I was having a Zoom social meeting with several colleagues last week and one of the questions asked, before Zoom protocol gave way to a conversation on the stunted and confused state of professional sports in America, was the impact of the Pandemic on business, and how that has, or has not increased work from home (WFH) options and remote outsourcing. There were 6 of us representing 4 industries; market research, digital media, ad agency and software. And since 6 is not representative of…anything in terms of projectable data, we all committed to speak to 10 friends in our professions and come back for a more informed discussion.
Our limited, non-scientific 60 person sample came up with the following conclusions and analysis.
Every company in each industry allowed WFH options once the severity of the virus became evident.
Each of these companies still allows WFH, but have also welcomed some employees and contractors back into the office.
Only 9 of these companies had allowed a WFH option pre-Pandemic.
A permanent WFH option is expected for 42 companies once the virus danger passes, for both employees and contractors.
All offices have all been transformed to allow for social distancing, including eliminating free snacks and allowing flex-time, moving desks and encouraging people to take stairs rather than elevators where feasible.
Only 6 companies are currently using remote software developers (2 domestic, 4 global).
Only 3 companies used remote software developers pre-Pandemic.
All of the domestic and global remote developers work for companies in the digital media and software industries (none in market research or ad agency).
Interestingly, 32 companies in 5 industries (market research being the exception) are now researching the potential use of permanent remote software resources including both US and global based.
Again, this is not a valid research project in terms of open-ended primary research projectable to either an industry or region (companies were geographically concentrated in the San Francisco Bay Area and Seattle). However, it does offer enough information on a more personal basis to begin questioning how we adjust our own organizations, relative to industry competitors and in general. For instance, 8 of the 10 contacted ad agencies reported a range of lost business, and project more as their clients cut back on ad spend. This is in line with the latest Forrester report predicting a decline of 25% ad spend for the year. Half the agencies will not bring back the entire staff this year. They have no plans for sizable remote staffs.
Software developers seem to be more optimistic, intending to fully return to normal staffing levels, albeit with about a third of staff to be remote outsource resources, including both domestic and globally based developers.
A large majority (24) of market research, digital media and software companies have plans or serious discussions regarding making WFH a permanent option for most employees and contractors. This was before the Google announcement of having employees do WFH until July 2021. So we expect more companies to feel pressure to do the same (evolution of the recruiting “perk” competition in tech?).
In summary, our unscientific yet engaging research showed that all companies are impacted by the Pandemic in terms of office structure/facilities, resource outsourcing and temporary and permanent options for WFH. This should not be a surprise to anyone. What is (mildly) surprising is the apparent lag by ad agencies in adopting more widespread WFH options and the relative lack of utilizing outsourced resources, both domestically and globally. Ad agencies are however, adaptive and creative by nature so we expect them to evolve in these areas. Software companies, as expected, were the most progressive/aggressive in utilizing remote work and especially global outsourced resources. They have done this for years and will continue to be near the forefront in this area.
The more strategic question centers on the evolution of WFH and remote outsourcing, the impact that could have on physical offices (and by default, commercial real estate) and the potential resultant pressures on compensation levels. The Google WFH announcement is significant, expect other tech companies to follow. If Google has a sizable portion of their workforce WFH then they have excess office capacity. It is easy to follow the dominoes if this model becomes the norm in Silicon Valley and other areas. And with that, even with cost savings per employee (less desks, snacks, parking spots, etc) there could be downward pressure on compensation since there is no need to pay high salaries to attract talent in high cost areas like San Francisco. This is entertaining conjecture at this point, but conjecture based on economics.
Where will your company or organization evolve along these new models? We live in a world of, most succinctly, WFH is TBD.
Steven Bustin