Why Remote Working Succeeds at Some Companies and Not Others

 

Marilu Arce

 

Marilu Arce loves her job, but for a time she considered leaving.

 

The commute from her Mokena home to her downtown office, nearly two hours each way, meant her daughters couldn’t enroll in after-school activities because she couldn’t get home in time to take them.

 

Then her employer adopted a policy permitting her to work from home two days a week, and “I feel like it changed my life,” she said.

 

Her stress level has dropped. Her daughters are thrilled that they can play travel softball. She tackles household chores with more energy. She likes her job more.

 

“It’s the best of both worlds,” said Arce, an assistant controller in the corporate accounting department at National Equity Fund, a Chicago-based nonprofit that brings investors and developers together to build affordable housing through government tax credits.

 

“If I ever thought about leaving this place, I would think twice.”

 

That’s the type of reaction Arce’s boss, CEO Joe Hagan, likes to hear as the company measures the success of the work-from-home policy it instituted three years ago in hopes of improving employee retention. So far, it seems to be working: Turnover was less than 5 percent last year, its lowest ever, dropping from an average of 8 to 11 percent before employees could work from home.

 

But Hagan is cautious. Though a growing number ofU.S.employees are working remotely, thanks in large part to technology that enables flexibility and young workers who expect it, the perk has been getting mixed reviews of late as some high-profile companies call employees back to the office for more face time.

 

Those stories “make me vigilant”, Hagan said. “I want to see what went wrong there.”

 

The most scrutiny recently has been on IBM, which in May announced it would require some of its remote staff in theU.S.andCanadato work out of regional offices. The change was particularly jarring because the technology giant was a pioneer in letting employees work remotely and in the software to facilitate that trend. Honeywell, Bank of America, Best Buy and Yahoo have made similar shifts away from remote work in recent years.

 

Skeptics wondered if the goal was to cut staff through voluntary departures, but IBM said it is building a “workforce of the future” composed of small “agile” teams that work quickly and closely in the same room to meet the demands of the constantly evolving industry.

 

To be sure, remote work is not dead at IBM. The change only applied to about 2 percent of its 380,000 employees worldwide, or roughly 7,600 people.

 

Flexible work policies top employee wish lists when they look for a job, and employers increasingly have been offering them.

 

In theChicagometro area, the population of employees who work mostly from home has nearly doubled since 2005, though it remains a sliver of the workforce. About 3.1 percent of theChicagometro area’s workforce, or 131,000 employees, worked from home at least half the time in 2015, according to an analysis of Census data by Global Workplace Analytics. That doesn’t count people who are self-employed.

 

Nationally, about 3.7 million employees or 2.8 percent of the workforce, work from home the majority of the time.

 

Studies have shown working remotely increases employee engagement, but in moderation, because there is still value in the relationships nurtured when colleagues are face-to-face. The most engaged employees are those who work off-site three to four days out of a five-day workweek, according to a report this year fromGallup.

 

“The key,” advocates of flexible work policies say, “is to match the environment with the type of work that needs to be done.”

 

“The office is becoming a place for collaboration, while home is a place for concentration,” said Kate Lister, president of Global Workplace Analytics.

 

As more employers allow people to work from home, they also are shrinking and revamping their offices to make employees excited to come in.

 

“I want to kill the notion that it’s one or the other,” said Kate North, managing director of workplace innovation and strategy at theChicagooffice of Colliers, a commercial real estate firm. “We’re working everywhere.”

 

At National Equity Fund, adopting a work-from-home policy coincided with the end of its office lease and a move to a new building. The new office is 25 percent smaller and saves $2.5 million over the course of the 10-year lease, said Gaylene Domer, vice president of facilities management.

 

The company hired a consultant and did a pilot to test the remote policy, which many managers opposed at first, CEO Hagan said. The toughest hurdle was that people used to walking over to someone’s cubicle to talk had to get used to calling or sending an email instead.

 

“Now 91 of its 176 employees nationwide work from home two or three days a week, spreading out in such a way that 22 people are out of the office at a time,” Domer said. “On their home days, employees tend to start work earlier and end later, but take longer breaks throughout the day to take care of personal business,” Hagan said.

