Is working from home here to stay?
Written by Jinashri Samarakoon Wijesundara
The Covid 19 pandemic drove the largest ever change in the global workplace by forcing people to work from home almost overnight! Not everybody has adapted well. Local and international studies clearly show that some are struggling to keep their heads above the water. We have seen some knowledge-based industries taking the bull by the horns and adjusting better than others. Physicians started to give online consultations and the banking industry offered more online services. A recent study spanning 9 countries and 8,000 jobs by the McKinsey Global Institute shows that there is potential for remote work but it is “highly concentrated among highly skilled, highly educated workers in a handful of industries, occupations, and geographies”, particularly, “finance, management, professional services, information sectors have the highest potential for remote work”.
The writer spoke to 9 senior executives representing 15 companies collectively employing 8000+ knowledge workers, in the software development industry, a place where change is a constant they deal with frequently, and modern management practices are put to the test regularly. Working remotely and collaborating with teams across time zones and geographies is nothing new to most software companies which might have a development centre here and headquarters in another country or is in offshore outsourcing business. That already existing experience and having access to software collaboration tools makes this industry a logical place for one to look at, for success stories. The writer found out that some of these companies embraced this new way of working fully and are now planning to adopt a hybrid model even after the pandemic.
This shift is not unique to Sri Lanka. Gartner.com predicts “by 2022, 25% of the global knowledge workforce will choose their home as the primary workplace, and 45% of the workforce will be working from home two to three days per week”
However, not everyone is singing the praises of a hybrid model. All the large companies (1,000+ knowledge workers) in the sample, were decisive on working partly from home, partly at a formal workplace. Among the medium and small companies, the opinion was divided. Some medium to small scale services companies felt it was not really adding value to their businesses. Working from home was not likely to be favoured where physical presence at a specific worksite or extensive customer interactions were required, as with some tech operations roles.
Is working from home here to stay?
Resonating the global trend, the majority of the companies in the sample were also affirmative. For some among them like Virtusa, this is not even a new concept. It was something in the works and the pandemic merely accelerated the process of its adoption.
Madu Ratnayake, EVP, Chief Information Officer & General Manager of Virtusa, a company that employs thousands of knowledge workers, points out their workforce preference to work, post Covid 19.
“50% prefer a hybrid model-partly working from home; some days at work. About 20% prefer a permanent shift to work from home to the conventional office. Other than those who work on specific engagements where they need to be in a very high security set-up, most have the flexibility to work remotely”
Companies such as Wiley, IFS, Pearson Lanka and another company anonymously contributing to the study each employing 450-1000+ knowledge workers said that majority of their employees prefer flexibility to work from home 30-40% of the time.
There were some small-scale product companies and tech startups each employing up to 20 knowledge workers, who were also in favour of a hybrid model.
Wellington Perera, Director, Cemex Software, said the software product companies he is involved in will work completely from home while those in the service businesses will work partly from home. “The service companies find it a bit challenging in a home environment. Especially the teams who are working in on-demand technical support as they face challenges due disturbances and power interruptions etc.”
Techlabs, an electronics and software startup, developing a platform that has a patent pending, employing about 20 software and electronics engineers, also said they will move into a hybrid model and is expecting that this will even help them attract high-end niche talent to their team.
Setting the employees up in a hurry in response to the lockdown had required some support from the company in some instances. IT workers need computers with high specs and to collaborate heavily with team members for their work. Companies said they needed to provide some support to the team members to fix unreliable internet connections and deliver monitors and machines where they were needed. However, none of the companies considered these to be large cost elements. The majority of their employees were used to working from home, though not extensively, and already had this necessary infrastructure in place.
Not everyone thinks it is a blessing!
Those who felt this model to be counterproductive said it is difficult for the staff to feel that they belonged to a team. To quote one respondent: “…overall we are seeing loss of productivity, staff camaraderie and morale”. Another said that their company experienced a productivity loss as the staff does not have the necessary atmosphere and ergonomics to work comfortably, experiences distractions, and lacks the self-discipline and commitment working from home requires.
Are there sizable financial benefits in a hybrid model?
