SummaryDec, 2018

The way we work is evolving at an astounding rate. Technology and the proliferation of global workspaces have enabled people to work from all over the world, taking remote working to new heights and culminating in the rise of the digital nomad. Younger generations are transforming the workplace, calling into question the effectiveness of the rigid workspace of old. With flexibility no longer considered a benefit, but an expectation, businesses cannot ignore this fundamental change to the nature of work. The Workplace Futures report explores how companies can harness modern ways of working to reach new levels of productivity, and empower their employees to thrive

In this report

Rise of the digital nomad

As remote working goes from strength to strength, new nomadic ways of working are taking flexible work to the limit

Much has changed since 1980 when Dolly Parton released the song 9 to 5. Most people in Europe work less than a 40-hour week, according to the EU Labour Force Survey, and the average is falling. Remote working is also rising. In the US, the number of remote workers increased from 39 to 43 per cent between 2012 and 2016, according to Gallup. In the UK, the ONS reports that 2.6 million people work from different places with their home as a base.

Not everyone is convinced. IBM was famous for its remote working policies - in 2009, 40 per cent of IBM’s 386,000 global workforce worked remotely, allowing it to sell unused office space for $2 billion. They have just reversed the policy.

Ed Hussey, director of people services at Menzies LLP, which helps SMEs with HR strategy, says: “Ultimately, we are social animals and we like to work collaboratively with other people. Companies have worked out you are more productive and creative when you are with people with similar objectives in the same space for at least some of the time.”

Despite these setbacks for would-be remote workers, there is a small but growing tribe of remote workers who have taken the idea to its ultimate conclusion - the digital nomads.

In the UK, the ONS reports that 2.6 million people work from different places with their home as a base

“I think many millennials and Gen Zs have a pretty strong opposition to the classically scripted bourgeois life: going to school, studying, getting an office job, finding a partner, getting a house, having kids and living in one place the rest of your life,” says Pieter Levels, founder of Nomad List, an online community and information resource for digital nomads.

“Another reason is that it’s simply never been possible before for people to live in different places while working. We’ve had expats for decades, but they’d be generally working in a branch office of the company they worked for in their own country. Now we have people running their own businesses, working remotely for companies in San Francisco, New York or Tokyo or as freelancers with clients all over the world,” he says.

Technology has been the enabler: Wi-Fi and mobile networks have taken the internet to the farthest reaches of the planet while collaboration tools have made it feasible to do ‘business as usual’ from unusual locations.

The rise of Airbnb, offering a home-as-a-service, albeit a temporary one, has also made the idea of digital nomadism a practical one.

Kash Bhattacharya works as an influencer in social media. “My last fixed address was in Edinburgh in 2012,” he says. Now he goes where his work takes him – he was in Berlin for a travel event in March 2017 then spent a month in Poland before heading to Asia for the winter. “I went to Chiang Mai, one of the digital nomad capitals of the world. You can rent an Airbnb for 10 euros a night and eat out for 60 baht (€1.60).”

He also uses hostels as bases, a growing number of which have co-working spaces aimed at digital nomads. He has spent the last year visiting many of them as research for his new book The Grand Hostels.

Despite technology and the proliferation of global work/live spaces, there are obvious barriers.

As a digital nomad, Bhattacharya misses having a regular place to sleep. “I am also now reaching an age where I have to take care of my health and access to a gym is always a challenge,” he says. He also misses not having regular access to a kitchen. “I do have my box of spices with me so I’m able to whip up a curry whenever I can.”

The world’s visa regime is also a barrier to the digital nomad. If you have a standard visa, you are typically not allowed to do paid work – many digital nomads do so even though it is not permitted.

While the nomadic lifestyle works for creatives like Bhattacharya, many businesses are not yet ready to unleash their employees.

Despite individuals’ desire to work remotely, uptake has been slow by companies. “A lot of businesses are stuck in certain deep-rooted customs and practices and they are hard to change,” says The Work Foundation’s director, Lesley Giles.

Giles’ research shows that only half of businesses are forward-thinking and have the technological strategies to unlock flexibility.

