Some CEOs are permanently shutting office space to give up on hybrid set-ups and fully embrace working from home. Will others follow? I In late June, Yelp CEO Jeremy Stoppelman announced a big decision for the 4,400-person company: by 29 July, Yelp will do away with hybrid set-ups altogether, and go fully remote. Stoppelman, who described hybrid work as the "worst of both worlds" and even dubbed it "hell", said physical offices in major cities in the US, including New York City, Chicago and Washington, DC, would close. Yelp is only keeping its San Francisco headquarters and Phoenix, Arizona outpost, transitioning to a 'hotelling' model where desks can be rented for the day. "Over time we came to realise that the future of work at Yelp is remote," he wrote in a blog post. Other companies are similarly doubling down on remote work. Airbnb, 3M, Spotify and Lyft have all enshrined permanent home-working set-ups. Some firms, like Yelp, have also closed office space: in May, worker-for-hire app TaskRabbit completely closed all its offices, including its headquarters in San Francisco; in April, PayPal shuttered its San Francisco presence. There can be huge upsides to moving in this direction, including meeting the desires of workers who want to stay at home permanently as well as saving costs. But experts also say that banking on remote work in this way carries risk β especially since no-one is entirely sure if it will work, or what will happen next. Frustration and strategy The complexities of hybrid work are a key factor pushing companies into fully remote set-ups. "Hybrid work is really hard to manage," says Frances Milliken, professor of management at Stern School of Business, New York University. "There's a lot of scheduling complexity with hybrid work." As some workers have returned to offices, the downsides of in-and-out hybrid schedules have started to become clearer, from awkward Zoom calls in conference rooms to emotional exhaustion for workers and logistical headaches ensuring team members are in the office at the same time. Many companies have started to realise the shortcomings of hybrid, like staff coming into the office only to spend all day on Zoom anyway (Credit: Getty Images) Many companies have started to realise the shortcomings of hybrid, like staff coming into the office only to spend all day on Zoom anyway (Credit: Getty Images) Hybrid has been "a little bit of a mess", agrees Erik Gonzalez-MulΓ©, associate professor of organisational behaviour and human resources at Kelley School of Business, Indiana University, US. He says it's been a pain not only for companies trying to organise the hybrid schemes, but also for workers, who are experiencing whiplash after two years of working from home, when they had more autonomy than ever before. A large portion of workers don't want to lose this autonomy, companies know, so doubling down on remote work may be a tactic to fight attrition and boost worker engagement. After all, data shows a clear worker desire for remote work; in Yelp's case, 86% of respondents to an internal survey wanted to work remotely all or most of the time; only 1% are currently going into the office daily. Companies that double down are simply following the numbers, making sure their employees won't leave for other remote-first jobs. Milliken argues this is a primary reason some companies are shifting approaches β and why fully remote set-ups may stick. Because while closing offices might seem like a point of no return, "I don't think this move is non-reversible β they could just go back into the cities and buy real estate," she says. "I would think that it's non-reversible [because] workers won't want to go back into the office." For companies with the flexibility to take such a dramatic decision, the option is becoming increasingly appealing A shift to remote work also vastly expands talent pools. Workers are no longer limited to searching specific metropolitan areas with proximity to an office, and recruiters can go after talent from around the country β if not the globe. Stoppelman said Yelp had seen "a strong surge in candidate applications" as it moved towards its remote-first future. Of course, this move isn't possible for all industries: customer-facing sectors that have been resistant to remote (or even hybrid) work, like finance, or other sectors like hospitality or healthcare, either won't or can't close workplaces the way other companies have. But for companies with the flexibility to take such a dramatic decision, the option is becoming increasingly appealing. 