The Future of Work, Fast-Tracked by COVID-19
Remote work is here to stay, and the future of work will be distributed and automated
One of the many trends that this pandemic has accelerated is remote work, aka, telecommuting. Those who are fortunate enough to be able to work remotely have quickly learned to adopt new tools for video conferencing and online collaboration. Over two months into this new normal, most companies have found that working from home, though not without certain growing pains, is a viable option for conducting businesses. Given the strong financial perks, some companies may be incentivized to make remote work a permanent option for employees as they scale down their office space and related expenses.
For client-facing service jobs that typically require in-person presence, COVID-19 is also seeding the disruptions that will change how they work. For one, this pandemic has forced many consumers to explore online channels as offline channels remain closed, therefore shifting certain types of jobs, such as those in the financial advisory and fitness coaching, to adopt digital tools and shift their services from offline to online. For another, the deployment of automated tools, especially in delivery robots and drones, has also been significantly sped up in response to the sudden rise in demand for contactless services.
In the long run, the way we work will become more widely distributed, both in terms of geography and time, and rapidly supplemented by, if not outright substituted by, automation. Things will play out unevenly for blue-collar and white-collar jobs, but the trends will converge in the long run. Here is how we will get there, and how COVID-19 just gave everyone a strong push down this path.
The Sudden Shift to Remote Work
COVID-19 has proven that remote working works, and there are many reasons that it will usher in a new paradigm shift in how we think about work and employment even long after the pandemic is over.
Before COVID-19, remote work was just an emerging trend among tech workers and high-powered executives who were always travelling. Most companies did not consider remote work as a legitimate option, even with technology tools widely available. In fact, only 7% of U.S. firms offered telecommuting and just 3.6% of American workers (5 million employees) spent at least half their working hours at home, according to data from Global Workplace Analytics published in mid-March.
Fast forward two months to now, 68% of U.S. employees (that are still working) said they had worked from home in that week, according to Gallup poll data published on May 4. Tech companies such as Google and Facebook led the way in this shift to work from home, and Twitter famously announced that it will allow employees to work remotely indefinitely. Now, many companies in other industries are also catching up on it. Nationwide, which has sent 98% of its workforce to work from home, announced a permanent transition to a hybrid model. Barclays CEO Jes Staley commented that crowded corporate offices with thousands of employees “may be a thing of the past.”
This is a remarkable acceleration of the emerging trend of remote work, and with past stigma around working from home now largely lifted, remote work is here to stay as part of our professional life in the foreseeable future. Make no mistake, many people will go back to offices eventually. After all, the office leases are already signed and, more importantly, it will take time for companies to pivot to a hybrid model that supports a significant amount of workers working remotely.
However, the math on commercial leases and potential liability of causing another round of outbreaks simply outweighs all the theoretical gains of getting everyone back to the office, and it could continue to not make sense for a while, not until a vaccine becomes widely available. And by then, companies would have invested so much time and effort into setting up the tools and infrastructure for remote work that they’d have little reason to roll things back and go back to assuming that centralized office work is the only way to work.
And it’s not hard to see why companies would want to keep doing it now that remote work has proven viable. For one, scaling down the spending on renting office space and other operational costs that come with having offices would be a huge relief to many companies during a Great Depression-level economic downturn. A 2019 study by SquareFoot, which specializes in helping businesses find office space, found that companies in New York City spend an average of $17,020 per employee annually on office space. All that savings could be redirected to better support remote workers with better IT infrastructure, equipment for home office setups, and perhaps even some subsidizations for home internet bills and coffee expenses.
Beyond the massive savings on commercial leases, adopting a more flexible remote working model will also open up the talent pool geographically for companies. No longer restrained to hiring locally, companies could theoretically scout for the best person for the job from around the country, if not the world. This could break the geographic constraint and, along with it, some long-standing assumptions of how companies organize and operate, bringing in exciting new opportunities to reconfigure the way we work. For those with jobs that can be done remotely, the globe-trotting life of digital nomads might not be too far out of reach, once it’s safe to travel again.
