The hybrid work future

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At Paychex, on-site training and mentoring is important for onboarding new hires. But going forward more workers will have the option to work remotely than before the pandemic. (Photo credit: Paychex)

When the coronavirus pandemic struck here 15 months ago, several employers were forced to make an unprecedented pivot to doing business remotely. Many were surprised to find how quickly and effectively they were able to transform their operations—and as a result, limit the economic damage from COVID-19.

Now, these employers are faced with another challenge: deciding if and how remote work fits in their post-pandemic business model. While less immediate than the need to figure out how to continue operating after lockdown orders closed offices and plants in March 2020, determining the way forward involves a range of complex factors including the need to attract and retain employees, business culture, workplace equity and cybersecurity concerns.

With many workplaces reopening as the percentage of Americans who are fully vaccinated nears 50 percent and new daily COVID infections continue to decline, it seems clear that most people will not be working from home permanently. But a return to the way things were before the pandemic is not in the cards either.

In Rochester and around the country, all signs point to a hybrid future, with telework playing a long-term role that would not have seemed possible a year and a half ago.

The pandemic pivot

Not long after Gov. Andrew Cuomo locked down New York’s economy in March 2020 to combat the COVID onslaught, I reached out to a dozen Rochester-area business leaders and managers in a range of industries. The changes they described were dramatic:

Justin Copie

At Innovative Solutions, a tech firm that provides IT and application development services and consulting, owner and CEO Justin Copie said less than 3 percent of employees telecommuted full-time previously. After the pandemic hit, that figure jumped to 90 percent. 

Clerio Vision, a maker of vision-correction solutions headed by CEO Alex Zapesochny (who’s also Rochester Beacon publisher), had more than 70 percent of employees working remotely, up from roughly 10 percent.

At ESL Federal Credit Union, the portion of the staff telecommuting had increased to roughly 54 percent from 3 percent before, said Faheem Masood, president and CEO.

And at Paychex, one of the region’s top employers, “more than 95 percent of our workforce is telecommuting,” said CEO Martin Mucci. “That’s more than 15,000 employees companywide.” Before the pandemic, the figure was about 6 percent.

There were a few exceptions. Thirty percent of Gallina Development’s staff had shifted to working from home, compared with zero before the pandemic, but “only a small group can work productively from home,” President Andrew Gallina said. “I actually thought that we could be more productive, but working remotely has not been that easy in our industry.”

But for the most part, local businesses had accomplished a speedy and effective switch to remote work. The same story could be written across the country. A Gallup survey found that nationwide in April 2020, 70 percent of employed adults were working remotely full-time or part-time.

As lockdown orders began to ease, the WFH rate started to decline, then leveled off at 58 percent in September, Gallup reported in February. The decline was mostly the result of fewer people reporting they “always” work remotely; it fell from 52 percent in April to 33 percent in September. By contrast, the percentage of those “sometimes” working remotely remained fairly steady at just over 20 percent for most of the period.

Earlier Pew research had shown that access to telework varied widely by industry, with the figure as low as 1 percent for service-sector and construction workers. The December report highlighted education and wage levels as factors across a spectrum of industries.

“Eighty-three percent of those with a high school diploma or less education and 71 percent of those with some college say that, for the most part, their job cannot be done from home,” Pew stated. “And while a majority of upper-income workers (56 percent) say they can mostly do their job from home, 63 percent of those with middle incomes and an even larger share of those with lower incomes (76 percent) say they cannot.”

Remote versus office

As the winter surge of COVID infections and deaths ended and the prospect of an end to the pandemic emerged, business executives began to publicly take stock of their companies’ remote-work experiences and look toward the post-COVID era. The views were mixed.

The top U.S. tech companies were among the businesses best positioned to pivot to telework, and many had turned crisis into opportunity, reporting strong sales and earnings as other companies struggled. Some—like Twitter and Slack—were ready to give the WFH option a central place in their business strategies. But not all.

Amazon was eager to reestablish an “office-centric culture.” Google and Apple were eying a middle ground, allowing most staffers a couple work-from-home days per week, though Google parent Alphabet said it planned to spend $7 billion this year on expanding its network of offices and data centers across the U.S.

Faheem Masood

Even with their success in establishing a “distributed workforce,” as its sometimes called, local businesses have also encountered some hurdles. I recently contacted several of the executives who were part of my story a year ago and asked them what had proved most difficult.

