Remote working requires a shift in thinking and organisational policies in order to be effective. Traditional employee contracts, and agreements around behaviours and expectations, do not translate directly into a distributed teams model. As remote work matures, we can also expect new trends, challenges and benefits to emerge. Businesses need to adopt agile mindsets and develop strong work-from-home policies in order to ensure that they can reap the rewards that can come from choosing to work remotely. From preventing burnout to compensating distributed teams, dY/dX partner Nevo Hadas, spoke on Business Day TV with Michael Avery to discuss some of the key elements organisations need to consider for the future of work.

As I’ve said many times, we’re not working from home during this crisis but rather, living at work. In the early phases of lockdown, there were a lot of predictions that we are witnessing a remote work revolution. As the weeks have dragged on, we’ve seen that this (optimism) may have been illusion, as we have struggled to fit work in between things like homeschooling.

For many, there has also been the feeling of loneliness. Many workers are desperate to get back to the office for social interaction. In fact, a recent survey found that 86% of South African office workers are ready to return to their places of work. Similarly, the wall street journal reports that fully remote workforces mean that projects take longer, collaboration is harder and training new workers is a struggle. How do we balance that need for structure with the flexibility a post-pandemic world demands? What does remote work look like in the future? We’ve invited Nevo Hadas, partner at dY/dX, to find out a little bit more.

As a digital transformation agency, you conducted a survey with 250 respondents to evaluate how well teams are performing with regards to working from home, looking at their strategies and policies. 73% found working at home more productive than at the office. Why do you think this is the case?

The reason, which is quite common across a lot of research you’ll see, is that there are no gaps between meetings and people are starting work earlier. If companies have evolved to the point where people have time to work quietly at their tasks, we find that they are far more efficient at getting work done. The effectiveness of businesses has been increased a lot over this period of time.

A lot of people have said they feel overwhelmed by the volume of calls and emails and other communication. Elsewhere it’s reported that employees are hesitant to report feeling ill because they’re already at home. Do you think some employers are unreasonable in their demands in terms of working from home in an environment like this?

I think there are two aspects to this. The one is the level that employers expect from staff. Some expect that you’re on and connected all the time – they think, “where else could you be other than on your laptop responding to messages?”

The other thing is that people who work from home have often felt this sense that they need to work harder and be more available and alert than if they were at the office. They worry that if they’re not at their desk, they might be seen to be shirking off. That’s created a lot of conflict for people.

Especially because of the lockdown, we haven’t been able to unplug or go away for the weekend, at least not until very recently. Before the lockdown, people would leave the office to go home but now your office is at home. Should there be a company policy just to address downtime so that we can manage things like burnout? I’ve read some interesting research which said that we are essentially heading towards a second pandemic of work-related burnout.

That’s spot on. In the research we’ve done and the research we’ve seen, the lack of remote working policies is a key issue. Only about 26% of companies feel that they have adequate remote work policies. Those policies should cover things like when you switch off and how you switch off. Everyone thinks it’s going to be easy in terms of having flexible time, but the challenge comes in when I start working in a more globally connected workforce across more time zones; my switch-off time becomes harder to identify. Time differences mean that I could have calls up to 6 or 7 pm just to try and fit in with everyone else.

That’s the challenge that companies are facing right now – how do you define your workday more effectively so people know when you’re available or not? That’s the shift – company policy should create an over-arching structure and then there must be team-focused conversations looking at what times you are available for meetings and for synchronous conversations so that we can communicate more effectively with one another.

Just listening to that, there is a challenge here for management to ensure that people are sticking to whatever policy you put in place, especially because your team is scattered all around your city, country and the world… It would be difficult to evaluate whether or not they are sticking to these company policies.

What we’ve found is that it’s not about whether people are shirking, but rather, are people actually taking the time off? Are they actually stopping the phonecalls at 7 pm or are they still answering emails at late hours? That’s actually the problem. We did a project a few years ago with the Dutch government, looking at remote working and remote working teams. One of the key aspects that came out, from a westernised or developed country perspective, is that knowledge workers are, on average, 25% overworked.

In the industrial age, the factory workers had to unionize to reduce their work hours and now we’re on the other extreme, where knowledge workers are working the most hours. That’s why there’s this problem of trying to manage and curtail the workday because burnout is coming.

