As communications have improved and productivity platforms like Slack have made it easier than ever for scattered team members to stay in touch, virtual working has started to look like the revolution the gig economy needed. More than a third of the US workforce has said that they have telecommuted and the World Economic Forum has described flexible work both as a “general trend” and “one of the biggest drivers of transformation of business models in many industries.”
But despite the apparent ease with which freelancers and others can now exchange plans and manage projects at a distance, a number of companies—some of them former leaders in virtual working—are stepping back from the practice. In this post, we explore which companies have called their workers into the office and what the retrenchment means for the future of flexible work.
Yahoo Shouts Out The Benefit Of Office Work
The biggest move came in February 2013 when Yahoo’s CEO Marissa Mayer issued an internal memo that called employees back into the office. A company that had allowed staff to work from home, but was now struggling to compete, had decided that virtual working was one of the reasons it was falling behind.
“To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side,” the memo declared. “That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.”
The reaction to the change in work was mixed. Some people regarded it as a regressive step that would make working at the tech company harder for women, for parents and for others. But eight months later, Yahoo was reporting measurable improvements in the way that it worked. The company retained its cubicles but added stand-up desks and scrum boards for agile workers. According to Fast Company, the move improved efficiency by 3 percent, adding about $150 million to Yahoo’s value.
Best Buy Turns Rows Back On ROWE
A month after Yahoo gave virtual working a thumbs-down, Best Buy also called its corporate staff back into the offices. The company had been one of the pioneers of the Results Only Work Environment, or ROWE, a management system that emphasized delegation and allowed staff to work any way they wanted provided they delivered results.
For Best Buy’s CEO, the results didn’t justify continuing the practice. ROWE, said Hubert Joly, was too restrictive and provided gave supervisors of absent workers too little oversight for best management practice.
“Depending on the skill and will of the individual, the right leadership style may be coaching, motivating, or directing rather than delegating,” he wrote in the Star Tribune. “A leader has to pick the right style of leadership for each employee, and it is not one-size-fits-all, as the ROWE program would have suggested.”
For Best Buy, staff under management need to be constantly under the eyes of their managers.
Reddit Looks For Better Results
If any company would be on the cutting edge of new methods of working, you’d think it would be Reddit, the firm that reinvented the forum. But in 2014, Reddit announced that it was closing its offices in Salt Lake City and New York City, and requiring staff in those offices, as well as people working remotely, to relocate to the San Francisco Bay area. Anyone who couldn’t make the move would be out of a job.
In a post on Quora, Yishan Wong, Reddit’s CEO, explained that the move was not a complete repudiation of remote work, which he said had produced “good work” for Reddit, but a pragmatic move based entirely on results.
“[S] eparation has kept us from effectively being able to coordinate as well as we needed to on a full-company level,” he explained. “Big efforts that require quick action, deep understanding, and efficient coordination between people at multiple offices just don’t go as well we (and our users) needed… [D]espite the emails, messaging, IRC, phone calls, Skype, online project management tools, and even liberal in-person travel policies … [t]here were too many times when we just needed to be able to walk over and tap someone on the shoulder and discuss a complex issue in-depth, right away.”
Aetna Looks For Better Collaboration
While the shift away from virtual working started several years ago, it hasn’t stopped. In 2016, a number of companies told staff to start commuting, often in the name of greater collaboration.
Insurance company Aetna used to highlight its flexible work practices in its recruitment material as part of the benefits available to employees. Google might have foosball but at Aetna you could work from home in your pajamas.
People did. Of the 7,000 staff the company employed in Connecticut in 2013, no fewer than 3,000 of them were able to work from home. Three years later, the picture changed. As part of a cost-cutting program that also included early retirement and layoffs, Aetna told managers who live within 50 miles of an office that they needed to come into work. Other staff were put on alert that they too would be swapping a home office for a cubicle “with the goal of increasing collaboration and driving innovation.”
Honeywell Finds Telecommuting Isn’t So Sweet
Collaboration was also the reason that Honeywell’s CEO, Dave Cote, gave for ending telecommuting for everyone but sales staff. In a letter signed by company executives employees not in sales or field service were told that they needed to be at their assigned Honeywell location and “no regular work from home arrangements within [their department] are permitted” without approval. “Working from home should be a rare occurrence to accommodate legitimate individual circumstances” that happen only “a few days a year,” the company warned its staff.
