Brendan Shaw
"If after 15 months, you have only a 'suspicion' about what your people are up to and find it 'hard to know' who are your top performers, you are guilty of neglect at best, mismanagement at worst. The worry is that if you manage people in this way, you probably did so before the pandemic and will continue to do so afterwards, whether or not your people return to the office."
- Andrew Hill, "Leaders must stop blaming their bad management on remote workers", Financial Times, August 2021.
"Push comes as employers use more aggressive tactics to stamp out work-from-home culture."
- Financial Times, August 2023.
"I completely understand why someone doesn’t want to commute an hour and a half every day. Totally get it. Doesn’t mean they have to have a job here either.”
- Jimmy Dimon, CEO, JP Morgan, July 2023.
"Employees just didn't go – so leaders began switching carrots for sticks."
- Associate Professor Grace Lordan, London School of Economics, December 2023.
"Remote employees have been blamed for dwindling profits and costing cities billions, and fears of a recession have eroded their ability to demand the telework perks they won early in the pandemic, when the labour market sat squarely in their favour."
- Bloomberg, October 2023.
“Microbes and markets had to operate in tandem to compress inequality."
- Walter Scheidel. 2017. The Great Leveler: Violence and History of Inequality from the Stone Age to the Twenty-First Century, p. 292
When was the moment for you that you knew the Covid-19 pandemic was over?
Was it when the World Health Organization officially declared the pandemic over? Perhaps it was when we got to travel internationally again, or when Covid vaccines just became a normal part of life?
For me, the sign that proved the Covid pandemic was truly over was in August 2023 when Zoom demanded that its employees return to the office.
The company that made a truckload of money with its virtual meeting system and built its entire business model through the pandemic, was now demanding that its workers turn up in person to the office.
Apart from the exquisite irony in this, it proved that even the most virtually oriented businesses had had enough of not having their workers within touching distance. It was the old colliding with the new.
Pandemics have a habit of changing work practices and societies
When the Black Death plague swept through Europe in the 14th century, it killed perhaps 50% of Europe's population at the time, but also triggered the collapse of serfdom and the rise of paid labour in Western Europe.
Prior to the Black Death, European farmers and landholders worked for the local lord for free, in return for protection. But with the death of half the population, in Western Europe in particular labour became scarce. The result was that the lords and nobles had to start paying workers for their labour. Quel horreur! The demand and supply equation tipped in the balance of the peasants who started to get picky, demanded more money for their time and wanted better working conditions.
The elites, nobility and governments of course tried to stop this. They denied labour shortages were happening and tried to stop these disruptive societal and industrial changes. When workers wanted a better life as a result of changing economics, the establishment tried to return to the old ways where they got to set the standards, the pay rates and how the work was done.
Businesses, lords and governments colluded to prevent these changes. They recoiled at the evolving ways of working. In Western Europe, serfs increasingly bought their freedom, demanded better working conditions and a better life, and became independent contractors.
Sound familiar?
Are we seeing a similar pattern emerging with the rise of working-from-home (WFH) during the Covid-19 pandemic, and what is employers' willingness-to-fund (WTF) this social and industrial change?
The rise of working-from-home
In many countries around the world during the Covid-19 pandemic, WFH became the norm for many workers and sectors of the economy. While the technology to use WFH has been around for years, it took a global pandemic to nudge employers to adopt it.
For many businesses and industries which did not require in-person, face-to-face contact, WFH becoming the way of working during Covid.
And, for many, they got to like it. Employees got to manage their own time. They had the flexibility to spend time with the family, to manage their work-life balance, and, particularly, many, many employees got to avoid the daily grind of commuting to work. Anecdotes abound of workers in cities and towns who suddenly gained 1, 2 or 3 hours a day because they didn't have to drive to work in traffic jams or endure hours sitting on public transport to get to the office each day.
The portents of what was to come were there to be seen early on. Surveys during the pandemic regularly showed that large swathes of the working population did not want to return to the office. In 2021, the Harvard Business School found that more than 80% of workers did not want to return to the office, or wanted hybrid working - except, interestingly, those working parents who had children at home (so much for parents wanting to be with their kids all the time).
It was so good for employees, that many surveys in this period showed that they would rather quit their jobs than have to return to the office. Globally, more than one-third of employees would prefer to quit than have to go back to full-time work sitting at a desk at their company office.
It occurred against the backdrop of the 'Great Resignation' seen in the early 2020s during the pandemic. Many workers quit employment altogether, driven by disillusionment with low-paid jobs, lack of job flexibility and feelings of lack of respect from employers.
