The COVID-19 pandemic compelled businesses to transition to a distributed workforce model over the last year. According to a Gartner survey, More than 80 percent of organizations encouraged or required employees to work from home due to the pandemic. With the pandemic’s end in sight due to vaccine distribution, there is wide speculation on how companies will resume operations. What will offices look like post pandemic? Here’s a glimpse of how top HR leaders are thinking about the future of “centralized offices.”
While leading a CHRO search for a Fortune 300 multinational ecommerce platform, Carpe Diem Global Partners had the opportunity to speak with Fortune 500 public company top HR leaders over the last 3 months, regarding the impact of the distributed workforce on their businesses and their organizations’ plans after the pandemic subsides. These public multinational leaders represented Consumer, Technology, Transportation and Hospitality verticals. While some organizations indicated they will require employees to return to the office full-time when the situation allows, the vast majority see advantages to continuing remote-work arrangements. In speaking with dozens of these top HR leaders, three overarching themes became abundantly clear.
Employers and employees like the flexibility
Both company leaders and employees like the flexibility of a distributed workforce. For businesses, a distributed workforce can dramatically reduce the costs associated with maintaining an office headquarters and may help streamline operational processes and systems. It also provides access to a larger hiring pool; instead of being limited to their immediate geographical area, businesses can look for candidates virtually anywhere based on the particular talent they’re seeking. “The distributed workforce model is opening up a huge talent pool,” said one leader. “We’re able to find better skills, faster” and frequently at lower costs.
For their part, associates enjoy the scheduling and commuting flexibility working remotely provides and the greater control it gives to work-life balance. Location independence also means associates can move to another area when change in circumstances shifts priorities; they can relocate where the cost of living is lower, personal hobbies are more greatly enjoyed, there’s access to better school districts, or they’re closer to extended family members in need, without leaving the company.
But these factors benefit the employer as well. Studies have made clear that happier workers are more productive. And the ability to adjust an employee’s compensation based on the cost of living in the area in which they live can result in considerable savings.
These factors also benefit the organization’s ability to recruit diverse talent. HR Leaders are actively having these discussions on a global basis. Furthermore, from a talent pool perspective, building a virtual platform gives our clients the opportunity to tap into more diverse leadership talent pools, allowing executive candidate slates to be exponentially more diverse for critical leadership roles. “The distributed workforce model has allowed us to work effectively in a virtual environment, driving home the point that our talent can work remotely and be just as effective and productive,” stated one leader.
The future is hybrid
Most workforces will never be completely remote. Some percentage of employees and/or functions will be required to work on-site full time due to the nature of their roles. The rest will shift to part- or full-time work-from-home arrangements for the foreseeable future.
This new hybrid approach will force an evolution of the workplace. Offices will become more like collaboration hubs, replacing desk-and-chair layouts with more huddle rooms, unassigned office pods, and lounge spaces. For remote workers, office visits will become more intentional. These employees will go to the office for face-to-face vendor meetings, cross-functional team projects, brain storming sessions, or to socialize with colleagues rather than to do their daily work. One leader who said their business is moving to a “virtual first” remote workforce noted, “If you don’t do it, you won’t be competitive anymore.”
Tax nexus is more complicated
While business leaders are seeing many benefits in a distributed workforce, they also recognize that a workforce that crosses city, state, and national lines has significant tax implications. Many cities assess taxes based on where a company’s employees are working. As more people work outside the home office’s city limits, there’s a chance companies are unknowingly underpaying or overpaying taxes. Further, an employee can open a company to risk if they relocate temporarily without telling their employer because different states and countries have varying thresholds for how many days someone can work within its borders before the company owes taxes. Organizations will have to understand these nexus implications to shape a remote work compliance policy to their needs.
It’s abundantly clear from our conversations that distributed workforces will outlast the pandemic. And while most companies will return to the office in some capacity, they won’t go back to the old way of working. We believe the key to successfully implementing a distributed workforce will be in large part dependent on the function, technology utilization and culture. To that end, existing cultures will need to be tweaked and social interactions reset for how work gets done. And that takes us full circle back to how leadership interacts with a distributed workforce…
One top HR Leader for a global public company shared, “I am super excited about the possibilities to engage with more diverse talent, maximizing the lessons learned from the distributed workforce model. We are as equally productive and can successfully meet goals in a competitive changing environment functioning in the hybrid model.”
These market insights from Carpe Diem Global Partners are gathered from the firm’s extensive client work leading Board, CEO, CXO, and CHRO executive search engagements for public and private multinational companies. For deeper, custom insights, contact Jeff DeFazio at info@carpediempartners.com
Meisha Sherman is Global VP, HR and Corporate VP Diversity & Inclusion at Envista Holdings Corp, a global public, dental products company and ex Danaher business. She is also a member of the California State Board Council, SHRM. Meisha has over 25 years in progressive roles in the HR function of large and mid-cap size global organizations, where she provides strategic human resources solutions in alignment with key business priorities, strategies, and objectives.