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Erik Weber was not a believer in remote work. At least before the COVID-19 pandemic hit he wasn’t.
Weber, managing partner for solutions at Health Champion, helps lead product development teams and has consulted with major companies on using scrum processes. He places an emphasis on small, self-organized and managed teams having the freedom and authority to solve problems.
A Chicago-based digital health analytics company, Health Champion has grown to 80 employees in two years with 60 of them working on product development.
Prior to the pandemic, an average day for Weber’s teams would include a brief meeting in the morning to make sure everyone understood what work needs to get done. From there, the team would constantly communicate about their work with conversations organically popping up and different team members being brought in as needed.
In his consulting work, Weber, who is based in Milwaukee, has convinced Fortune 1000 companies to change how they handle HR and facilities management to facilitate in-person collaboration. He’d rather see a conference room filled with 15 coders working together with no distractions than it hosting an executive board meeting.
“That’s the kind of stuff I really believe in, so this whole COVID thing had me fairly freaked out in the beginning because I’m not a huge believer in remote work,” Weber said. “But I’ve learned a thing or two.”
Weber still believes in-person communication is better, more efficient and more productive, but he said the available technology makes it possible for teams to still get their work done and his data show the team is no less productive.
“Which surprises me, I would not have bet on that because I’m a believer in in-person,” he said.
After shutting down its office when the pandemic hit, Health Champion made the decision in July that it would not be coming back. It will be a remote company moving forward.
Companies across southeastern Wisconsin and everywhere else in the United States are facing similar decisions. At some point, hopefully, the pandemic will be brought under control. When that happens, will employers ask employees to return to the office or will remote work remain the norm?
Real world and regional impact
Whichever decision employers make, there are important implications for their companies, their employees and the region.
It also is not a decision being made in isolation. More employers across the country are already planning to increase the amount of remote work they allow, which only adds pressure in the competition for talent.
The real world implications of those decisions, beyond where someone sits to do their work, are already showing up.
Milwaukee-based architecture firm Kahler Slater always had flexible work options but it now anticipates around 80% of staffers will be in the office on any given day. The shift led the company to occupy about half as much space, around 15,000 square feet, when it decided to move to the BMO Tower from the ASQ Center, both located in downtown Milwaukee.
In Racine, Twin Disc chief executive officer John Batten said the company is assuming 50% to 75% of employees will be coming in to the office, and the ability to work remotely helped push the company to put its headquarters up for sale and plan to consolidate operations in its two other Racine County facilities.
“I think most all major corporations, ours included, are going to need less office space,” Gale Klappa, executive chairman of WEC Energy Group, said during a recent earnings call. “The question then becomes how much remote working will remain after COVID is finally conquered.”
The We Energies parent company has already seen the effects of people spending more time at home as its Wisconsin residential customers have used 6% more electricity this year while small commercial and industrial customer volumes are down 4.4% and large customers are down 7.1%.
A rise in remote work will shape more than electricity use.
At a regional level, there are important questions for economic development. Southeastern Wisconsin companies will increasingly be able to draw their talent from everywhere, potentially making them financially stronger, but not necessarily growing their local employment counts. At the same time, employees in the region will have increased freedom to work for companies outside the region, potentially cutting into the so-called brain drain that has plagued the state.
“I’m a bit skeptical of the idea that COVID-19 is going to completely remake economic development and corporate real estate, but that said, it has exposed and really probably accelerated some trends that were already afoot,” said Jim Paetsch, vice president for corporate relocation, expansion and attraction at Milwaukee 7, a regional economic development organization.
Paetsch pointed out that companies have for years allowed some of their talent to live wherever they would like, but acknowledged the practice could increase following the pandemic. If it does, it poses tough questions for economic development professionals who measure their success on job creation and capital investment.
“What is the value of a job to us in southeastern Wisconsin if, yes, that company is here in the region that employs that person, but the person doesn’t live geographically proximate to southeastern Wisconsin?” Paetsch said. “I don’t think we’re at a point where we have an answer to that question, but I think we’re going to have to start to wrestle with it and understand it.”