If businesses are to embrace digital nomadism, they may also need to change how they people-manage, she says. “You still have to manage the individuals but in a different way, using technologies to keep in regular contact. It is not about presenteeism but about what they are actually producing.”

A lot of businesses are stuck in certain deep-rooted customs and practices and they are hard to change

There is also the reality of physics. When it is 9am in Los Angeles, it is midnight in Lombok. That works fine for asynchronous tasks such as writing code but is less convenient for making calls to customers.

Some roles are also patently unsuitable for digital nomads. While a web designer or a sales executive can happily work from the beach, it is harder to carry out brain surgery when the patient is on the other side of the planet.

If she wrote her paean to working life today, Dolly Parton would be hard pressed to find something to rhyme with digital nomad.

The changing company office

Michael Affronti, VP of product at Fuze, explains how businesses can harness the transformation of the workplace to boost engagement and productivity

The physical workplace is changing at a phenomenal pace, as more and more companies switch from rigid centralised head offices to flexible co-working hubs, shared office spaces, and remote locations.

As Michael Affronti, VP of product at leading enterprise communications and collaboration provider Fuze, explains, all of this conspires to make work a thing you do, rather than a place you go.

within a relatively short time we have seen a change in companies that have become adaptive to flexible work

He has experienced this workplace transformation first hand, starting with his first job at Microsoft HQ in Seattle, Washington, a role he relocated to from the East coast, and an experience he describes as “awesome.”

He says: “It was a great experience. I was working on this giant campus alongside 25,000 other people, with every facility and amenity you could possibly want from retail and healthcare to sports and recreation - all at the same location.”

Fast forward to his current role at Fuze and a model that is geographically in stark contrast. He says: “My team members are based in different locations and time zones globally; however, they’re able to work on same project at the same time. This model is being adopted by a growing number of organisations and within a relatively short time we have seen a change in companies that have become adaptive to flexible work.”

This transformation is being driven by younger generations of workers, as highlighted in the new Fuze Workforce Futures report. It reveals an expectation about how work happens that is fundamentally different from previous generations, with 89 per cent of the 6,600 workers surveyed saying flexible working should be how people work and not a benefit. Almost three quarters (73 per cent) work outside of their contracted work hours, as they are more productive. More than half (54 per cent) would move to another company for more flexibility.

“It’s not a fad,” says Mr Affronti. “Having the ability to work from anywhere at anytime helps employees be more productive and, as a result, is expected of the modern workforce. Workers look at the rigid workspaces and question their effectiveness. They want the option to go to an office or work remotely.”

He explains that the need for a ‘work anywhere, anytime’ policy is being driven by technology and the millennials and generations following them that have fundamentally different ideas about how asynchronous communication works.

“Look at the difference between chatting and calling and the implications for flexible working,” he says. “When you call, you have to be there in real time. When you chat, you have the option of leaving a message to be read later. You have a greater level of comfort and flexibility around working hours and greater opportunities for multiple staff collaboration.”

Workers look at the rigid workspaces and question their effectiveness.

Moving away from the fixed, centralised brick and mortar office and embracing the dispersed or even totally virtual workforce can be cost effective for the company. The cost of a fully branded, company-run location is high, and for organisations with very distributed workforces, doesn’t make financial sense. The use of shared and co-working spaces can be a cost effective and popular alternative.

“We use co-working spaces at Fuze, and it’s a great way to provide a small group of employees with a flexible place to work, collaborate, network, and be productive, when and where they need it,” says Mr Affronti.

He is keen to point out how important managers are to the success of this new flexible workplace, and again, he is speaking from first-hand experience.

“We have a very distributed workforce at Fuze. From a digital transformation perspective, productivity is something we discuss in depth with our customers,” he says. “One simple measure is to encourage managers to always have video on during remote meetings. It triggers engagement and focus and that can make people 80 per cent more productive.”

In spite of the huge benefits of remote working; however, the physical workplace retains a crucial role in the modern flexible work environment, simply because employees still value opportunities for physical interactions.