'Significant risk' We could see more companies follow suit, say some experts, including Jason Schloetzer, associate professor at McDonough School of Business, Georgetown University, US, who says full remote "is the direction some companies seem to be going". But this is new territory, so it's unclear how widespread this could become, and how many companies are willing to take the risk. "I think any kind of job or industry where people can work independently and don't require a lot of intensive collaboration" could roll the dice and follow in Yelp's footsteps, says Schloetzer, and that the doubling-down strategy could become reasonably common among certain sectors, like tech. But even for those companies that seem uniquely primed to go fully remote, "that's not necessarily the culture that every company wants to have". Yelp closed many of its offices in favour of remote working after its CEO called hybrid "hell" and most of its employees said they prefer working from home (Credit: Getty Images) Yelp closed many of its offices in favour of remote working after its CEO called hybrid "hell" and most of its employees said they prefer working from home (Credit: Getty Images) That said, even if a company could double down on remote work, not every expert believes it's the best move β especially as data does point to benefits to in-person work. "In the end, I think it always helps to have some physical space you can go to," or at least having the option to do so, believes Gonzalez-MulΓ©. Equally, while going remote does expand a firm's talent pool, it also risks alienating potential talent who dislike working from home for a variety of reasons, including loneliness, a lack of home office space, distractions like kids or roommates, Covid-19 exposure and more. "You risk losing people for sure," he says. "It does limit the pool [to] people that are willing to work from home, and have a set-up that lends itself to that and that are productive at home." Experts also flag challenges with onboarding and relationship-building; full-remote could "hurt newcomers", adds Gonzalez-MulΓ©, a problem especially pronounced for the youngest Gen Z workers. "Maybe they're banking that the folks that are working remotely aren't going to have any of these problems," but he adds that "I think what they're doing carries significant risk." Regardless, there will be more firms who are ready to jump into a remote-only future. But Schloetzer says other companies may keep from making big moves, especially with a dearth of data on what works now β it's still very early in the return to work, after all. "Whenever you're making such a huge transition," adds Milliken, "it's hard to predict exactly what's going to happen next." |
Sometimes, colleagues of Informed Investor Decisions share special offers with us that we think our readers should be made aware of. Below is one such special opportunity that we believe deserves your attention.
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Dear Reader,
Chances are, there's a mysterious store maybe just around the block from where you are
You might have walked or driven past it and not even realized it.
It's a store that is, for all intents and purposes, empty.
Though employees might be racing in and out, customers aren't allowed inside. |
Almost a thousand alien, or non-native species have been listed in Mediterranean waters. Some of these pests are becoming a surprising source of opportunity. I Formerly empty desks are starting to fill as workers are trickling back into offices β and we now know a lot more than we did just a few months ago. B Bringing workers back to their desks has been a rocky road for employers and employees alike. The evolution of the pandemic has meant that best laid plans have often not materialised, and the flow of workers back into offices has been more of a trickle than a steady stream. This has meant a lot of uncertainty around what a wide-scale return to office might look like in practice. Yet while plenty of companies are still working through their new policies, some employees across the globe are now back at their desks, whether on a full-time or hybrid basis. That means we're beginning to get some clarity on what return-to-office means β what's working, as well as what has yet to be settled. Here are the key lessons so far on heading back into workplaces, and what they might mean for the future of how we work. Inflation and economic concerns are putting stress on employees As costs rise throughout the world, workers being called back to headquarters are feeling the squeeze. In the UK, inflation is hovering around 9%; the rate is similar in the US, where prices are rising at their fastest rate in 40 years. Consequently, return-to-office-related costs have shot up β think petrol and food, for instance. Yet wages haven't kept up with inflation β even despite the salary growth many workers have enjoyed during a favourable pandemic labour market. This reality is putting stress on employees who have to pay for transport, desk lunches, more childcare, clothing and that all-important after-work socialisation β costs they haven't incurred for nearly two years. This is especially jarring for workers who were able to save during remote work, when these expenditures weren't a factor. In April 2022, Umus, a London university lecturer, told BBC Worklife that they were spending nearly a quarter of what they made every day on return-to-work costs. Similarly, London-based events manager Claire said she was struggling to keep up, especially after having put away nearly Β£6,000 ($7,100) in six months. "Having a mortgage, the rise in utility bills, council tax, income tax and the rising train fares, it's just becoming impossible," she said. The costs of getting back to work β such as commuting and clothing β are hitting employees hard, especially