Paetsch said many companies will want most of their staff to come back to the office once the pandemic is over, although there will be some that shift to hybrid or fully remote models.
“Those companies would have done that anyways because they were already well down that road. COVID was almost like a proof point where it showed them that in fact they can make it work,” Paetsch said.
Amanda Daering, chief executive officer at Milwaukee-based talent consultancy Newance LLC, said in the immediate term with the pandemic continuing, employers would like to have their people back in the office but they are also concerned about keeping employees safe.
“For some leaders, they have a bit of remote fatigue,” she said. “There are some employees who have found they miss the work-life separation of going into an office.”
A PwC survey of 120 U.S. executives in June found 55% expect most of their employees to work remotely at least one day per week after COVID, up from 39% before the pandemic. Another 34% said many employees would do so, up from 25%.
PwC also found 83% of office workers would like to work remotely at least one day per week, including 58% who would like to do it three days or more and 32% who would want to do it five days per week.
“It’s interesting because I don’t think there is one answer for everybody, but I definitely think it is on everybody’s mind,” Daering said.
Of course, there are industries in which remote work is not an option. It is not feasible to have an employee take a machining center or injection molding equipment home. Construction work needs to be done on the job site. Even as telemedicine has grown during the pandemic, someone needs to interact with patients at a hospital.
Still, it is clear remote work has increased during the pandemic. A Federal Reserve Bank of Dallas working paper estimated 35.2% of the workforce worked entirely from home in May, up from 8.2% in February.
The paper also pointed out that the ability to switch to remote work was more common among highly educated, higher income and white workers. For metro Milwaukee, a region that already has big gaps in economic prosperity, more remote work could exacerbate those trends if minority groups do not see the benefits of remote work.
Another working paper from the National Bureau of Economic Research and University of Chicago professors Jonathan Dingel and Brent Neiman estimated that 37% of all jobs in the U.S. could be done from home. Metro Milwaukee nearly matches the country as a whole at 36.5%, while Madison is at 42.6%. The San Jose metro area is the highest in the country at 51%. Among Wisconsin metros, Sheboygan and Racine are the lowest with the possibility of 27.6% and 26.8% of jobs being done remotely.
Making the decision
The decision about shifting to remote work is not one that companies will make in a vacuum. Todd McLees, founder of Milwaukee advisory services firm Pendio Group, said businesses need to consider things like customer experience.
“How acceptable will this be for how long?” he said. “Everybody is putting up with it now because we’re all facing similar challenges, but if customer organizations start going back to work and as a vendor you’re deciding (on) work from anywhere, what happens when you put the norms of those two cultures together? Is that going to be OK or does that introduce risk?”
McLees said leaders need to think about how remote work or a hybrid model would shape relationships with each stakeholder group. And even within groups, there may be different answers. A quarterly business review with some partners may need to always be done face-to-face while another might be OK with two virtual meetings per year.
“One culture doesn’t typically get to define that stuff,” he said. “You’ve got to figure out what they want too, because if your partners are of a different mindset, do you become the tool they don’t pull out of the sales bag as they’ve got 38 other companies they represent?”
Exactly how long employers have to figure out their long-term remote work strategy depends on the course of the pandemic and likely a potential vaccine. McLees said many companies are planning to revisit the topic in the first quarter while others are pushing it out further.
“I think this is going to be a boon to job candidates,” Weber said. “Right now, we’re still in the messy middle, but this time next year it should be fairly obvious if a company is going to require you to be onsite or you can work 100% remote or whatever the arrangement is in between and then candidates can choose.”
More than 60% of Milwaukee-area companies surveyed by the Metropolitan Milwaukee Association of Commerce said they plan no change to the amount of remote work at their companies in the fourth quarter. Around 30% of those surveyed have at least half of their company working remotely while 36% say a quarter or less of their workforce is remote. A little more than one in five said they have no remote work.
