It’s been nine months
A reader recently commented on my post from 15 July last year where I expressed my scepticism about a return to normal once the pandemic subsides and challenged my predictions. So, even though it is probably too early to tell how the world will look like after pandemic since the vaccines are being rolled out as we speak and we are in the middle of a third lockdown in many European countries and only gradually opening up in the UK.
But when I came across the results of the KPMG 2021 CEO Outlook Pulse Survey, I noticed some interesting shifts in opinions. The survey asked 500 CEOs in 11 countries through February and March about their outlook for business in 2021 and the new reality they will face after the pandemic.
Given the ongoing pandemic and the relatively slow rollout of the vaccine it isn’t surprising that most CEOs expect their business to return to normal only in 2022 or that their business has forever changed. However, the changes are not the ones they may have predicted a year ago. As I mentioned in my previous post, many CEOs thought they would reduce office space and rely much more on work from home arrangements or create entirely virtual teams. But now only 17% of CEOs say they expect to reduce the office space they occupy, down from 69% in the last survey done in August 2020. That is a dramatic shift away from plans to reduce office space and rely more on remote work. Similarly, just 30% of CEOs expect that a majority of their employees will work from home two to three days per week. It seems even this kind of flexible work arrangement is not too popular with CEOs at the moment. Given the variability of CEOs intentions, we shouldn’t take the survey results too seriously, but it indicates that work from home has lost a lot of its appeal in recent months.
Of course, CEOs are just one side of the equation. What do employees think? Microsoft surveyed more than 30,000 people in 31 countries and looked at signals in LinkedIn to assess the changing habits and preferences of workers. And the results are very ambivalent. On the one hand, 73% of workers say they want flexible work conditions to continue after the pandemic. But 67% of workers also said they want more in-person time with co-workers. The workers who miss in-person contact the most and are struggling the most with remote work are the ones that are younger and less advanced in their careers as well as frontline workers where personal interaction with customers is an important part of their job. For example, while only 39% of business leaders say they are struggling with current remote work conditions, 60% of Gen Z workers (aged 18 to 25) say they are struggling as do 64% of workers who have been in their company for less than a year. Not being able to interact with your colleagues in person is a key part of learning on the job and building your network and remote work has clearly impeded this.
At the heart of my argument against remote work was my anticipation that creativity and productivity will decline if we continue to work remotely. Microsoft’s analysis of Teams meetings indicates that this is already happening with meetings taking place mostly within close networks we interact with very frequently and less and less with broader networks of people we interact with less frequently. This breaks the flow of information and ideas across teams and reduces creativity and productivity in the long run.
Teams are becoming more siloed
Source: Microsoft
All of that means to me that the fears about crashing office rents are clearly overdone as are the hopes that digital collaboration platforms like Slack or Zoom will take over the world. They will inevitably become more important but nobody should expect the gains these platforms made in 2020 to be permanent.