amid inflation and rising costs (Credit: Getty Images) The costs of getting back to work β such as commuting and clothing β are hitting employees hard, especially amid inflation and rising costs (Credit: Getty Images) Workers and companies are playing a game of chicken As much as Covid-19 infection waves have stymied the return-to-office, there's another reason a widespread return has been a struggle: neither the workers who are enjoying remote work or the employers who want staff in seats are willing to back down. The battle is front and centre at many companies β it isn't just happening at places like tech firms (such as Apple, where a high-profile tussle meant some top-ranking talent walked away in early May). It's also shown up in less expected places, like the UK civil service, where workers who want to stay at home and the ministers who want them back are at odds in highly public ways. This mismatch has meant a stalemate that's keeping many returns patchy at best. In some extreme cases, as employers stick to their guns, workers are quitting in response, or seeking out roles with a larger remote component. At some businesses, employers are trying to incentivise workers to come back with more pay or perks. It's helping in some cases, but not swaying the employees who've dug in their heels about staying at home. Not everyone is at odds with their companies, though β a notable group of workers are relieved and even thrilled to get a break from the remote-work grind. For some, the isolation has taken a toll, and others report less productivity at home. Neither the workers who are enjoying remote work or the employers who want staff in seats are willing to back down These differing approaches and attitudes mean returns have been happening on an ad hoc and inconsistent basis. It's a very mixed picture, and companies are really having to feel their way through what is workable for all parties involved. The process has been slow, and it's set to drag on at least a little while longer. There's a double standard for who is returning Although return mandates are theoretically for all employees β or at least entire departments β the reality may be more uneven. Specifically, in some cases, employees report that top brass are taking advantage of the situation, insisting their employees come in, while they continue to work remotely. Data from April 2022 tells a similar story. Researchers from workplace-messaging company Slack found a "large and growing disconnect" between work flexibility for executives versus their staff. Non-executives were nearly twice as likely to work full-time in the office β a grating and even demoralising disconnect between superiors and their reports. This is putting the employees forced to return β many of whom are younger and less experienced β in tough positions. After all, it's not exactly easy to call your supervisor on hypocrisy β but there are other ripple effects. The absence of bosses is not only causing confusion among employees, who don't have the guidance they need, but also disrupting growth opportunities, such as mentorship and networking. It is likely that not every boss who is staying home is abusing their power. Statistically, managers were the most burnt-out workers in 2021, according to data from Gallup. Some may be staying behind because they're not quite ready to lead again. However, experts suggest it may more likely be the case that bosses are forcing their reports in due to a lack of trust, yet trusting themselves to work from home. There are definitively mixed sentiments among workers who've returned β some would rather be home, while others are thrilled to have interaction with others (Credit: Getty Images) There are definitively mixed sentiments among workers who've returned β some would rather be home, while others are thrilled to have interaction with others (Credit: Getty Images) The office feels different β and there's a big adjustment period The office as workers know it has changed in many ways. In some cases, companies have reimagined their headquarters to better accommodate hybrid work, meaning employees are returning to unfamiliar offices. However, even places that look the same as they did pre-pandemic don't always feel the same. Some companies have switched to a hot-desking system, which means the personal spaces of the former office have gone away. On top of additional processes like desk booking, which can be time consuming if not totally confusing, it can also be disorienting for workers who used to value consistency and a space to call their own. Many returning workers are also struggling with an adjustment period β this means planning commutes again or finding care for pets, but also smaller things, such as remembering how to pack what they need for the day or dress for the office. Plus, some employees who are thrilled to see their friends again and collaborate in person, are having to re-learn how to behave in a shared setting where people still need to concentrate to get work done. It'll get better, say experts BBC Worklife spoke to in Jun 2022, but the shift has been jarring, regardless. Workers are caught in the middle Simply put, most businesses haven't yet entirely figured