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Remote working is typically characterized by the stigma of what people think it is rather than what it actually is. Working in an office has had its merits for a long time no doubt, the reality is that an office is a remnant of the industrial revolution that understands none of the technological trends that have driven the rise of remote working today.
To understand why, one must analyze current remote work trends under a lens that objectively views the cons of working at an office and the significant pros of working from home for both, companies and workers.
Let’s focus on two massive office working cons first — lower productivity and high, and rising, office real estate cost.
Open offices signal collaboration and productivity to investors or prospective hires. The sight of lots of people moving around in a bright, colorful space that hums with activity certainly signals positive qualities about a company, right?
Never mind that it’s detrimental to nearly everyone, specially those on a maker schedule, as Paul Graham posits.
Likewise, individuals in an office environment where they have no quiet space or privacy feel obligated to scurry around, without time to think, pause for lunch, or take a break. It’s all about looking busy, not about getting work done.
In so many offices being present is equated with working. The bigger and more chaotic the office, the more your actual productivity is obscured. Often, your only real solution to signaling your value is increasing your visibility. You might not be doing much — gossiping with colleagues, drinking endless cups of coffee, and taking long lunches — but you are physically present. You are signaling your desire to work and your commitment to the company.
It would be much better for you and your company if you spent less time at the office, but with more of it being tangibly productive.
Office Real Estate High Costs
Punitive, complex leases. Terms that lock you into the space for at least five years. Landlords who seem to find pleasure in lawsuits. Time-devouring tours of far-flung spaces, working closely with designers to ensure the space matches your culture, getting the IT right.
The oppressive to-do list goes on and on. And 18 months later, growth has been so explosive you need to move again. Good luck breaking the lease without extreme financial distress. And then, of course, begins the next bewildering and expensive adventure in finding new office space.
In San Francisco, a town synonymous with innovation, real state has been trapped in the past. The buildout for a 20,000-square-foot space might cost $4 million for paint, furniture, construction and branding.
Here is a breakdown of average office costs for a 100 employee company for example. Average office rent in midtown Manhattan is $75 per Sq Ft/Year ($80 in SF), and typical space allocated per employee is 150 sq. ft, totaling 15,000 sq. ft. Average Manhattan rent is $1,125,000 per year, or $93,750 per month (10 year lease). Add a 3 month security deposit of $281,250.
6 months later the same company grows to 120 employees, with expectations to grow to 200 by end of year so it leases a new space for 180 employees, or 27,000 sq ft. New rent is now $168,750/month and new security deposit is $506,250.
The money lost on subleasing the old space for 20% less than rent is $225,000 per year for life of the lease. That’s $2,250,000 wasted over total life of lease. The above figures don’t include attorney fees, build-out costs, furniture, moving costs, etc. It’s operational time and a tremendous amount of money out the door!
Office heartache has been an unavoidable part of business for generations, stealing-away hard-earned capital that otherwise would be used to build commercial success — better tech, a bigger sales team, more marketing muscle.
Remote working is putting money back into balance sheets, while simultaneously eliminating the frustrations, constraints, worries, profound time investments and massive money waste that come with traditional office work environments.
For smart tech companies, and most companies are tech companies today, its not about where you work from, it is about what you get done no matter where from.
Ironically, the only thing holding back remote working in most companies starts and ends with trust. How can we trust people to do the work they need to do when we can’t keep our eyes on them every second of the day?
Disciples of this school of thinking have obviously never witnessed the time wasted by people each day in an office setting or witnessed the amount of time spent on tasks unassociated with the productivity of their job description. (See Lower Productivity above).
Remote working begins with an assumed level of trust and autonomy that the people you hire possess the capability and mentality to get their work done. The fact is, if you can’t trust your team you shouldn’t have hired them in the first place.
Remote working is still in its early stages though. There will continue to be naysayers and allegations of unsustainability from people who have never given it a chance. The inflection point has already occurred though.
At this point, companies of all sizes are implementing remote work policies. A number of forward-thinking companies have quietly grown to hundreds — sometimes thousands — of completely distributed employees working from all corners of the world, with no physical office to speak of.
We can speculate that we are a recession away from a major shift in office work, where companies will realize the money they spend on office space is the most unnecessary expense on their balance sheets. In the same way that Airbnb has impacted the hotel industry by redistributing capacity to the homes of people willing to rent it out, remote working will do the same things to offices where capacity will be redistributed to workers’ homes.
Companies who embrace this quickly will thrive, giving themselves the chance to attract, retain and engage world-class talent while expanding their margins and reducing their costs.
For workers the benefits are clear. The opportunity to have full control over where workers live while escaping the need to waste, on average, 7.5 hours commuting to work each week, results in a higher quality of life. The opportunity to live in lower-cost areas, while spending more time with the people they love is the most promising formula for the highest possible quality of work we are able to create.
Remote working will continue to grow as more workers want to operate remotely and more jobs are able to be done that way. Tools that enable this will continue accelerating this transition and within 20 to 30 years the majority of people will be remote workers.
Companies will be more effective, agile and able to adapt to macro economic swings with ease. Productivity will increase, happiness will increase, and workers will find more purpose and meaning in their lives as they are freed from the imprisonment and constraints that office work puts on their lives.
GroWrk is productizing remote working with a flexible, smart, and affordable subscription rental solution that brings optimal ergonomic work spaces into the homes of distributed teams, directing productivity back into the business and unlocking capital to focus it where it matters — your company´s growth.