In fact, several organisations said that there were! They pointed out that they observed lower real estate, utility and transport costs. Conventionally, large scale IT companies either rented or built state-of-the-art work places with recreational facilities and even creches. In order to grow they had to increase their real estate footprint. They no longer need to do that. They could either hire more people with the same space, as a large number will now work from home, or downsize (the area) and hire seats, on a need basis, at co-working spaces that provide these facilities to multiple companies.
Diyath Ariyaratne, General Manager of Pearson Lanka (Pvt) Ltd said, “We were able to reduce Operational expenditure on real estate and facility upkeep, utilities, internet leased lines etc. during the 15-month period they worked from home”
When the hybrid model comes into effect, it is likely that their operational costs per head will go below pre-covid period, as more people can be hired without increasing these facilities.
Even small-scale companies that hire seats in co-working spaces can now scale their seating capacity down.
As Wellington Perera informs “We have made significant cost savings in rent, utilities etc and in some cases scaling office space down by 50%. We also save money on sponsored accommodation for people who came from outstations”
There are significant cost savings on rent and transport costs for the knowledge worker as well. Most importantly they save the time spent on the road. According to one respondent in the survey those living in the Colombo district too have to travel 45 to 90 minutes each way to work, to central Colombo, so they save that time. He shared the experience of a team member from Galle who pre Covid was boarded in Colombo, now works from home and saves around Rs 30,000/- on boarding fees, meals and transport costs. Some of the savings might go into improving their internet connectivity.
Most of the companies that were interviewed claimed that 30-50% of their workers come from outside of Central Colombo. This accounts for between 2500- 4000 knowledge workers-adding the numbers of the companies in the sample alone- commuting to Central Colombo on a normal day.
What are the other non-financial benefits?
Many are hopeful this will enable them to hire good talent that was previously inaccessible to them, such as women who give up work to spend more time with the family, people from other geographies who are unable to, or reluctant to move to Colombo.
Nalina Wijesundara, Managing Director of Techlabs, feels that the Hybrid model will help them attract and retain high quality talent.
“A hybrid model allows freedom for teammates to manage their time between work and home. This makes their lives less stressful overall. When knowledge workers are less stressed out, they tend to perform better. Once they get used to this freedom, they wouldn’t want to give it up. Employers who offer this freedom will have a competitive edge when it comes to talent acquisition” he further clarified.
If this model will help attract more women into the IT workforce, it will not just help companies achieve their goals for inclusiveness but also find a partial solution to the lack of supply of IT workers to fulfil the demand.
Bimal Gunapala, General Manager of Wiley Global Technology (Pvt) Ltd, a recently set up captive of a multinational organisation, and an employer of hundreds of knowledge workers, says “Females in technology jobs (especially at senior levels) are disproportionately lower in Sri Lanka when you compare with other sectors. As per the workforce survey from ICTA in 2019, female employees make up just 30% of the total ICT workforce. I cannot help but think that opening up remote working and working from home culture and support will help in some way to address this. When both parents are able to work from home, it will also allow for better flexibility in managing children and others under their care. Otherwise, in our culture, we often experience that it is the female who ends up giving up their job/career to stay home instead of the male”.
Virtusa has already observed evidence to support this thinking. “Before the pandemic, we occasionally had few people leaving for personal reasons-such as getting ready to start a family, to spend time with children. I haven’t had such requests during the last year” Madu Ratnayake shared his experience of the first year of operation amidst the pandemic.
Wellington Perera who has worked extensively with university graduates says, “60% of the female applications to our companies apply for BA, QA, UI/UX roles, few apply for software engineering positions and even fewer aspire to get into the other senior technical roles. Most give family commitments as the reason. Obviously, roles such as software engineering etc have higher demands as the technology changes and steep learning curves. This means long hours at work and less time dedicated to the family. I sincerely hope this move will motivate more women to take up those roles. We need more talent in the deep technical roles in the industry!”
Will there be a productivity loss?
Most companies who were in favour of the hybrid model have had their teams working from home for the past 15 months. They have not seen an overall productivity loss. Wellington Perera said that the product development teams continued to stay focused on the roadmap and managed to achieve all of their milestones.
Nalina Wijesundara said their experience was the same and feels that his team works as hard or even harder when they are at home.
Pearson Lanka and IFS expressed similar experiences where productivity had increased during the first lockdown period, since then it has stabilised at precovid level.