Employers fight back
Just as the landed gentry, the church and the state fought back against worker demands for greater flexibility, independence and pay during the 14th century following the Black Death, so too businesses in the 21st century fought back after Covid.
As Covid receded, more and more companies started to insist and then demand that their employees return to the office through a combination incentives and threats. The irony of tech giants like Apple, Google, Twitter and Zoom threatening staff if they did not return to the office is extraordinary.
Amazon, the bastion of online ordering, started to track and penalise workers who worked from home too much. Apple threatened action against staff who did not come to the office at least 3 days per week. Some industry groups felt 'nauseated' by widespread moves in the public sector to make WFH more common.
More businesses are now telling staff that performance reviews and potential bonuses will be linked to how much time employees spend in the office. (Clock-watchers, anyone?). There's also a debate about whether you'll get higher pay if you turn up to the office or not.
Employers also tried to lure back their workers to the office, arguing that it was good for collaboration, innovation and learning. Jimmy Dimon, CEO of JP Morgan, perhaps let the cat out of the bag when he called remote working detrimental for leaders.
Eventually, companies switched from offering yoga and massages in the office, to linking bonuses to staff attendance. In scenes reminiscent of getting your name crossed off the attendance list at school, companies are now linking pay to whether someone is sitting at their desk in the corporate building.
There have also been suggestions, partly based on research, that physically turning up to the office is better for your career prospects, especially for younger people starting out. That's probably not unexpected if bosses are threatening not to pay your bonus or to not promote you if you don't show up at the office regularly, regardless of the outcomes you've achieved or how productive you are.
By 2023, the BBC called it, saying that the 'bosses had won the fight for power'. A bit like what happened to the serfs and peasants working in Eastern Europe and the Middle East in the 14th century, by 2023 a less secure labour market and global economic uncertainty gave employers the upper hand in demanding that workers return to their pre-pandemic work practices. Businesses reasserted their control over the labour force and people came back to the office.
One can't help wondering whether CEOs also just got resentful that their staff could work remotely from anywhere - their home, their local cafe, their beach house, their yacht - while CEOs themselves had to turn up to the office in person, endure the daily commute, and sit through boring meetings at the office with clients. Maybe they felt lonely or left out.
Productivity impacts of WFH
The question is whether all this newfound independence, contracting and working from home will, indeed, lead to the collapse of the global economy and society.
Interestingly, academics have argued that the collapse of serfdom in Western Europe after the Black Death led to those countries having higher incomes and economic dominance compared to other parts of the world from the 14th century onwards.
And, the latest research, while mixed, tends to suggest that WFH boosts productivity.
The Bank of England found that every extra day an employee works at home outside the office boosts their productivity by GBP 15,000 per year. Whether this is a reflection of the fact those employees receive lower wages or it's because they don't have to sit through too many unproductive, poorly managed in-house meetings is unclear.
While return to office orders might help encourage attendance and ... perhaps ... encourage collaboration and innovation, according to KPMG experts they also risk rewarding presenteeism rather than performance, undermining company diversity and inclusion policies, making it harder to attract and retain talent, increasing administration costs and bureaucracy, and creating risks of indirect discrimination.
Meanwhile, researchers at the University of Pittsburgh found that such return to office work orders are used by corporate managers to “reassert control over employees and blame employees as a scapegoat for bad firm performance”. Harsh stuff.
And we might not be measuring all of the productivity benefits of remote work anyway. Paul Donovan, the chief economist at UBS Global Wealth Management, reckons the world is moving to the fourth industrial revolution with a notable rise in self-employment around the world. As the Financial Review noted:
"The fourth industrial revolution might ironically take us back to a world that looks like it did before the first industrial revolution, when people worked from home, worked for themselves and operated in local economies. But there are more other specific implications, too; the self-employed save differently, for example, and in a way that might be missed in official data."
One wonders if the scenario is similar to what happened after the Black Death in 14th century Western Europe, where that pandemic led to major disruptive changes in social and industrial practices, and triggered conflict between elites and independent workers. It also triggered higher incomes, greater innovation and more wealth in Western Europe compared to the rest of the world.
In many cases, it seems that compromise of sorts is starting to emerge where a 'hybrid' model - a mix of in-office and remote working - is being tried many organisations. Employees coming into the office occasionally, or a few days a week, seems to be what is being tried.
Just as countries like England, France, Germany, Italy, the Netherlands and Spain saw similar aftereffects of the Black Death during the Middle Ages to those we're seeing now in the 21st century post-Covid, the effects are complicated and sometimes take a long time to become apparent.
If history is any guide, we might only be witnessing the start of major social and industrial change and development ahead.
Watch this space.
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