If a company does decide to move to a more permanent remote work or hybrid model, it may take some time to work out what new company norms and culture look like, even if the pandemic has offered a head start.
“I think that it will take longer for an employer who is trying to recreate the past somehow, I think it will be faster for an employer who is looking at the situation and saying, ‘how can we be the best we can be within this,’” Daering said, adding that scale also matters and a company with 12 people can pivot faster than one with 12,000.
Shifting to remote work has its potential benefits. For employees, there is no commute and greater flexibility in how time is spent. Employers might see an opportunity to reduce their real estate and facilities costs or to draw from a wider pool of talent. The region could benefit from less congestion on its roads and highways. It could also keep top talent from leaving the state and potentially attract more people to the region.
Milwaukee has already seen some benefit from migration during the pandemic. Data from LinkedIn Economic Graph Research suggests net arrivals are up 4.5% during the pandemic compared to last year. The city saw the fourth biggest gain behind Jacksonville, Salt Lake City and Sacramento.
Larger cities like New York, San Francisco and Seattle saw the sharpest declines in LinkedIn’s data.
Research by freelance marketplace Upwork suggested that near-term migration rates could be three to four times their normal levels with 14 million to 23 million Americans planning to move as a result of remote work. More than half of those moving were doing so in search of more affordable housing and nearly 55% planned to move more than two hours from their current location.
That potential for increased mobility is part of why an organization like M7 needs to focus not just on economic growth and talent, but on livability.
“It goes hand in hand with growth and talent,” Paetsch said. “It’s having a place that people want to come to because at the end of the day, yeah, the job might be great, the company might be great, but do I want to live in that place?”
It is also possible that the availability of remote work decreases mobility for some people. McLees wondered if people might opt to work for their third or fourth choice company if it means not having to move.
Remote work could also lead to better employees for the region’s companies, McLees said, suggesting someone might first work remotely for a company in Silicon Valley, then in Austin and then ultimately decide to join a Milwaukee-area business.
“Is there an advantage of them having experience in other parts of the country with cultural agility, the human skills they pick up from remote work?” McLees said, noting the five years he spent working in London completely changed his perspective and remote work means that kind of experience can come to more people.
“Digital globalization will offer more companies a more diverse workforce, even at the medium-sized employer, as long as you’ve got the culture and capabilities internally to manage that,” he said.
Recruiting and retaining talent
As for what more remote work means for recruiting employees, it would seem companies could draw from a wider pool of applicants, but Weber noted that, in his case, high-level, senior product development roles are filled from his network or a trusted recruiter.
“It theoretically opens it up a lot wider, I’m just not sure practically how you’d get in front of those people. Why would somebody in Dallas apply to Health Champion in Milwaukee?” Weber said.
David Wangrow, an assistant professor of strategic management at Marquette University, wondered what remote work might mean for career development.
“I would be very concerned about promotion opportunities,” he said, noting that beyond employee concerns about moving up in a company, the business may need to think about if there would be costs to move employees to be in-person as they reach higher levels of the organization.
Wangrow added that especially in a hybrid environment, a manager might be more confident in their judgment of an in-person employee when a company is facing staffing reductions.
Whether fully remote or hybrid, companies now face an additional challenge in helping their employees learn new technologies and develop new skills, McLees said. He noted skill development is not as simple as having employees log onto a learning platform and watch some content. People need to put their new skills into practice.
“I think that just got a lot more complicated,” McLees said.
One issue is that new technologies may help automate some tasks and free up employee time. McLees said companies should be talking with employees about the idea that some percentage of their time could be freed up and imagine how it could be used differently.
“Those conversations are not being had and therefore the development path is less clear,” he said, acknowledging that a hybrid or remote model where time is more flexible is also a complicating factor.
In the near-term, Daering said employers should think about how to keep their employees engaged, especially as the seasons change and the ability to do activities outside of the house diminishes. Longer-term, she said, employers need to help people stay connected to each other.