Of course, we’d be remiss not to mention the challenges we face in this sudden shift to remote work. Many working parents are struggling to focus with kids at home from school, and the stress we share over the ongoing pandemic is weighing on everyone. However, we should also keep in mind that the current situation is not the normal scenario for remote work. Under normal circumstances, remote work is not work from home, but rather work from anywhere. And that anywhere can be a cafe, a library, a co-working space, or even, yes, a good ol’ office. Without a global health crisis raging on outside, we’d be able to better enjoy the perks of remote work. And if we can make this work during a pandemic — and some studies have shown this sudden shift to remote work has had a negligible impact on overall productivity — we’d most certainly be able to make it work during non-pandemic times.
The Distributed Future of Work
The biggest implication of this accelerated paradigm shift towards remote work is that the very way we work will become far more distributed and freelance-based, which will in turn prompt a wide-ranging set of implications and consequences that both employees and employers will need to prepare for.
The way that the majority of the workforce used to work was structurally centralized and geographically concentrated. Save for some exceptions like farmers or writers, people would go to work at a workplace together, sharing the same office amenities and work environments. Out of practicality, companies tend to hire locally, and co-workers have an easier time relating to one another thanks to the cultural proximity stemming from shared local-ness. Typically being physically at work is the prerequisite for, and evidence of, the perception that one is working. Hierarchies are firmly established, all leading up to a top CEO, with people following a chain of command to ensure their work is both properly organized and recognized.
As we shift into a “work from anywhere” model, however, all these notions that are based on a binding force of shared time and place will start to disintegrate, giving way to much more flexibility and fluidity in how companies organize and operate. The future of work will be distributed, as opposed to the centralized model we have long canonized. Technology has long been ready to enable this paradigm shift, and the past decade’s development of the gig economy has been slowly pushing us in this direction. COVID-19 just happened to create conditions that stepped on the gas pedal and pushed the way we work into a distributed future, mainly in three aspects.
1. Geographic Distribution
Firstly and most obviously, the future of work will be distributed geographically. Besides the aforementioned impact on talent acquisition, remote work becoming mainstream will also lead to a geographical redistribution of the workforce. As incentives decrease for living close to a designated office space, since commuting will no longer be a daily necessity, we will likely see an uptick in people leaving densely populated urban centers with high cost of living for suburbs and satellite cities, thus effectively reversing the trend of re-urbanization that has been developing in the U.S. (and other parts of the developed world) for the past two decades. This redistribution of the workforce doubles as a redistribution of population, which will lead to many, many long-lasting socio-economic, cultural, and political consequences.
2. Temporal Distribution
Secondly, the future of work will be distributed temporally, which means that we need to embrace asynchronicity and find new ways to communicate and collaborate. The flexibility that remote work provides also means that you and your co-workers won’t necessarily be working at the same time, especially if the team is spread out over several time zones. Our collectively acquired preference of texting over phone calls as our primary mode of personal communications have culturally prepared us for this. Still, companies will need to adopt new productivity tools and protocols that are better suited for remote work.
Given the geographical and temporal scatteredness, we need to learn to adopt new protocols for workplace communications. Instead of trying to copy-paste our in-person office practices into the digital workspace, we need to develop new workflows that embrace the modularity and agility that remote work enables, leverage that to empower workers to be self-sufficient yet collaborative, and figure out how to work more asynchronously so that no one is stuck on Zoom meetings all day long. We are already developing Zoom fatigue, and we’ll need new tools — perhaps something like Clubhouse — to help us recreate the kind of spontaneous water cooler conversations in offices.
3. Structural Distribution, aka the Gig-fication of the Workforce
Thirdly, and perhaps most profoundly, the future of work will be distributed structurally. As workers scatter spatially and temporally, the old organizational model that was predicated on centralized assets, means of production and hierarchical commands will gradually be replaced by a distributed model based on a just-in-time, freelance workforce that changes from project to project, much like how the teams for movie productions are run, as we fully embrace this new modularized structure of work.
Of course, not every job will be outsourced to gig workers. There are some jobs that call for consistency and maintenance, such as accounting and HR, that will still work better with permanent workers over freelancers. That being said, a freelance-base distributed model will provide the kind of agility to scale up and down quickly, a capability that most companies will need to face the volatile times ahead, which makes it an attractive model for companies, especially those with a clear division of tasks and functions. The resulting kind of distributed work allows companies to adopt a more nimble approach to staffing and talent acquisition, prompting a new sprout of the gig economy that could impact even white-collar workers.