out long-term, permanent return-to-office plans. Consequently, workers say many companies have done a poor job of communicating their intentions, which is leaving people who are waiting to plan their next steps in limbo. For instance, some employees have delayed taking major life steps, such as moving house or even starting families, until they know how many days they'll be asked to return β if at all. Other groups have already made big changes, such as buying homes outside commuting distance, and are on tenterhooks waiting for official instructions on coming back to find out if they'll have to search for a more remote-friendly role. Either way, this uncertainty is emotionally and cognitively draining. How the return-to-office date 'died' thumbnail In October 2014, Lotfi Rabaoui was travelling the shallow sandy waters near Ghannouch, a small coastal town in the Gabes Gulf in Tunisia, with a group of local fishermen. Traversing the beds of seagrass and algae, the fishermen made an unusual catch. Tangled in their net was a species of crab, Portunus segnis or blue crab, that wasn't native to the region. More remarkable still, was that the fishermen didn't find just one blue crab β their nets had captured 24 of them. Rabaoui, at the time researcher at the Faculty of Science of Tunis at the University of Tunis El Manar, noted the discovery with interest. Little did he know, however, that a year later this non-native, or alien species would become a national curse. Soon after, the blue crab population exploded. Hakim Gribaa, a fisherman on the island of Djerba, remembers it as if it were yesterday. "It was panic stations," says Gribaa. "The crab represented almost 70% of my fishing catches and I did not know what to do with it." You might also like: The promise and danger of Scotland's bog How India's sacred groves protect nature Why storms kill more women The blue crabs were prolific, reproducing up to four times a year with litters of 100,000 per female. This crustacean is "very aggressive", says Gribaa β it destroys nets, and nips fishermen and other fish. The terror the crabs caused was such that they became known locally as "Daesh", the Arabic acronym for the group calling itself Islamic State. At first, the fisherfolk's livelihoods were overturned. "We were clueless," says Fethi Naloufi, a fishing engineer and head of the Interprofessional Group of Fishery Products in Zarzis, a public organisation responsible for promoting fisheries and aquaculture in Tunisia. Even disposing of the crab bycatch became a challenge. "They remained piled up in the port, or they were thrown back into the sea," says Naloufi. The blue crab has upended Tunisia's fishing industry in more ways than one. But after the initial shock, it has now become one of the region's most sought-after seafoods. The blue crab is native to warmer shores, but its population has exploded in the Mediterranean in recent years (Credit: Getty Images) The blue crab is native to warmer shores, but its population has exploded in the Mediterranean in recent years (Credit: Getty Images) The blue crab originates in Indo-Pacific waters and reached the Mediterranean Sea in 1898, around a decade after the Suez Canal opened. Since then, the crustacean has been recorded in various areas in the Mediterranean, from the Levantine basin up through Sicily, spreading according to environmental conditions, its migration capacity and shipping activities. "As for many invasive species, the proliferation of the blue crab has intensified with the warming of surface waters due to climate change, and with the increase of maritime traffic," says Jamila Ben Souissi, a researcher on biodiversity and climate change in the Mediterranean and member of the Mediterranean Science Commission. Indeed, the blue crab is far from alone in making the journey to the Mediterranean. The rabbitfish (Siganus rivulatus and Siganus luridus), is another particularly successful new entrant. These fish devour the vegetation that provides habitat to native species, decreasing native vegetation cover β mostly canopy algae β by as much as 65% in Greece and Turkey. "Given that rabbitfish are a tropical species generally confined to warm waters, we think that their expansion is linked to [ocean] warming," says Adrianna Verges, a researcher on the ecological impacts of climate change at the University of New South Wales in Sydney and an author of the Greek and Turkish survey. "In our study, we found that large populations of rabbitfish are confined to the warmer eastern parts of the Mediterranean." |
These "dark stores" are cropping up in virtually every city and small town across the U.S. and are the beating pulse of a rapidly developing economic trend called " EoD." Every major tech company β Google, Amazon, Apple, Microsoft, and even Walmart β is going "all in" on this trend. The smart money is pouring in from major money managers (T. Rowe Price, Tiger Global, and SoftBank) and billionaires (Elon Musk, Jeff Bezos, and Bill Gates). In fact, this could be the biggest trend to happen to the retail economy since Amazon. Regards, Whitney Tilson Founder, Empire Financial Research | | |
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