“The biggest challenge has been ensuring that in a remote environment, we continue to feel the same connections that we did through in-person communication,” Masood says. “Make no mistake—during the past year, technology has played a fantastic and critical role, allowing us to continue our work, and uphold our values and our employee and customer experiences. But it is not an exact substitute for the benefits of in-person communication and building relationships.” 

Adds Masood: “Our core values and our culture make ESL what it is today, and there is a sense of connectedness left out when you are only meeting people on video calls. While our employees did phenomenal work throughout this pandemic to uphold and live our values day-in and day-out, there is a renewed energy we’ve seen being back in the office among colleagues and friends.”

Copie says maintaining connection with his employees has been the toughest part. “When you’re remote, it’s much easier to get buried in the work,” he says. “Though many of the employees talk about much higher productivity levels working remote, you lose the ‘water-cooler conversations’ and time to ‘connect’ to one another prior or post meeting time.”

At Paychex, Mucci says, “our culture is foundational to our success as a company—and that culture has been fueled by the family-like atmosphere of our offices, where employees gather to train and support each other, celebrate each other’s successes and life events, and engage in community service work together. It’s difficult to replicate that atmosphere in a remote environment, and it’s also challenging to onboard new employees without the benefit of on-site training and mentoring.”

Zapesochny echoes the other executives. “The biggest challenge has been keeping the cohesion and informational flow that more naturally comes about when people are physically working in the same space,” he says. “And that dynamic is particularly harder on new employees that are still trying to learn their work tasks and getting to know their teammates.”

Research conducted before the pandemic found increased loneliness associated with full-time remote work compared with office work, and that ranked with problems in collaborating and communicating as the biggest drawbacks for WFH employees. In the latest State of Remote Work report from social media management firm Buffer, however, while those factors were cited again, another concern rose to the top.

“This year,” the report states, “27 percent of remote workers selected not being able to unplug as their biggest struggle with remote work, followed by difficulties with collaboration (16 percent), and loneliness (16 percent).”

Tools for online communication and collaboration have improved significantly in the last few years, but during the pandemic the hours spent in online meetings have taken a toll, giving rise to the term “Zoom fatigue.” Even Zoom’s chief executive has not been immune.

Eric Yuan told a virtual audience of the Wall Street Journal’s CEO Council Summit last month that one day last year, he had 19 Zoom meetings in a row. “I’m so tired of that,” Yuan said. “I do have meeting fatigue.”

Science says virtual interactions truly are hard on the brain. An April 2020 National Geographic article explained why: During an in-person conversation, the brain derives meaning not just from the words spoken but also from a host of non-verbal cues. A typical video call “impairs these ingrained abilities, and requires sustained and intense attention to words instead. … Multi-person screens magnify this exhausting problem.”

Remote work also increases cybersecurity risk, experts say. A report from Verizon Communications last month noted an increase last year in attacks on technologies used in remote work such as cloud-based email and remote desktop applications. Keeping devices updated with the latest software patches and ensuring that employees maintain security precautions has become much more complicated. (One survey found that more than half of respondents had used or considered using less-secure public wireless networks while working remotely.)

What employees want

With such concerns, why would a business want to continue full- or part-time telework when the pandemic no longer is a factor? Here’s the biggest reason: Many employees who have worked remotely as protection against COVID have found they like the WFH option and don’t want to return to the office, at least not five days a week.

Among the teleworkers surveyed for the State of Remote Work report, 91 percent said they would like to work remotely, at least some of the time, for the rest of their careers. They cited a range of benefits, with the ability to have a flexible schedule at the top of the list.

Nearly half—46 percent—said their employer planned to permanently allow remote work.

Many teleworkers like the WFH option so much, they’d be willing to take a pay cut to preserve the ability to do so at least some of the time, a research team led by the economist Jose Maria Barrero found.

A Microsoft report issued in March—titled “The Next Great Disruption Is Hybrid Work — Are We Ready?”—stated that 73 percent of workers surveyed want flexible remote work options to continue.

Some employers who have signaled that a return to the office is on the near horizon have faced strong blowback. In early May, Washingtonian magazine staffers staged a day-long protest after Cathy Merrill, the magazine’s chief executive, wrote in a Washington Post op-ed that “although there might be some pains and anxiety going back into the office, the biggest benefit for workers may be simple job security. Remember something every manager knows: The hardest people to let go are the ones you know.” A number of identical messages quickly appeared on Twitter: “As members of the Washingtonian editorial staff, we want our CEO to understand the risks of not valuing our labor. We are dismayed by Cathy Merrill’s public threat to our livelihoods. We will not be publishing today.”

