A key area that will make the difference is the company´s ability of addressing complex and agile projects successfully. The speed that provides the creation of virtual teams with the right skills set, knowledge and experience at the right time, will be materialized on a major competitive advantage.
Earlier this week The Bank of Spain has issued a report analyzing the evolution of telecommute in Spain over the last ten years. Probably, considering the context of publication date, it could be taken as a wake up call toward Spanish companies. The paper says that there is a wide room for improvement in terms of remote work adoption and gives details of the study that elevates the ratio of labor force that could make use of remote work up to 30 per cent versus a reduced 8 per cent by the end of 2019 (adding up usual and sporadic remote workers).
Google has demonstrated a strong proof of what is coming giving the order to all its US staff (more than 100.000) to work these days of forced shutdown from their homes. Looking at the other end of the scale, not long ago there were references of global companies operating in Spain where its personnel had available a reduce number of laptops for use just in case of an emergency.
Pretty good examples of what might be considered as a trend on the near future also exist in Spain. The tech company “Software DELSOL” based in Jaén, not only has solid stablished smart work policies, moreover the company is returning back to its employees part of the efficiency gains earned through the enhanced Time-to-Market of the last technologies. The company is pioneer in Spain in adopting the 4-day workweek without impacting salaries.
While overall benefits of remote work are clear enough, some disadvantages have to be tackled. On complex and creative tasks where teams need a strong flow of ideas to be exchanged, the productivity and efficiency could be slightly impacted. In addition, the knowledge curve of newcomers can be compromised due to not having in place an environment where the knowledge and skills can be transferred in an osmotic way. Thus makes the flexibility key when applying a work-from-home model, even knowing that in certain operational or project stages will have to be assessed by the teams themselves to make use of it smartly.
“Still have no idea how people can work a full-time job, cook dinner often, exercise regularly, enjoy weekends, keep the apartment clean. Seems basic but I can’t consistently do it.” Famous tweets like this will force companies to rethink how to get the most out of the existent technologies to be able to ease people´s lives whilst, at the same time, continue the path of improving its productivity and efficiency to remain competitive in the global markets. The target has been set by The Bank of Spain, setting the ratio of smart work adoption up to 30 per cent. As result of these, companies will have to make smart investments, not only in technologies to get the remote work accesible for the staff, but also to improve their ability to change and adapt all over the business functions to be ready for the coming strategic projects needed to evolve the business to the post COVID-19 digital era.
DAVID SANTOS HERNÁNDEZ - Founder and CEO at The Future of Corporate Finance, PMP, PMI-ACP, Finance Transformation Expert and PMI Volunteer at Madrid´s Chapter.
At The Future of Corporate Finance we work fully remote and promote the usage of collaborative tools to improve people´s lives.