Mr Affronti says: “When we moved our HQ office 18 months ago, we had considered a traditional suburban campus complex with key individuals asked to relocate to our Boston headquarters. Then we realised through internal surveys that most of our Boston-based employees were only coming in three or four days a week. A large number of employees based outside the city of Boston were coming to the office less frequently. They want to work flexibly and remotely, but it is still important for them to have that physical connection with their colleagues.

“The same holds true for our offices in the UK. We have a larger hub in the Reading area and a co-working space in central London near Aldgate to give employees the flexibility they are seeking.”

Over the next decade, we will see AR changing how we think about workplace collaboration

Some companies have incentivised and enhanced office visits by remote employees, by offering free lunches and other events within great recreational spaces. Fuze’s New York City office hosts a weekly lunch event for staff.

“It’s a way of bringing your entire team, product development, engineering, marketing, and sales people, together, as many are often out on the road. That weekly lunch delivers a communal experience that encourages interaction, social catch ups, relationship-building, and the sharing of new ideas,” says Mr Affronti.

Looking to the future, he sees two major areas of technology becoming key drivers of workplace transformation. First, natural language interfaces will see greater use of virtual assistant devices, like Alexa, by businesses inside conference rooms rather than traditional speakerphones, for greater voice interaction.

“People are becoming more comfortable with talking to technology in increasingly flexible environments, for example, in a taxi or inside a manufacturing plant, and people are interacting in a more meaningful way.”

Second, is augmented reality (AR). “Being shoulder to shoulder with someone is still a great way to collaborate; however, in a remote setting, technology like AR provides a richer experience to bridge to this, replicating physical interaction in a deeper way. Over the next decade, we will see AR changing how we think about workplace collaboration.

“From my own observations at Fuze, people love this flexible way of working. It suits their work style, it delivers freedom, high levels of engagement and productivity, and they are happy. It creates a great place to work with dedicated and invested workers.”

Five myths about workplace culture

As the workplace continues to evolve, long held misconceptions about office culture are finally being called into question

1. More hours in the office boosts productivity

Spending more time at work isn’t a guarantee you’ll get more done or be more satisfied, says the Institute for Employment Studies. Working longer can, in fact, lead to greater operational costs and negative health effects, such as sleep deprivation, which can threaten productivity.

“There’s still a big issue with ‘coat on chair’ - the longer you’re there, the harder you’re working,” says Lizzie Penny, co-founder of the Hoxby Collective, which has no central office. “Our people work when they feel most productive and trust they are measured on output and outcomes rather than the minutes they’re at work.”

2. Open plan offices encourage more interaction

With no cubicles or walls to divide staff, open plan offices were intended to increase collaboration within teams and workplaces. But a 2018 study from researchers at Harvard University suggests the design could be counterproductive. Comparing the experiences of employees at two Fortune 500 companies before and after a move to open plan, the researchers found that face-to-face time between employees decreased by around 70% while the use of email increased in the range of 22-50%.

3. AI will take our jobs 

Advances in technology threaten certain types of job but also bring new opportunities. AI-assisted analysis of employee data can help build better benefit packages, for example, while improvements in online communication and meeting tools can support more remote and flexible working.

Emerging technologies will create new jobs and bring human skills to the forefront of work. Yet, according to Deloitte, the newest generation of workers feels unprepared for the changes the Fourth Industrial Revolution will bring: fewer than three in ten of Generation Z currently in work feel they have the necessary skills and knowledge.

4. Higher salaries mean happier staff 

Remuneration is, of course, important when it comes to staff satisfaction but it’s not the only thing that motivates today’s workforce. A good working environment, commitment to social goals and the wellbeing of the workforce are all increasingly cited as more important to employee contentment than a pay rise.

Research by academics from the universities of Sussex, East Anglia and Sheffield suggests that performance-related pay rather than profit-related pay is more beneficial to job satisfaction, trust in the business and commitment to an organisation. Ultimately, greater personalisation of rewards and compensation will help get the best from employees.

5. All work happens at the desk 

This is an outdated misconception, says Zoe Humphries, senior workplace consultant at Steelcase: “Work can happen in many places since it’s not just typing and looking at a screen. As technology evolves, the reliance on the desk will diminish as people require new postures to interact with their tools and colleagues.”

