Earlier this spring the head of Apple’s machine learning initiative resigned. At first glance, this is not major news. His reason for doing so was. Apple announced that it expected employees to return to the office. The leader in question refused to do so and rather than comply, he resigned.
Businesses large and small are wrestling with how their organizations will function in the “post-COVID” world. In parallel employees are experiencing major changes in their expectations for what work is all about and how they can manage their careers. I have seen this firsthand in my roles as a Career Coach at HBS and as an adjunct faculty member at the Johnson School at Cornell – students and managers have struggled alike with the basics such as virtual recruiting, virtual summer internships, and virtual networking. This is creating significant uncertainty in how we work and run companies. One thing is certain, however: Business writ large is taking this very seriously and does not view it as merely a passing phenomenon.
In the immediate term, there are major issues that will require difficult choices. Worth mentioning are:
Fairness. WSJ and other studies suggest a hybrid work world with 20-30% of companies allowing complete work from home freedom; 20-30% expecting full-time presence in the office; the remaining 40-60% with a hybrid model. The question is: who gets full WFH privileges – who must be in the office? How to motivate front-line workers and simultaneously allow flexibility for high-skill jobs? How will compensation work if employees choose to relocate to low-cost locations for WFH settings – should they be paid less for doing the same job in a different location (or geography)?
How managers will manage. Multiple studies conclude that managers must be much more attuned to communicating with remote employees, fostering a sense of team and collaboration, and even understanding how to help employees deal with the stresses of mixing work and family obligations in WFH settings. Performance evaluations and metrics become trickier. A recent Gartner survey showed that 65% of managers believe that in-office employees perform better than remote workers and 75% of managers believe that in-office workers are more promotable than WFH peers. It is not likely that employees see it that way. The skills to be a good manager are changing significantly.
Employee retention. The Great Resignation turned out to be pretty much a continuation of a trend of voluntary resignations seen since 2008. But WFH policies and virtual technologies have revealed that flexibility, lack of onerous commutes, and better quality of life are now within reach of many who were obligated to be in the office. Current labor shortages at all levels enable employees to move to new jobs, locations, and lifestyles – often just months apart.
Longer-term, deeper issues are emerging. Companies are trying to figure out what to do with expensive office/real estate commitments – actively subletting and/or repurposing space no longer needed for office work. Virtual collaboration and other automation tools have proven to be godsends. But a recent Harvard study estimates that 40-60% of current mid-level management tasks can be replaced by automation within the next 5 years, putting additional pressure on what work is all about. Many companies have found that worker productivity and output have increased or at a minimum remained the same. But there are still many tasks and roles that require in-person collaboration and/or face-to-face interaction that companies will need to support and enable through measures such workspace design, office perks, and flexible schedules.
So, what does all this mean? First, for employees, skills matter more than ever – high-skill employees will have the most freedom to choose where and how they work. Soft skills such as communication, empathy, and leadership will be essential. Specific technical skills will continue to be valued; skills that can be transferred into new roles and settings will be valued even more – thus, continuous learning will become the minimum requirement for meaningful employment. Employee resilience and flexibility will become difference makers for careers.
For companies, dealing with the divergence of how high-skill and lower-skill work is done will create bigger tensions around fairness and a sense of worth. At a minimum, it is very likely that companies will need to take on greater responsibility (and cost) for training and continuously educating employees. Beyond that, the basic challenge of managing the organization successfully will be much more complex, requiring a new way of managing – not only in motivating and rewarding employees with many options and views of how they want to work but also in terms of what emotional/health/childcare support they will need simply to have a decent standard of living.
At the end of the day, the COVID pandemic will likely prove to have opened eyes to new possibilities for how work is done and accelerated several trends that were already present. Change in how we manage and how business is operated is here to stay. The pace of change is the new dimension to tackle. Companies with the DNA to innovate and be responsive to shifts in the external environment will prosper.
Sage Partner Rich Schneider contributed this Sage Advice.
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