April 5, 2021 in Ideas
Remote work has been a particularly hot topic since the COVID-19 pandemic began. Large companies like Microsoft have switched to permanently remote friendly policies, while others like Amazon have stated their plan is to stay office-centric. Either way, it does appear that we have entered a new era that is generally more open to remote work than previously. Even before the pandemic started, remote work was an often discussed subject that seemed particularly trendy among technology companies. Historically commentators on remote work typically fall into two different, highly opinionated camps. Some are extremely skeptical (and remain so), others are dogmatic champions.
Here at Cardinal, we default to remote friendly. Now that that's clear up front, we do want to dive into a deeper examination of why. We get questions about this all the time based on our decades of experience learned leading remote, hybrid, and in-person teams. Many management teams have been dealing with for the first time, and in the middle of a pandemic. It hasn't been easy, and from recent conversations many people are still struggling.
Before we get started we do want to acknowledge explicitly that for some jobs, and in some industries remote just simply is not possible. Many service industry jobs are like this. You have to be there in person to do the work. There are also some jobs that people imagine one day to be remote friendly, like surgeons, but we're still a way off. Lastly, there are always going to be trade-offs with any decision relating to how teams work, so you will ultimately have to make an assessment for yourself and your team. With that out of the way, let's jump in.
The general assumption is that people who are remote work from home. That's not always the case, but for team members who do work from home there are numerous benefits to avoiding a commute to work. Obviously, there is the time saved both ways getting to and from your office. Depending on your salary, how often you go to the office, and other factors, this can easily add up to thousands of dollars in value. That is before taking into account the value you get out of reallocating that "recaptured" commute time. Do you work out more? Spend more time with family?
In addition, there are other savings beyond time. Car insurance companies like Geico will factor in how often you commute to your insurance costs. You will save money on fuel, parking and maintenance costs. You might not even need a vehicle anymore! Those savings aren't just good for the worker, they are also good for the employer since your worker will have increased income to use. At Cardinal, we strongly believe that a happier team makes for better customer experiences.
When lots of people work remotely, the strains on our transportation infrastructure are drastically diminished. This was made quite clear at the beginning of the pandemic with mandatory shelter-in-place orders in markets like Seattle and San Francisco. Less cars on the road mean faster commutes for people that don't have an option to work remotely. There are also fewer accidents, which has follow on benefits for law enforcement, healthcare and more. Finally, there is also a clear positive impact on our environment.
There are many people who have valuable skills who cannot commit to an in-person, 9 to 5 job. The classic example are parents who have to take care of children and manage their schedules accordingly. There are other situations, though. Think of people who have to be caretakers for sick relatives. That is often a very demanding situation that doesn't allow them to work the conventional, in-office gig. In a similar vein, perhaps someone has a disability, and needs to stay inside the house or close to home (for example, a person with a compromised immune system). By allowing people to work remotely you can open doors to additional segments of the population that otherwise would be excluded from your team.
The operating assumption above is that you are hiring people who already have those life circumstances. That's great, but sometimes people who are already on your team are experience a life changing event. By offering remote friendly work, you are significantly increasing your ability to retain team members who are confronted with such realities in their personal life. Retaining good people is always positive for any company. Reducing complexity at work for people who are navigating change on the personal front is a win-win.
Recruiting and retaining talent is a very immediate challenge for most companies. When you require people to work from your office, and live within a commutable distance to said office, that is a limiting factor. The cliché example is a company trying to hire software developers in San Francisco. There is a war for that skill set in SF, and companies are paying through the roof to hire. Convincing people to move to San Francisco is not easy, because the cost of living is so much higher there than most other markets in the country. On the flip side is a company in a "undesirable" geography. We don't need to call any place out, but just imagine a company based in a place you'd never want to live. How hard is it for them to recruit talent if they require people to live there?
At Cardinal we believe diversity is important. Diversity is often focused on race and gender, for understandable reasons. We think cultural diversity is also relevant. Being remote means that you are increasing the likelihood of having some cultural diversity. Anybody who has traveled around the US can likely relate. Life in Boston is different than it is in Austin. Chicago, New Orleans, Tulsa, Los Angeles, New York, Cheyenne, the list goes on and on. Of course there are many things that Americans share in common, but there is also beautiful variety to be found across the country. Having people who work remotely, across the country, means a higher likelihood that those perspectives will be included, and you won't encounter any potential geographic bias by being located in just one place. Of course, global remote teams are potentially even more culturally diverse.
Of course the fact is that different groups of people tend to cluster in different places. Remote work enables those groups to work within your team. Let's say your goal is to have your workforce match the diversity of the United States. Well, depending on what location your company is based, it's going to be exceedingly difficult to make that a reality if you're requiring everyone to work in-person in the office.
