Remote work is here to stay. As they prepare for a return to “normalcy,” only a minority of employers plan to bring everybody back to the office full-time. The future of work is hybrid—some employees will work remotely all the time, some in the office all the time, and many coming into the office a couple of days a week.
A year after companies asked employees to work from home full-time, the threat of coronavirus infection is finally receding. Vaccination is now becoming available for employees and companies are preparing to bring more of them back to the office.
But the workplace will never be the same. Nor will many jobs. A return to the pre-COVID-19 status quo is not an option. In a survey of employers, 87 percent said they will adopt “hybrid” work arrangements permanently—with some employees working remotely all the time, some working in the office all the time, and many employees coming into the office a couple of days a week.1
Not only has the past year changed where people work, but also how they work. Both employers and employees have benefited from the forced use of collaboration technologies that improve ways of working. And many companies have used the shift to work from home as an opportunity to reimagine processes, jobs and even operating models. They have accelerated digitization and will continue to do so as they refine hybrid work.
In this article, we review the main lessons of the transition to remote work and how these can be applied to a hybrid workforce. To sustain the momentum of the past year and build future success, companies must embrace organization-wide digital transformation even more actively than before.
At the height of the COVID-19 outbreak in the spring of 2020, over 70 percent of employed Americans were working from home all or part of the time and as of January 2021, 56 percent still were.2 Before the pandemic, only 2 percent worked from home full-time.3 This dramatic shift was not something many workers or employers were prepared for. Companies scrambled to get remote employees up on virtual private networks (VPN) and start using the latest online workspace technologies for video conferencing, messaging, etc. and implement new organizational processes such as virtual closing of the books.
How employees did their job, changed overnight. In a KPMG American Worker survey, 77 percent of respondents said their jobs had become more demanding, and 35 percent said their team’s ability to collaborate had worsened.4 To sustain remote work, 44 percent sought allowances for work-from-home equipment and 40 percent wanted resources for better team collaboration (Exhibit 1).
One of the major pain points for employees has been technology; slow home internet connectivity is an instant motivation killer. And even the best online collaboration tools have proven inadequate for teams that rely heavily on in-person interaction for brainstorming and idea generation, the challenge remains that available virtual tools poorly replicate the real office environment.
On the other hand, when the technology works, employees say they have actually become more productive (the perspective of employers on productivity is more mixed).In a KPMG American Worker survey last fall, more than two-thirds of employees said that they were more productive working remotely. And they’re working longer hours. In the same KPMG survey, 49 percent of remote workers said their mental health had worsened—a sign that burnout is a real risk in remote work.
In many cases, the shift to remote work benefitted both employer and employee by forcing the adoption of secure online workflows. These process improvements will continue to benefit organizations as they shift to hybrid work.
Remote work is here to stay, at least some times and for some employees. As they prepare for a return to “normalcy,” only a minority of employers plan to bring everybody back to the office full-time. Some have already given up costly office space in anticipation.6
As they contemplate a future that includes a large share of remote employees, companies need to think about the ongoing risks. Remote work may undermine employees’ identification with companies, trust in leadership, as well as provoke dissatisfaction from colleagues working in the office. It also challenges the hierarchical structure of traditional organizations. This makes managing the employees’ relationship with their leaders and supervisors very important.
Companies should be mindful of how well different functions can be adapted to work from home. For example, accounting and finance, IT and R&D may be easier to transition to remote working, but other teams such as product development and operations may need more support or should take up a hybrid work-from-the-office/home approach.
For all companies and functions, the evolution of a hybrid workforce can be part of a wider digitization/transformation effort to improve efficiency, agility and creativity. But to hit these goals, companies need to go beyond installing the enabling technology; they must also transform the operating model and governance. When the focus shifts from where people work to what they do, companies need to do a better job evaluating their employees’ capabilities and figuring out the best ways to help fulfil them. This new value delivery model reimagines work in six key areas:
How will this affect workforce needs? While many companies expect long-term efficiency gains and cost savings from remote work and digital transformations, the impact on staffing levels is unclear. According to chief information officers polled by KPMG, the impact of ongoing digitization will be to automate tasks, rather than eliminate jobs.7 Robotic process automation (RPA) and other artificial intelligence technologies will continue to make inroads and will take over certain tasks, leaving many current workers in partially automated roles.
The first step companies can take to improve performance in the era of hybrid work is to “baseline” their needs. Most executives say nothing is more urgent than connecting workers to each other more seamlessly online. More than 80 percent of digital transformation strategy leaders polled by KPMG in mid-2020 said they were investing in collaboration tools (Exhibit 2). Not far behind was investment in cloud computing, which is required for many collaboration platforms
How good are collaboration technologies today? Several widely available technologies aim to replicate the face-to-face interactions of office meetings. Which one works best in a particular organization or function depends on the main task at hand. For example, programs such as Microsoft Teams, Zoom and WebEx provide basic video conferencing and messaging. For more cutting-edge features such as “whiteboarding,” interactive brainstorming, and integration with other tools and technology, Limnu, Mural, Miro and Stormboard are available. These programs also have stronger security features.
Still, today’s remote-technology solutions are far from enabling real human interaction. The future of remote working technology relies on concurrent advances in hardware and software, and a seamless integration of hardware and software to create an environment that works in harmony with human body, brain, and emotion. Facing a number of solutions yet technology constraints, companies should explore and adopt technology that allows team members to feel closer to one another, boosts employees’ productivity and helps generate a healthy and sustainable working environment.
Operating model transformation is needed to adapt to new technology and maximize productivity.
For the new work paradigm of the post COVID-19 reality, companies should strive to solve the remote work challenges through a holistic assessment, prioritization and transformation of the technology, organization and operating model. There is no standard solution for any company, but technology implementation would not be successful without appropriate operating model support. This is true not just for the post COVID-19 environment but for the long-term digitized operational transformation of your company.
KPMG has deep expertise in enabling clients with innovative technology solutions and operating model and culture transformation. We provide a comprehensive set of services addressing the client’s strategic, technological, and operational needs to change. Whether it’s a digital delivery and innovation assessment or a review of your current operating model, KPMG can help assess, design, and enable the capabilities needed to position your organization for success.
Change management also matters. A successful change management program provides a basis for people to act their way into a new way of thinking, taking full advantage of the new enabling technology foundation. This could include but is not limited to: