27 Jun 2019

So far in our Future of Work series, we’ve focused on how technology can open up new opportunities for businesses planning for the future.  If used in the right way, it can unlock significant benefits in terms of automating repetitive or labour-intensive tasks and analysing huge quantities of insight-rich market data.

It can also have a direct impact on how a business organises where the work is done.

In a purely functional sense, advances in communications technology mean that physical location is now less relevant for some types of work.  Many people can perform some or all of their tasks away from a centralised workplace.  They might work from home, in one of your organisation’s other offices, on a client’s site, on the train, in a cafe, from a hammock on a beach – in fact, anywhere in the world.

There are plenty of genuinely tech-enabled businesses with no fixed workplace – and that is bound to increase in the next few years.  Some organisations (such as The Hoxby Collective) have shown a real commitment to making it a model that works for them.  There are also respected commentators such as Matt Mullenweg who advocate the benefits of working remotely and how it is good for business.

And yet, if I look out of my office window in the heart of London’s financial district, I see cranes and construction activity on a grand scale.  New buildings tower above me (and we are on the 33rd floor!).  I can only assume that this is an indication of continued demand for prime commercial real estate in the Square Mile.  The picture may be different in other parts of the UK, but it says to me that most businesses still need (and want) a physical base from which to operate – a place in which their culture can thrive and their workers can congregate and collaborate.

For most organisations, having no dedicated physical base at all would be a step too far.  There are many valid reasons for maintaining an office, where employees can be managed and supervised appropriately, ideas can be exchanged (the clichéd “water cooler discussion” comes to mind) and people can learn from each other.  A significant proportion of jobs just need to be done on-site – and that will continue to be the case, even if certain types of task are eventually automated.

However, my sense is that businesses are increasingly open-minded about where their employees do their work.  Commercial rents are expensive, so there is an incentive to be more flexible, innovative and efficient in their use of workspaces.  They can see the benefits for both the organisation and the individual of certain roles being performed remotely.

So is it time to take a more root-and-branch review of how you organise where your people do their work?

Modern workspaces

If you redesign your workspace to fit your vision of what your business will actually need in five years’ time, what does that look like in an ideal world?  Would you move from your existing location?  Will you have more or fewer people working on site?  What will they need to do their jobs properly?

For organisations that are not looking to relocate in the short- to medium-term, there is much that can be done to make the most what they have.  This is not just about efficient use of space, but also configuring the workplace to encourage a collaborative, supportive environment.

Many businesses now operate open plan working or “hot desk” arrangements.  Both can split opinion, particularly if you are trying to coax employees out of their treasured private offices.  But when they are done well, they have the potential to make a really positive difference.  In my own office, we moved to an open plan arrangement about a year ago and I have really noticed the benefits.  It has enhanced our strong team ethic, created a better learning environment and increased levels of interaction between teams.  Importantly, everyone is very respectful of being in a shared space, without it creating a stilted atmosphere.

It was therefore a surprise to discover a recent Harvard study, which concluded that open plan offices actually damage teamwork and productivity, with a noticeable drop in face-to-face interaction and an increase in email traffic.  Perhaps it is human nature to find other ways to put up barriers and preserve some degree of privacy.  Without an office door to close, the next best thing is to plug yourself into music or simply to look immersed in concentration, to discourage interruptions.  It is certainly true that the collaborative benefits are reduced if everyone spends most of the day wearing earphones or noise-cancelling earmuffs.  But perhaps there are some boundaries that can be set, to accentuate the positives of open-plan working.

A similar approach can be taken to “hot desking”.  There are obvious potential benefits but it will only work in the context of a genuinely collaborative, non-proprietorial culture.  If some workers feel forced to scramble for a desk or get into work at 6am to secure their “normal spot”, it will inevitably lead to tension (and some of the individual privacy strategies mentioned above).  But it can work well, if there are clear ground rules and people are bought into the benefits of sitting next to someone different every day.

Remote working

Some employers now maintain fewer work-stations than employees (meaning that many people are required to work remotely for at least part of the week).  And this is an interesting shift in itself.  Whereas working from home arrangements used to be agreed reactively (typically, in response to a specific flexible working request), they are now being considered proactively as part of strategic workforce planning.

Remote working does, of course, come with its own challenges.  Organisations may have to work much harder at maintaining cohesive teamwork.  Advances in communications technologies are making this easier, but for many people there is still no substitute for regular in-person discussions with colleagues – whether that is to enable them to do their job better, or simply to ensure they have sufficient human contact to avoid feeling isolated.

Employers should also be clear in their expectations regarding tech connectivity, data security and confidentiality.  Ideally, employees should have a genuinely private space in which to work and a reliable, secure broadband connection.  They should also put in place the necessary arrangements for storing and disposing of confidential papers securely and appropriate protection against cyber-security risks.

International footprint

Perhaps one of the great benefits of technology is that geography is less of a barrier.  We have helped several clients explore new places to do business, weighing up the best way to set up operations in an unfamiliar jurisdiction (or whether to do it at all) and conducting comparative exercises on the pros and cons of expanding into certain countries.

Typically, there are two main reasons for organisations exploring new locations.  They may simply want a specific person with a valuable skill-set or experience – and where they are based is of less concern, as long as they can do the job.

Alternatively, the plan may be driven by a conscious desire to be in a particular country or region, perhaps to exploit a potential commercial opportunity.  Organisations expanding globally can now dip their toe into new markets without ruinous financial risk.  You might start off with one or two people working from home, using their local knowledge and contacts to test the market, without needing to commit to establishing an office base.  Or you might prefer to send an existing employee you know and trust to scope out the opportunity first and lay the groundwork for a workplace ethos that is consistent with what you have elsewhere.

These decisions are influenced by a complex matrix of issues relating to tax / social security costs, immigration, the regulatory landscape, and the cost of labour.

From an employment law perspective, it is certainly much more difficult to hire and fire in certain countries – either in terms of the employee-friendly legal landscape or underlying bureaucracy.  It is very important to do your research – and not underestimate the value of local cultural knowledge.

Long-term secondments and global mobility are often an important component of the international expansion strategy for many businesses.  However, they do need to be properly documented, with clear agreement on tax and immigration issues, any personal arrangements (for example, accommodation, relocation/travel costs and family considerations such as schooling), reporting lines and the scope of authority.  We also recommend giving some thought to an exit plan, if things do not go well.

And regardless of who you have on the ground, it is normally advisable not to vest too much authority in one person.  We have dealt with cases where an employer wished to dismiss an employee in an unfamiliar jurisdiction, only to find that he was the sole director of the local entity, the bank signatory and kept control of the keys to the office and the safe.  These are rarely ideal conditions for arranging a smooth exit!

Location – Key questions

  1. Are you making the best use of your current workspace?
  2. Will you need more or less space in the future (and how will it be designed)?
  3. Will more of your people work remotely?
  4. Would you consider setting up in new jurisdictions (or employing someone remotely in another country)? What factors would most influence where that might be?

Next time:  People – Skills, training and incentives

Read previous articles in the Future of Work series: