Although agencies have historically been reluctant to embrace remote work, many are now entirely rethinking their approach. In this piece,Â Brian Dolan, CEO and founder, WorkReduceÂ speaks about how some agency execs have been approaching remote work and what is next.
Global ad agencies work long distances for clients around the world, and yet they have historically been resistant to the idea of letting staff work from home. Their strong belief that teams had to work together in person to be creative and productive drove a consistent trend toward large centralized office spaces in major cities.
And then, everyone was forced to work from home as the COVID-19 pandemic swept across the country. Much to the surprise of many, teams quickly adapted and performed well under pressure. Meetings happened, collaborations continued, and work got done.
With an assurance that business could continue with remote employees, executives began to appreciate the potential benefits of remote work, and now that they can reopen offices, many are not.
â€œI was fairly reluctant about remote work,â€ said Scott Symonds, managing director of Media for AKQA, a global design company. â€œI felt there is value to everyone being in the same place, and I still do. But, after 25 years of working in an office, I feel the future of flexible working could be very successful and return to the studio will be structured around key meetings.â€
On a personal level, he said he is doing things he had expected would wait until retirement, like having dinner with his family and working out more.
â€œAnd our business is operating as smoothly as ever,â€ he said. â€œEvery rule has been broken about things you were supposed to do in person. I’m a total convert to remote work. I’m totally rethinking the value of office space.â€
Just a few years ago, it seemed like remote work might be done for. Marissa Meyer famously canceled remote work at Yahoo just a few months after taking the helm in 2012. The ascendency of WeWork seemed to portend more flexible, but not more remote, office options. And even the excesses of the Bay Area weren’t enough to trigger a serious exodus.
But in only a few months, the tide has turned.
And now, at a pivotal moment, both employers and employees are facing important decisions about remote work: do we go back to the office at all? If so, when? If not, how do you manage issues around specialized equipment, security, promoting team cohesion, and maintaining company culture?
â€œWe have to be prepared for change,â€ said Sharif Ebrahim, a managing principal of Kearns & West. â€œWe all have to understand that this will be with us for 12 to 24 months. I’m not sure we’re ever going back to exactly how we worked before.â€
Nearly 70% of large-company CEOs plan to downsize their office space, according to a recent KPMG survey.
Deutsch LA let the lease expire on offices in the agency-centric Playa Vista neighborhood with a plan to move employees to its Steelhead production facilities across the street once offices can reopen. The company said it was a business strategy to reduce real estate costs and invest in people and practice areas.
The chief executive of global advertising conglomerate WPP (the parent company of AKQA) said he expects a more decentralized approach for the 106,000-person marketing and advertising company going forward. He noted to the Guardian that working from home has been seamless. Barclays chief executive Jes Staley also indicated that the company would be looking to operate with more distancing for a longer period than required.
The Motivation for Long Term Remote Work
But what drives the ongoing consideration of remote work, aside from the lifestyle elements that surprised Symonds?
For many, it is primarily capital costs â€” human and real estate. They are among the biggest challenges for any business to manage, and reducing either or both will always be appealing.
Real estate is expensive, especially in the big cities where agencies had set up shop. Even in places where people are returning to offices, it is with limited capacity to maintain social distancing. That drives up the per-person cost of the space.
On the personnel side, opening the door to remote work opens the door to being able to hire people at lower pay rates based on their cost of living.
Facebook’s recent announcement allowing work from anywhere is revealing in this regard: workers who choose to leave the Bay Area will have their pay rates adjusted to reflect the cost of living in their current location on January 1.
There is an additional benefit in having access to a deeper talent pool that isn’t limited by geography.
For some, however, the trend to remote is meeting some high barriers.
Who Can Work From Home?
A recent study by the National Bureau of Economic Research showed that 34% of US jobs, accounting for 44% of wages,Â could easily be performed remotely.Opens a new window Â Geographically, these jobs are concentrated in some of the country’s most affected (and vulnerable) areas.
Unsurprisingly, roles that can easily move to remote are clustered in what is known as the knowledge economy: high-value fields including software, education, finance, advertising, and research. A segment of service and creative work rounds out the most geographically fungible fields.
Within these fields, however, companies may face insurmountable security risks in having employees working from home. Or, they may have client contractual terms that prevent it. Some companies that otherwise might be able to go virtual are contractually required to keep data in physically controlled environments. Additionally, equipment like podcasting or video studio â€” and powerful desktop computer hardware to management â€” can be expensive to replicate at home.
There is also the issue of having employees who are eager to get back to an office setting.
â€œFor the younger parts of our team, if you are living with three people in an apartment, work might have better WIFI, more space, and add some structure to your life by being closer to mentors and managers,â€ Symonds cited as an example.
His company is handling the concern with a survey to get a better sense of who wants to go back and why. That will be used to guide decisions about space and how the work is structured.
Despite these barriers and resistance to the idea of long-term remote work, it is clear that agencies are forging ahead with reshaping how they use their real estate. We can expect that even if they do not eliminate their central offices entirely, they will reduce their footprint and restructure their teams to allow for more flexibility in where employees work.