Despite Calls For a “Return To Office,” Remote Is Here To Stay (Part 1)
Executive Summary
When the pandemic struck in 2020, distributed workforces and virtual work arrangements had already begun embedding themselves as a permanent feature of modern work-culture.
Of course necessity is the mother of invention, but it’s also a remarkably effective catalyst — so the dramatic shift to remote work once the pandemic locked in, took off quickly. After all, it had been pretty well-tested by that time. Remote has now made its mark, and there seems to be no way of getting back to the hallowed “garden” of the traditional office. In this two-part blog, we’ll first talk about the new dynamics of remote work, how these affect supply chain work, and further consider some of the clear signs that this new model is here to stay.
In Part Two, we’ll look at the most effective strategies for approaching remote work and remote workers — and dial-in specifically to the supply chain space. We think that companies who embrace this change might well gain advantages over the RTO (return to office) stalwarts, and we’ll explain how and why.
Remote Work is Here To Stay
With deep roots already embedded, including enabling tech, and well-established work cultures for many distributed organizations, remote work has seemingly become a permanent part of work-cultures, especially within the US. It now has the status of immovable object, and so far, has outlasted even irresistible forces like the CEO’s for Wall Street icons Goldman Sachs, and JP Morgan, and tech giants like Apple, and Netflix. Some companies with big supply chain operations have also come out with FTO (full time office) mandates: Tesla is notorious for mandating workers return to the office despite pushback from execs.
JP Morgan CEO Jamie Diamond recently ripped remote work and Zoom as “management by Hollywood Squares.” It’s an amusing metaphor, but thus far, it appears to lack bite. Because apparently, remote…well, it works: According to McKinsey, 58% of workers have the option of working from home for part or all of the week. McKinsey’s not known for going out on a limb, but their research has them speaking up about remote work in pretty bold terms:
“After more than two years of observing remote work and predicting that flexible working would endure after the acute phases of the COVID-19 pandemic, we view these data as a confirmation that there has been a major shift in the working world and in society itself.”
Moreover, in an era where getting and keeping the best talent has become universally accepted as critical for success, perhaps the most notable statistic McKinsey offers is that “when people have the chance to work flexibly, 87% of them take it.”
And guess who always has that chance? That’s right: the smartest, most-efficient, most talented and successful workers…
The collision of these sometimes un-cozy facts with the desires of high profile companies and CEO’s has led to a unique moment, where some of the world’s most highly regarded business leaders seem to be…how else can we put it?…out of touch. However successful some of them might be at gathering up their flocks and shutting the doors and windows, our own instincts tell us that the winds of change on remote work will not be quieting any time soon.
Supply Chain and Remote: How Does it Work?
For supply chain management, remote work puts a focus on three important considerations that also have a combinative power – that is, they add up to a unique challenge for remote that’s bigger than the sum of the parts.
Supply chains are real-time
The reliability of in-office productivity is appealing. One suspects this is the reassurance sought by many of the high profile CEOs we spoke about in our introduction. Experience tells them that when people are in the office, their main focus (more or less) is work. For supply chain, response time is fundamental: when there’s a shipping issue or a surprise factory shut-down, it’s essential that the team takes action right away. When people are in the office, you generally have confidence that this will happen. The big question for any remote model is: can you meet (or beat) the responsiveness of the in-office model?
Supply chains are complex
There are also many issues for supply chain that require more than a single-party response. Many responses – even the urgent ones — will require input from several different people and departments: planning, logistics, customer service, etc. This is an easier problem to solve when everyone’s in the same place, and responses and decisions can be gathered by walking down a hallway. Remote work creates special needs for supply chain process management.
Supply chain work goes beyond the office
Finally, there are many front-line supply chain jobs — like those on the manufacturing lines or in the warehouses — that really do have to be done in-person. And for jobs performed in-person, it’s good practice to have administrative/managerial teams on the ground with them, for many reasons: including performance, training, and company-culture. So even in a radically distributed work arrangement, supply chain has some necessary co-locations, and usually, demands for solutions that can operate full-sail on a mobile device.
Quality People Matter, And Remote Matters To Quality People
Despite these unique and “stacked” challenges, it’s essential for supply chain leaders to find ways to meet them. We’ll talk more about how that can be done in a moment. But first, we want to re-emphasize a point made earlier about the way remote work has become a differentiator for recruiting and keeping the best people. Because as every sector has learned over the past couple of years – good people matter more than ever.
Supply chain was impacted particularly hard during The Great Resignation. Most supply chain positions are stressful jobs, with long-hours, and most of the folks who do this work rarely get the credit — or voice — they deserve. Even now, every supply chain leader I know is struggling to hire for open roles.
One of the best ways to fill those open roles more quickly is by giving people a win by letting them work remotely. In terms of attractive power, McKinsey found that flexible working arrangement is the #3 reason for finding a new job (after greater pay and better career opportunities).
As we’ve discussed, it’s also a benefit that good people won’t give up (because sought after candidates don’t have to). A whopping 32% of those surveyed by Owl Labs said they would quit their jobs if they were not able to continue working remotely. The ones who will go beyond saying this, and actually do it: they’re the ones who know they have the track record to get a new and better position.
Remote Results Have Been Very Good…
Adding even more intrigue to this picture, is the simple fact that overall business performance has actually increased while companies have had to embrace remote work. Since going remote, most companies — yes, including all of the aforementioned remote-work resistors — have charted record results. Despite the recent decline in the stock market, a majority of US companies still reported earnings growth in the latest quarter. Fact is, there’s just no wide-scale justification to say that remote work is bad for business.
The facts also have strong subjective correlation. Not only are remote workers happier, they also feel just as capable (and in some cases, much moreso). 10,000 employees surveyed by the Becker Friedman Institute for Economics at the University of Chicago said they thought they were just as productive working from home compared to working in the office. 30% of those respondents told researchers they were more productive and engaged working from home. Finally, many employees are spending more time actually working, because they’re spending so much less time commuting. This is an observation you can corroborate on almost any “rush hour” route you knew well before remote-work went global. (That is, if you still remember those routes.)
How Will Leaders Respond?
In Part Two of this discussion, we’ll discuss some of the practical approaches that have proven to be effective for companies making the transition to remote work. As our discussion thus far would indicate, most experts who’ve looked at this issue objectively, think the remote model is here to stay — but making the most of that new approach is still an open matter. We’ll dive into some ideas for how to make that transition, and how to preserve and renew models old and new, in our next entry.