“It’s going to take, on a regional level, more effort from leaders to show people what opportunities they have and then also make sure they’re all part of the fabric of this community,” Daering said.
Individual companies may also be concerned about what they are losing with remote work. Sure, productivity metrics may have held up during the pandemic, but what about the benefits of organic and sometimes chance conversations around the office that lead to new and better ideas?
“We may not be seeing the impacts of less social interaction, but that doesn’t mean we won’t see it in 12 or 24 months,” Wangrow said. “The effects are delayed. … It’s very difficult to have any sort of leading or ongoing indicator that that’s declining. Where you’re probably going to learn that … is after the fact.”
Depending on a company’s product, learning that the team overlooked something that might have been addressed by working in-person could have big implications.
Wangrow said the available virtual communication technologies like Zoom or Microsoft Teams work well for more primary communication where people need to directly interact with each other. The challenge comes for those who are not a primary participant in a meeting. With remote work, this group is likely to be less engaged than they would be if they were physically in the room.
“It’s not a technology issue. … It’s more an issue of human behavior,” Wangrow said. “I think it becomes more critical for senior management to set the tone for what needs to be done.”
He noted that often senior managers might set guidelines for teams, turn them loose and expect them to come back with solutions.
“You need to stay closer to it,” Wangrow said, noting that with less interaction and communication, teams might be more inclined to move down a traditional or expected path. “I think there’s a real danger that you don’t go down enough paths.”
For Weber and his teams at Health Champion, communication is a key part of product development and they’ve leveraged technology to take the place of the ongoing banter that fueled them in the office. Chat messages have become a major fixture and Weber estimated more than 2,500 are sent per day.
“People chat constantly,” he said. “It’s not just people randomly chatting in a Slack thread or something like that. The chat has to be organized, the same way it would be as if I walked over to your desk and said, ‘Hey, I need to talk to you about this work item.’”
Health Champion has also used an always-on audio channel on Discord, a communication app often used in gaming, to allow synchronous communication.
“A lot of times when you’re chatting it’s like ‘OK, this is far too complex to chat about, let’s hop in the channel and figure it out right away,’” Weber said.
He pointed out many companies might schedule a meeting to discuss a complex issue, but it often takes a few days to find available time and schedule it.
“By the time you get there, you’ve forgotten the context of what you were talking about. It’s a disaster for productivity,” Weber said.
When COVID first hit and the team switched to remote work, Weber said his calendar exploded as five- to 10-minute conversations suddenly became 30-minute scheduled meetings. In addition to leveraging technology, he’s also used some rules like requiring all meetings to be in the morning to put some constraints in place.
Another adjustment some team members made was to switch their schedules to take Wednesday off and work Saturday instead to break up the repetition of working from home.
One concern many have with remote work is that innovation may suffer in the long term. Health Champion is still a startup so most of what it does would qualify is innovation, but Weber acknowledged a bigger company trying to break into a new area might struggle.
“I would still say that if you’re trying to do something like put a man on Mars, y’all should just go get COVID tests and rent out a floor of a building on your own and do it face-to-face,” he said.
Whether employers choose to go remote, hybrid or in-person, the competition for top talent will only increase, something Midwestern companies should keep in mind.
“We’re already behind the curve when it comes to employment culture, not benefits and perks, but employment culture in the Midwest and this is just going to take it to the next level,” Weber said, noting that many employees will take a lower salary to work somewhere they are trusted and empowered to solve problems.
“You’re competing with people that already get this and you have to not just make strides forward but leapfrog many steps forward and catch up or you’re going to lose the talent war,” he said.
Wisconsin and MMAC Benchmark Metro Areas
Percent of potential remote jobs
Percent of potential remote wages
Salt Lake City
Fond du Lac
Source: Jonathan Dingel, Brent Neiman/University of Chicago/National Bureau of Economic Research. Data available at: https://github.com/jdingel/DingelNeiman-workathome/