Productivity loss, however, is an area of concern to those who oppose the model. A lack of discipline among employees in managing their time allocated to work, and inadequate facilities at their homes are cited as the most common contributing factors.
What are the challenges in the hybrid model and how can they be addressed?
Software professionals need to work for long hours in front of a computer. A formal office setting would provide the ergonomics required to ensure worker comfort and health. The home office would fall short in fulfilling these requirements (the right kind of chairs and tables, lighting etc.) as well as backup power and reliable internet connectivity, which most modern offices today will have by default. There are still gaps to be filled in this area for more people to work from home effectively.
All the respondents who gave detailed interviews (IFS, Wiley, Virtusa, Pearson Lanka, Techlabs and Cemex Software) also pointed out that they have continued to hire during the lockdown. Therefore, businesses in the software industry at large do not seem to have suffered a loss of revenue.
However, these new hires will struggle to fit in, or develop a sense of belonging in a virtual environment, where facetime with colleagues and management is limited to online formal interactions. Learning by observing role models at work will now be difficult. With physical presence being removed, managers too, will not be able to observe the employees’ struggles and concerns. As a solution, several have implemented a mentoring system, where a senior member supports a new employee until they have successfully integrated into the company. Mentoring is not a new concept to any of these companies; however, they have introduced structure to those existing programmes such as encouraging regular online one-on-one meetings between the mentor and the mentee.
Ranil Rajapakse, EVP & COO of Sri Lanka Operations at IFS explains that “while the hybrid approach is the way forward companies have to put effort into maintaining organizational cohesiveness and the “social glue” that keeps everything together. With less physical presence and facetime, and more online interaction, good information flow between the management and employees needs to be maintained. Managers need to put in more effort into building trust, giving and receiving feedback, developing competence, and infusion of the organization culture. Some employees may find the reduced social interaction a difficult adjustment, and this can lead to feelings of work pressure, anxiety and stress. The effects on psychological wellbeing is also an area that needs to be closely looked at in a working from home approach to work”.
IFS and other companies shared strategies that they have implemented to overcome these problems, such as encouraging scheduled informal online discussions with an included social element (for example online lunch and drinks sessions), and more conversations on learning problems or other issues employees might face.
One of the disadvantages to the employer is that some people will do multiple jobs when at home. The loyalty to one employer will be a hazy zone in their minds. This has implications not just on productivity but on confidentiality as well. Almost all the companies in favour of the hybrid model said they use outcome-based performance management models (for goal and target setting and measuring performance). An employee will be able to track how their effort contributes to their teams’ and even their company’s goals. Enhanced security, where it is crucial, will be managed partially by implementing advanced technical solutions such as biometric authentication systems, but mostly by establishing trust between the employer and the employee. Most respondents agree that managers will need to know people closely and that mutual trust and good work ethics are crucial to making this model work.
The ecosystem needs to keep up when the number working remotely increases
Internet connectivity at home was mentioned by all companies as something that affects overall productivity. Respondents felt that Internet service providers need to keep up with the demand for their services by improving their core infrastructure. Providing new Internet packages alone would not improve the situation. Power storage solutions such as high-power batteries and solar power solutions that can power up workstations and the gear of the remote workers, is another area to look at. The government would do well to incentivise those in the local electronics industry who can build those solutions.
The government could also step in to support those who can provide co-working spaces in other main cities, and popular holiday destinations where knowledge workers who are embracing the digital nomad culture can couple their holidays and work.
To conclude, working from home is an accelerating global trend. It is not ideal for every job, though, work that doesn’t require interpersonal interaction or a physical presence at a specific worksite will benefit from this model. Sensory cues, and emotional support that one receives by being physically present at work are hard to be replicated in an online environment. Therefore, a hybrid model is likely to be widely adopted, and as this is becoming a global trend, it will only be a matter of time before this will be the norm in the software development industry. Companies that adapt well to this model can make it a competitive advantage, and attract talent from distant locations without having to move the employee to where the company is. Increasing capacity for these knowledge-based companies usually means increasing their number of employees. With the same office space and seating capacity, the companies can hire more people, enabling faster growth when a considerable percentage of their employees work from home at a given time. This is a significant advantage to software companies whose main cost element, after salaries, relates to real estate. Considering all these factors, it does appear the hybrid model of working- at least in the software industry- is indeed here to stay!