At Cardinal, our goal with our team members is that they are motivated, diligent, and happy people. We expect people to work hard, and take pride in what we do. That said, we also very much realize that a lot of happiness is driven by pursuits and relationships outside of the work place. We've already discussed how remote work frees up time for team members to do more of what they choose, and as a result lead a more balanced work life. We believe that remote friendly work adds an additional layer of balance to the employer/employee power dynamic. You're saying to your team members, "I'm fine with you picking where you live and work from." That is an inherently different relationship than the butts-in-seat dynamic.
Offices can be highly productive work environments, but they can also be very distracting. There are lots of example of start-ups with offices that sound more like a playground than a work environment: videos games, ping pong, and kegs. That aside, there are things that are often distracting in a more "normal" office environment. Let's name a few: colleagues popping in to ask questions, people talking loudly on sales calls, laughter in the conference room or around the water cooler, delivery services dropping stuff off, and phones ringing. Remote work gives people the option to dial in an environment that is optimized for their own productivity.
When your workforce is remote, it is much less likely that your team members will get each other sick. There won't be any lost time to people being anxious about whether or not they need to go into the office tomorrow. School closures don't automatically mean your team is going to have to scramble for childcare solutions. You also don't have to worry about an earthquake or other natural or man-made disaster significantly impacting your workforce because your team is more likely to be spread out.
One of the biggest, locked-in fixed costs for companies are their office leases. If you are remote friendly, then you won't need as much office space for your team. You might not even need an office depending on the needs of your business. There isn't just rent savings, there are also savings in equipment, reduced tenancy improvement, utilities, and insurance costs.
This is a regular challenge for people who are working remote, feeling isolated from their colleagues. It's tough to get to know people on a personal level when you're not able to eat lunch with them on a daily basis, or grab coffee. For many personality types, particularly those who are more people oriented than task oriented, this lack of face time can be really challenging. There are lots of creative things remote companies can do to try and overcome this, but ultimately face time is face time.
Having team members in remote locations can materially impact compliance burdens. These costs are often statutory. Every team member you have in a different state usually creates a tax nexus. This means that not only are you potentially making your business subject to sales tax in those jurisdictions, you are also potentially creating nexus for personal property and income tax. Aside from the actual cost of paying tax, there is also the cost of preparing and filing returns. Tax laws are complicated, and vary widely state to state, and country to country.
In addition to tax, there are additional compliance costs to consider. What about data privacy? If you're a company based in Texas and you hire a team member in California, how does that impact your requirements to comply with California privacy laws? What about GDPR? We're not here to provide tax and legal advice, but the chief point here is that by offering remote friendly work, you are potentially opening up additional compliance costs to manage. This might be something you have to get in-front of when you set up any conditions on what type of remote work you are able to offer.
Communication is always hard, in any human relationship. Opportunities for miscommunication or misinterpretation increase the further removed you are from face to face. The general rule is that face to face is the most effective, then video, then voice, then long form text, then short form. Working remotely means that team members have to be more diligent about communication and documentation. Working remotely effectively isn't something that comes naturally to people, so companies need to be proactive about training and on-boarding team members on how to communicate effectively in remote environments. This is hard. Providing an amazing solution to these challenges is part of the reason we are creating Cardinal.
For many people early in their career, learning from colleagues in-person is an important part of development. We learned a lot of valuable skills from mentors in the office, who not only taught us lessons explicitly, but also through observing how they worked. We have seen how it is challenging for a person early on in their career to get the direction and guidance they need in a remote environment. They don't feel as comfortable asking questions. It's not as immediately obvious to colleagues that they need help. Think of your early jobs, assuming it was theoretically possible to do them remotely, would that have been good or bad for you? Think about the less experienced people on your team today? Would being remote be good or bad for them?
A negative or potentially positive depending on how you look at it is being spread across time zones. That can make collaboration more difficult because you have to wait to hear back from someone on the other side of the planet. Perhaps you have to regularly or occasionally work odd hours to attend a meeting with a colleague. That can be annoying. The flip side is that by having people in different geographies you can provide better support coverage to your customers, and be more responsive to changes in the market.
As you can see, there are many things to weigh and manage when it comes to remote work. To be fair, that's also the case when you have an in-person team. Coming up with policies and procedures that make your team the most productive they can be is what matters most at the end of the day.
It is absolutely true that some jobs just don't work remote. That said, many jobs do, and at Cardinal we think that whenever possible, remote friendly work is the way to go. We've built our platform to foster a productive, pleasurable work experience regardless of what setup you choose.