 

“You’re always concerned people will not work as hard if they’re outside the office, which has proven here, at least, to be a fallacy,” said Hagan, who can see when people are logged in and active on the company’s work system.

 

The flexibility hasn’t hurt productivity, which is up 50 percent. There is “something lost” when colleagues don’t gather at the water cooler, but it’s outweighed by the retention and happiness gains, he said.

 

“We used to get beat up all time (in employee surveys), I think because people were angry, they were stressed,” Domer said. “People are happier now.”

 

Managers decide on a case-by-case basis whether to let people work from home, and those who are permitted have to go through training.

 

Arce said she tries to confine her work to her home office and keep it out of the family room, drawing clear boundaries as the training advised. She writes a to-do list at the start of the week for herself and her team to ensure everyone is on track.

 

Employees were warned the perk would be withdrawn if it affects productivity, but “I don’t know if I could go back,” said Arce, who has been with the company for 18 years. “I think that would be a deal-breaker for me.”

 

“When remote programs fail, it is often a failure of management, as many managers don’t know how to mentor people they can’t see,” said Colliers’ North. “Doing it right,” she said, “means setting clear expectations, evaluating performance based on results and setting protocols around communication to ensure that everyone is upholding their end of the bargain.”

 

“Employers are getting smarter about developing intentional remote work policies to avoid legal liabilities,” said Brittany Bogaerts, a labor and employment associate in theChicagooffice of Nixon Peabody.

 

She advises time-tracking tools to avoid overtime claims, written rules on safe workspaces to avoid workers compensation claims for injuries suffered at home, and uniform standards for deciding who gets to work from home to avoid discrimination claims. Bogaerts also counsels employers to remember that employees in other states could be covered by different local labor laws.

 

At Basecamp, a software company in theWest Loop, everyone works where and when they wish, though the office could fit everyone if need be. Of its 52 employees, 15 live inChicagoand the rest are spread out across 30 cities around the world, said CEO Jason Fried.

 

The point is to hire the best people regardless of where they live, Fried said, which eases competition for the local talent pool. One of his best customer service representatives lives on a farm inTennessee.

 

Twice a year Fried flies the whole staff toChicagofor a week, so that people can meet in person and socialize.

 

It doesn’t work for every hire.

 

“There have been a couple of misfires,” Fried said, remembering one new employee had trouble focusing when she moved overseas and started working remotely for the first time. “We have gotten better at figuring out whether this person will function in this environment.”

 

But Fried challenges the notion that camaraderie has to happen in person or that innovation strikes when colleagues bump into each other in the hallway. While such interactions can be valuable, they can also be costly distractions.

 

“There are these myths around spontaneous brainstorms,” he said. “Those big ideas also happen in the shower.”

 

Some companies with traditional office environments are OK’ing radical remote work arrangements to attract and keep good talent.

 

Erin Escoffery, an associate at law firm Taft, is still writing research briefs while traveling abroad for a year with Remote Year, a Chicago-based company that organizes groups of professionals to visit 12 different countries over 12 months while they keep their jobs.

 

Remote Year caters to the desire among millennials to have “transformative life experiences” before settling down, said founder Greg Caplan. The company offers co-working spaces with Wi-Fi at each landing spot and helps people make the pitch to their employers about why they should be allowed to go.

 

Escoffery’s law firm, based inIndianapolis, prides itself on having an open mind to employee requests, said Ralph Caruso, a Taft partner and co-chair of the firm’s associate advancement and recruiting committee. Given the nature of Escoffery’s job and her good track record, the firm decided it was no cost to let her globe-trot.

 

Escoffery’s billable hours have stayed consistent, and Caruso expects the experience will give her fresh perspective that will ultimately make her a better lawyer.

 

Escoffery, who started her trip in March and has visited Croatia, the Czech Republic and Serbia among other lands, said she goes to the co-working space early to get in eight hours of work daily, and makes sure she’s checking her phone and email during off hours as well.

 

With the promise of adventure, “you’re definitely more motivated to get the work done efficiently.”