Netflix is a global example and Investec is a local one – they instituted a self-regulated leave policy and then discovered that no one was taking any leave because of the company culture. I do think that’s what managers will have to worry about. It’s not about if you’re being unproductive but whether or not you’re working yourself into a burnout situation where you have a cost for the individual and the company itself. So we’ve established that we’re working harder and longer hours, how is this going to impact remuneration packages? Surely we should be seeing increases in remuneration if we’re putting in the extra hours?

I think remuneration for remote working is an interesting topic in general because it’s gone from being a requirement that you had to do in an emergency or from being seen as a benefit, to actually being something that’s a part of perks and pay structures. What we’re expecting to see, and again, what the research is showing, is that companies will start looking at work-from-home packages to cover things like Internet costs. They need to ensure people have a good home office environment because that’s a critical requirement for working from home successfully, particularly in the long term. All of these actions will happen so that it can reduce a company’s property costs over time. Fujitsu is targeting to reduce their office space by 50% which is about an 800 million Dollar lease cost reduction over a 5 year period. If we choose that, the question is, how do we then enable our employees to work effectively?

It’s actually a lot more cost-effective to pay my employees a little bit more – specifically to help them create a better work from home environment – than it is to rent a big office space.

That’s an important conversation. I think many people initially loved the novelty of working from home but are now realizing that all of those expenses that were typically taken on by the company – air conditioning, internet costs – all of those costs are now being taken on by the employees. Surely there is a big conversation that needs to happen here to renegotiate that contract between employee and employer to cover all of those expenses that have been shifted off the company’s balance sheet on to the individual’s personal balance sheet?

This is where it’s critical for companies to have a clear policy and strategy. If they end up keeping their offices and paying people to work from home, they just end up paying double the costs. What they really need to understand is, what will their property size downshift be and how much capital are they then freeing up? Can they use that to compensate employees? Which employees actually need benefits?

This is important, especially in a society as unequal as South Africa. There’s a lot of people who can’t work from home, so what will the strategies be around that? Are you going to focus your benefits on lower-income brackets so they can, for example, move into better accommodation? I think there’s a lot to look at in these environments, not just from a sense of productivity but also from a sense of fairness and distribution.

That has huge ramifications, especially in a society like ours, as you mentioned, where the spatial legacies of apartheid mean that people still live very far from their place of work. If companies can now bring them closer to their place of work, you’re having a net positive impact on society as well. The other thing we’re grappling with is this whole issue around the length of the week, which is a legacy from the industrial era. Do you think we will move to a four day work week with all of these gains in productivity, potentially freeing up more leisure time?

We are definitely seeing these shifts. The four day work week or at least the four and a half day work week are definitely on their way. Just the productivity hours gained from not having to commute could automatically cover a day of additional effectiveness. To see companies moving to four and a half days initially makes perfect sense and there’s growing acceptance for that.

What happened globally before COVID was that the four day work week happened more at senior levels and had a reduction of salary attached to it. So you could hire a more senior person at a lower cost because they didn’t have to work five days a week and they could exchange one day of free time for a lower salary. What we expect to happen more and more in the future is actually a multi-generational workplace – so that it applies to everyone, from 60 plus all the way down to the younger people coming in the workplace. So someone who’s 60 plus can work three days a week and still contribute their skills and expertise to the company and help the company grow without having a payroll impact.

Is it actually possible to change employee contracts from hour-based work to outcome-based work?

There are two very interesting questions around employee contracts. With global companies, the question is, where does the employee work? For example, if I live in South Africa but am actually reporting to a boss in the U.K, am I employed under U.K law or South African law? That’s question 1. Question 2 focuses around the hours versus outcome issue and comes up around the question of tax. If we look at how SARS deals with employees, there’s a whole lot of different checks and balances put in place to look at it and say to people, you don’t have to be there from 9 to 5 to deliver this piece of work.

Once you refocus on the work delivery rather than hours, you are seen more as an independent contractor than an employee. That changes the contract too. The other way to do it is to decide that you don’t have to be there 9 to 5 but you have to deliver 30 – 40 hours of work. But then you have to ask, how do you measure that the employee actually delivered on their 30 to 40 hours? As we move away from this old school industrial mindset where it was easy to manage because you were at your desk from 9 to 5, suddenly all these structures fall apart. We don’t necessarily have answers for them yet, without changing how the company works and operates internally. Those are the challenges that companies are looking at as they look at their future policies.