Last week, after Apple sent a memo to employees saying that starting in September, working from home would be available only Wednesdays and Fridays, a group of Apple employees pushed back in a letter to CEO Tim Cook. Among other requests, they asked that “remote and location-flexible work decisions (at Apple) to be as autonomous for a team to decide as are hiring decisions.”

If they want to remain competitive in hiring and retaining skilled employees, companies may have little choice on allowing some degree of remote work. In the job market, many workers are gaining leverage. On Tuesday, the Labor Department reported that U.S. employers had 9.3 million jobs openings at the end of April—the highest level since the department began keeping records in December 2000. A March survey conducted by PwC found that “almost a quarter (of employees are) considering or planning to move more than 50 miles away from a core office location. That’s on top of the 12 percent who have already made such a move since the start of the pandemic.” The reported added: “Employers appear to be adapting to this new demand for flexibility.”

The outlook in Rochester

Last year, when I asked about the outlook for remote work at Paychex, Mucci replied: “I believe it will play a larger role in our strategy in the future—not 95 percent of our employees, but higher than 6 percent for sure!”

Martin Mucci

His view now is unchanged. “Today, most of our employees are still working from home, but nearly all office locations nationwide have just recently opened for leaders and employees who are more comfortable being in the office,” he says. “Over the summer, we will be working with employees and transitioning to remote, in-office, and hybrid employee schedules. By September, we expect more than 25 percent of our employees nationwide will be in full-time remote roles, and we’re still in the process of defining the hybrid schedules.”

Beginning in mid-April, the roughly half of ESL employees who had been working remotely were moved to hybrid schedules, Masood says. Will telework continue to play a large role at ESL?

“Absolutely—some form of remote work will likely continue to play a role in our business strategy,” he says. “In fact, through our workforce flexibility program we were offering the ability to work a hybrid schedule prior to the pandemic. What the pandemic has done is that it showed us that across multiple departments in a time of crisis, we can deliver high-quality work in a remote environment.”

At Innovative Solutions, 40 percent of employees now work from home full time, 40 percent have hybrid schedules and 20 percent are in the office full time. Like Masood, Copie says remote work will “absolutely” be a key element of its strategy going forward. 

“There is no question that the pandemic has pushed every company to think like a technology company,” he says. “In my opinion, there is no way we’ll ever go back completely to how it used to be. There is a major push among our customers and within our own business to adopt more remote capabilities and leverage hybrid work environments.”

Alex Zapesochny

At Clerio Vision, which employs roughly 100 people today, Zapesochny sees an eventual return to the pre-COVID status quo.

“The percentage that works entirely remotely today is around 15 percent, and I think that number will eventually drop to the pre-COVID number (of roughly 10 percent),” he says. 

However, Zapesochny adds, remote work “will play a larger role, in that we will be more open to people doing their focused work from home at least part of the time.”

A competitive opportunity

A permanent shift in how and where people work could have profound consequences for cities, especially the largest U.S. metros where high expenses and exhausting commutes are the norm. A few months ago, the New York Times published an article headlined: “Remote Work Is Here to Stay. Manhattan May Never Be the Same.” It said “what had seemed like a short-term inconvenience is now clearly becoming a permanent and tectonic shift.”

A just-released Partnership for New York survey found that 12 percent of Manhattan office employees had returned to their workplaces as of late May, up from 10 percent in early March. Employers surveyed said they expect that 29 percent of employees will have returned by the end of July and 62 percent by Sept. 30. However, nearly three-quarters (71 percent) of employers plan to adopt a hybrid office schedule.

Simple math tells you that many companies in the largest cities will have more expensive office space than they need.

The “tectonic shift” toward hybrid work creates an opportunity for midsize and smaller metros—Rochester among them—to bid for businesses that are willing to relocate and remote workers who want to move closer to their families or seek a less-costly, lower-stress lifestyle. The competition among cities is likely to be stiff, though.

The Microsoft report says business leaders should “resist the urge to see hybrid work as business as usual. It will require the rethinking of long-held assumptions.”

Likewise, for regions like Greater Rochester. 

Paul Ericson is Rochester Beacon executive editor.

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