Remote working: what can department stores learn from the great RW experiment?
Companies have been exploring the possibilities of remote working for many years. In fact, remote work has even, in some cases, been implemented then abandoned. Department stores have been forced into remote work by the current pandemic. Or at least some of the department store functions have been. Is this likely to become a permanent feature of our retail businesses? If so, what might it look like in more detail? Remote working has raised major issues for HR departments, as well as for management. If the practice becomes widespread, remote work will also have implications for city life and consumer spending more broadly, and therefore on department store customers.
A breath of clean air blowing through the cities
The silence and clean air of recent lockdowns in major cities have been partly due to a significant number of employees working from home.
With the coming of a (hopefully) viable vaccine, is it likely that remote work will continue? According to McKinsey international surveys of different jobs, some 20% of the workforce could work as effectively from home as from the office, 3 to 5 days a week. This would mean
https://www.iads.org/files/pmedia/public/r6491_9_mckinsey_gi-whats-next-for-remote-work-v3.pdf
r6491_9_mckinsey_gi-whats-next-for-remote-work-v3.pdf
. Research from S&P Global Market Intelligence claims that 80% of organisations have implemented or expanded work from home policies and 67% expected these measures to stay in place permanently or for the long term (Candezent, Covid-19 and the retail industry, December 2020).
The effect on urban economics, transport, and consumer spending would be significant. Before Covid, around 5-7% of the workforce worked from home. A shift to 20% would, for example, lower the number of commuters with consequences for transport, petrol/gas sales, auto sales, restaurants and retail. Figures for office vacancy in the US would shift from 16.8% currently to 19.4% in 2021 and 20.2% in 2022. As an example, the sports retailer REI has already decided to sell its new headquarters in Washington before even moving in. It has decided instead
r6571_9_washington_post_rei_plans_sale_of_brand-new_campus_as_i...pdf
across Seattle. (Washington Post) Some argue that
r6484_9_the_atlantic_the_workforce_is_about_to_change_dramatically.pdf
on politics also.
The battle for the office
There are two extreme views of office work:
a) It is a place of pressure, constant interruptions, sometimes harassment, and often low productivity; against which home working is seen as autonomous, happy and in many cases more productive.
b) The office is a place of human contact, creativity, cooperation, empathy and an equaliser. Home working in contrast is an unwelcome and unmanageable merger of public and private, to the detriment of both, added to which it has none of the facilities which make office work efficient.
Some companies have tried and rejected distance working. For example, Yahoo abandoned it in 2013, citing the damage to company culture. IBM abandoned it the same year. Facebook has recently signed a new lease on a big office in Manhattan; and Bloomberg is reportedly offering an extra £ 55 a day to get its workers back to its building in London.
On the other hand, like REI mentioned above, Pinterest has paid out $ 90 m to end a new lease obligation on office space in San Francisco to create "a more distributed workforce". (see The Economist articles:
r6494_9_the_economist_the_future_of_the_office_-_covid-19_has...pdf
and
r6495_9_the_economist_the_future_of_work_-_is_the_office_finished____leaders.pdf
).
The classic office is pretty much a relic of the 19th Century, designed for control and surveillance, and dominated by the clock and the time employees sell to their companies. Changes in the office have broadly been limited to a choice between separate offices or open space. And the choice has been largely dictated by economic and cost factors rather than by efficiency or effectiveness criteria. (The same can be said of "hot desking".) Whatever happens, it is clear that the "office" as it exists today is in need of serious reform; and this means more than just ping pong tables, bean bags and unlimited fruit juice. Arguably, even ApplePark and Googleplex, which are used to lure talent to their office worlds, are merely more sophisticated versions of the same thing (see for example, the novel The Circle by Dave Eggers, and the movie). The Vitra CEO illustrated this view at a conference attended by IADS last September, by opposing cost & control-focused companies (where the work environment is not that important) to creativity-focused companies (where she sees an opportunity for her design company to improve the workspace).
The great divide at work
r6485_9_mit_four_principles_to_ensure_hybrid_work_is_productive_work.pdf
(mixing both remote work and physical presence)**. It is the case not only that some industries are more suited to remote work than others, or that some companies have decided one way or another for strategic reasons, but that different functions may be able to adopt distant practices more easily than others within the same industry or company.
Amid a great deal of uncertainty and differences of opinion, it remains that within retail, and department stores in particular, there is clearly a face-to-face function involved in selling which has to remain mostly physical (even though an increasing number of sales jobs are being advertised as remote – see <https://www.flexjobs.com/jobs/telecommuting-jobs-at-neiman_marcus>) or Container Store (repeatedly voted one of the "best places to work"). The fact that many surveys consider retail to be one of the least likely industries to shift to remote work is undoubtedly because the figures are skewed by smaller independent retailers. Chains and indeed department stores
r6493_9_facttank_working_from_home_was_mostly_an_option_...pdf
.