Honeywell argued that coming into work fosters teamwork and idea-sharing, leads to faster decisions and allows the company to respond more quickly to changes in the global market.
The response inside the company wasn’t universally warm. The Star Tribune quoted one anonymous employee describing the move as “right out of the dark ages and driven by one egomaniacal CEO’s need to control and bleed every last bit of soul out of the company.”
IBM Ends The Remote Terminal
IBM was one of the first companies to allow its employees to work remotely. According to Quartz, the company first installed remote terminals in employees’ homes in the 1980s and allowed as many as 40 percent of its 386,000 employees to work from home in 2009.
But IBM has also become one of the latest companies to row back on its virtual working. In March 2017, Michelle Peluso, the company’s Chief Marketing Officer, announced that IBM would “co-locate” its US marketing department. The department’s team of 2,600 people would now have to work “shoulder-to-shoulder” in six locations across the country. Staff used to working from home would need to commute; others would have to move. The marketing department, where team members were used to “meeting” through conference calls, wasn’t the first to be called into the office and it wouldn’t be the last.
Not all staff were disappointed by the change. Quartz quoted one employee who had been asked to move describing the thrill of an office presentation:
“I think that getting everyone in a room, hashing it out, throwing it up on a whiteboard is my preference rather than doing share screens. People pay attention so much less when on the phone.”
Even that employee, though, said that she would be leaving IBM rather than move.
Virtual Working: A Lifestyle In Flux
Reports over the last few years of a series of large firms cutting back on their willingness to allow staff to work from home—or anywhere else—suggest that virtual working could be in trouble. If, after years of experimentation, companies as large and technologically astute as Reddit, Yahoo and Honeywell have found the practice to be inefficient then maybe we should be able to say that it was a test that failed.
When staff are scattered across hundreds of miles and work alone, it’s harder for ideas to be shared and decisions to be made. The kind of serendipitous meetings and chats that have persuaded Facebook and Apple to create enormous open work spaces just can’t happen when everyone works alone in their spare bedrooms. Nor does everyone benefit from a manager who can’t see them, provide them with feedback or motivate them to work harder. When Yahoo announced its end to flexible working, the expressions of shock and horror were mixed with some quiet cheers, especially from those who did make it into the office but then struggled to track down other team members working their own hours. Yahoo, they said, had become slack and too many telecommuters were using the benefit of working at a distance to slack off.
But while the challenges of encouraging collaboration and managing staff in virtual teams are becoming increasingly clear, so the benefits of telecommuting have also been highlighted over the last few years. The flexibility has proven to be a useful tool for recruiters competing with other firms for employees. Being able to employ staff in distant locations has enabled companies to broaden their talent pools and increase the size of their footprint; through virtual working, even a company with just a handful of staff can become an international corporation with “offices” around the world. And at a time when Silicon Valley is under pressure to bring more women both into development positions and the boardrooms, a move that makes it harder for parents to be home when the kids come back from school feels like a backward step.
That’s one of the reasons that while Marissa Meyer may have forced her company’s employees to head back to the office, she followed up that policy by awarding new moms four months of paid maternity leave, a benefit also offered by Facebook. (Fathers receive only eight weeks of paternity leave at Yahoo.)
According to Cassidy Solis, a workplace flexibility program specialist at the Society for Human Resource Management, despite those retrenchments, virtual working continues to increase and may now reach as many as two-thirds of companies. In practice though, much depends on what exactly is meant by “virtual working.” Some companies might allow employees to work from home occasionally to look after a sick child, for example, or during the summer break, or when they have to complete a project that their managers trust them to work on without the distractions of a noisy office building. For others, virtual working might mean that the company has no office at all and its entire workforce has never met except through a screen and video chat application.
In the end, as Yishan Wong noted, each company has to decide how the balance between the benefits of virtual working and the costs of not being able to meet evens out for them. Companies that favor collaboration over flexibility and fast decision-making over independence will need to consider following Yahoo, Reddit and Aetna back into the office. Businesses that prefer individuality to teamwork and a wide choice of talent over the limits of location can stick with virtual working… and beat the big companies at their own game.
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