Needless to say, many new tools will need to be developed to make this distributed future of employment feasible. Cloud-based collaboration tools and zero-trust networks will need to be deployed to make sure that remote work is efficient and easily accessible, and new recruitment sites will need to develop to match white-collar freelancers in all trades to companies looking to staff a particular project. In the long run, distributed networks and smart contracts powered by blockchain technology will transform the recruitment process, making it easier to verify an applicant’s previous work experiences and evaluate their skill set, while also ensuring freelancers can be properly compensated for their work without relying on the approval of managers and finances.
The Cultural Argument Against Distributed Work
Of course, everything in life is a trade-off. Despite the many perks and benefits it offers, this distributed model of work comes with a unique set of downsides, with the most disconcerting one being the loss of company culture and team bonding. Most office jobs require a certain degree of teamwork, which wouldn’t be possible without a sense of team bonding. The physical proximity of being in the same office puts everyone on equal footing in accessing resources and, more importantly, facilitates spontaneous interactions and helps build company culture. A distributed model will, by definition, fundamentally obliterate that.
Indeed, if there is anything that will hold us back from embracing this distributed structure of work, it would be the fact that we are social creatures who long for a sense of belonging, even when we work. Many other downsides of a primarily freelancing model, such as loss of job security and employee benefits, could be addressed with the right policy changes, but the loss of teams and company culture will be harder to remedy. That being said, it wouldn’t be completely impossible. Niche online communities now form around common interests and goals all the time, so it is possible to develop a regular set of teams that one could join and get hired as a freelance team instead of individuals. We will redefine the Idea Community not around the companies or even industries we work for, but around other things — the people we frequently collaborate with, the professional peers that we share co-working spaces with, and the people who share the same passions and hobbies.
The Impact of Automation
At this point, you’ve probably already read some thought-provoking thinkpieces and research reports on how automation will transform the way we work, so I will not waste bytes retreading the same waters here, except to add three points to this ongoing discourse.
First, COVID-19 is accelerating the deployment of automated applications, which stems from a sudden increase in public acceptance of automated services, such as in last-mile delivery and retail checkout, out of practical hygiene concerns. Much like remote work, once things are properly deployed and prove to be functional, the underlying economics will make it much harder to roll back, even when the need for social distancing no longer exists. The drones that CVS and UPS are using to deliver medicines to the retirement community in central Florida will not be grounded after the pandemic is over; instead, they will be replacing the human couriers and automating part of the consumer-facing experience.
Second, with the continuous advancement of AI, many white-collar jobs will not be immune to automation either. Many office jobs are, at the end of the day, not that creative; instead, they rely on analyzing data and crafting narratives from recognizable patterns, which tends to be a specialty of AI. (Although, the art of crafting narratives that serves particular agendas is not something that AI will likely master any time soon.) Eventually, creative work could also be disrupted by the advance in AI technology, as evidenced by some early experiments of deploying machine learning algorithms to write music or screenplays. And even though it’d be a long time before AI can replace human artists and creators, algorithms are already starting to influence creative work through its implementation on the business and market research side.
Lastly, the accelerated automation of work will further push work to become structurally distributed. After all, robots and algorithms won’t care much for the loss of company culture and team bonding. And once AI-driven automation takes over the jobs that require consistency and maintenance, for those repetitive jobs are easier to be automated, it would leave the more creative, therefore more modularized work to the freelancers. In a sense, automation will be the catalyst that truly allows companies to modularize and transform their workforce. Therefore, leaders of the future will have to find a way to manage both automated work done by robots and AI with the work done by their human co-workers.
The future of work is dynamically developing and we here at the Lab are keeping a close eye on all the innovations that are popping up to change the way we work. If you wish to start a conversation around the key trends highlighted in this article and discuss how your company can leverage these opportunities to future-proof your business, please reach out to our Group Director Josh Mallalieu at josh@ipglab.com.