Other jobs in retail that require physical presence may include fulfilment, and warehouse tasks. It was suggested by the last IADS Academy, that the finance function in department stores is probably the one that could most easily be carried out at a distance. In fact, according to
https://www.iads.org/files/pmedia/public/r6491_9_mckinsey_gi-whats-next-for-remote-work-v3.pdf
r6491_9_mckinsey_gi-whats-next-for-remote-work-v3.pdf
amenable to distance working, retail would include elements at both extremes such as handling data at the remote end of the continuum, and handling goods at the other end where physical presence is necessary. The
https://www.iads.org/files/pmedia/public/r6570_9_retail_week_retail_and_future_of_work_report_.pdf
r6570_9_retail_week_retail_and_future_of_work_report_.pdf
has been highlighted by the current pandemic. And the future of this group
https://www.iads.org/files/pmedia/public/r6492_9_korn-ferry-whats-next-for-sales-talent.pdf
r6492_9_korn-ferry-whats-next-for-sales-talent.pdf
.
However, such a situation divides a workforce, for example into those who work from home, all the time or perhaps several days a week, and those who make a regular commute to the office or the warehouse or the store. It means, within a retail company, a division between those who commute and those who don’t; those who are under classic physical supervision, those who are monitored digitally and those who have more autonomy. For the present it also means between those who are exposed to the virus and those who are not. At both Walmart and Amazon, warehouse and DC workers
r6490_9_wwd_walmart_amazon_workers_seek_pandemic_hazard_pay.pdf
. This is the kind of challenge faced by HR and management in our companies.
Big challenges for department stores
There are many challenges for companies which shift into the "hybrid-remote" world.
- Hybrid workforce: as illustrated above, some groups of employees will not have the option of working from home. This may create resentments over what may be perceived as a perk for some but not others even if they see their company saving on real estate and office equipment and utilities while remote employees are picking up extra costs for these items themselves. (Several companies including Twitter and Slack are
https://www.iads.org/files/pmedia/public/r6488_9_wired_silicon_valley_rethinks_the_home_office.pdf
r6488_9_wired_silicon_valley_rethinks_the_home_office.pdf
after
r6489_9_the_conversation_remote_work__employers_are_taking_over_our_living_spaces_and_passing_on_costs.pdf
.)
- Shift in work culture: there is no doubt that remote working is a very different experience from daily presence in an office. A company or team culture needs to be built digitally as many companies have experienced when hiring and onboarding virtually during a lockdown. Not only does this require a different type of leadership, but it also requires every employee to build a "digital identity", in the same way that employees construct a physical identity in face-to-face contact in an office.
- Management, communication and autonomy: employees are likely no longer to be paid on the basis of the time they spend in the company but on the tasks they accomplish. It is perfectly legitimate to take a break to get lunch for the kids while working from home as long as the job gets done. Performance evaluation and compensation therefore need to take this on board. Also, the whole set of skills which were appropriate for communication in an office may no longer be so at a distance. Informal communication needs to be created anew. Communication through meetings takes place both synchronously and asynchronously, in particular if meetings are conducted online and with distant geographies.
https://www.iads.org/files/pmedia/public/r6487_9_steven_furnell_home_working_and_cyber_security.pdf
r6487_9_steven_furnell_home_working_and_cyber_security.pdf
r6485_9_mit_four_principles_to_ensure_hybrid_work_is_productive_work.pdf
r6486_9_mckinsey_how_companies_can_make_remote_working_a_success.pdf
.
r6484_9_the_atlantic_the_workforce_is_about_to_change_dramatically.pdf
https://www.iads.org/files/pmedia/public/r6483_9_the_great_dispersion_galloway.pdf
r6483_9_the_great_dispersion_galloway.pdf
?
Conclusion: get ready for a hybrid work future
https://www.iads.org/files/pmedia/public/r6569_9_hbr_work_from_anywhere.pdf
r6569_9_hbr_work_from_anywhere.pdf
In general, it would appear that once employees are engaged with the idea,
r6481_9_hybrid_working_calls_for_patience_and_ingenuity___financial_times.pdf
. However, department stores need to be able to cater for both sides and be prepared to go hybrid. Just as we have had to integrate different channels selling to our customers, we may need to learn how to integrate remote and present workforces to produce a seamless working environment which answers the demands of the future company.
Credits: IADS (Dr Christopher Knee)
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