According to Gallup, 43% of US workers already work remotely some of the time. Employers need to think how to support dispersed teams and how this might change office design. “In Slack we have the boardroom, the classroom, the water cooler,” explains Ms Penny. “It’s quite a leap to have an entirely remote workforce - you have to start with something familiar.”

The dark side of inflexibility

In a culture of remote working and all-pervasive technology, inflexibility is the enemy of collaboration

The benefits of remote working are so established that the question needs to be asked: why do some companies (and employees) resist?

It’s not a trivial question. Many well-established and successful companies are still organised in ways our grandparents would recognise, even though the nature of work has fundamentally changed from hierarchical to peer-to-peer - The Harvard Business Review says that analysis of its own data for the past two decades shows that the time spent by managers and employees in collaborative activities has ballooned by at least 50 per cent.

The best people will want, and have the negotiating power, to work more flexibly

One question is whether remote working is appropriate for junior employees who may need frequent mentoring. Jeff Fox, a principal at consultancy Aon, says younger employees starting out in their careers may miss out by not being office-based. “They want social interaction, the benefits of working with others to learn. It’s different for older employees who have different priorities,” he says.

Pieter Levels of Nomad List, the online community for digital nomads, agrees. “One of the biggest challenges of digital nomadism is the social and community aspect,” he says. “Most people create their social network in high school, university and work, all in a particular place. Nomads consciously leave that place to travel the world and live in places where they do not have that background. Science tells us making friends takes proximity (being physically near someone) and repetition (meeting repeatedly).”

Being ‘footloose and fancy-free’ is not always as pleasant as it is made out to be.

“Mental health is something that doesn’t get discussed by digital nomads. I have seen people who have suffered burnout or with bad health issues. It is very difficult to switch off in a world that is constantly connected, so you need to find ways of keeping fresh,” says Kash Bhattacharya who works with tourism destinations around the world on their marketing.

Many well-established and successful companies are still organised in ways our grandparents would recognise

Part of this is taking it slowly, believes Levels.

“Travel slower (moving every three to six months), come back to the same few places (I have about three places I rotate), and arrange with people to go to the same places together. Even then it’s challenging but doable,” he says.

A company called Minaal, which makes durable luggage and accessories for travellers, has addressed this issue. Its team is based all round the world and is highly mobile.

Founder Jimmy Hayes says, “In the past week I’ve had ‘meetings’ with team members and collaborators in Japan, France, the UK, US, New Zealand, Vietnam, and Serbia. Next week the location profile could be completely different.”

Hayes tries to get the company together in person a few times a year. “It’s an ongoing challenge to fine-tune the optimal amount of in-person time, but that in itself helps us be very aware of which approach works best for each phase of the business cycle,” he says.

Better collaboration technology is making things easier too. Seeing a fellow employee over a video call beats email every time when it comes to feeling part of the same team.

“We spend our days inside Asana, Quip, Slack, Skype, Helpscout, HubSpot, Google Apps and Shopify,” says Hayes.

As a leader, do you really think being inflexible is a competitive advantage?

This leads to lower costs for the company.

“By being flexible and mobile, we’re able to relocate to quickly take advantage of opportunities or douse fires. This means a tiny, globally-distributed team can operate as if we’re a large multinational,” he says.

He adds that it is instructional to look at trends that transcend industries. “Almost every market is fragmenting, becoming more niche, and being disrupted more frequently. In that world, as a leader, do you really think being inflexible is a competitive advantage?”

Mr Levels of Nomad List says companies who do not think more creatively will lose their edge too. “I think companies should do what they want but they’re missing out on a worldwide talent pool that competing companies can tap into when hiring remotely. Also the best people will want, and have the negotiating power, to work more flexibly.”

A final question is whether employees would sacrifice some salary in exchange for the freedom to work remotely. “A few years ago maybe, but less so now,” says Aon’s Jeff Fox, “However flexible working is worth a great deal to an employee who values it. Would they trade back to an office, inflexible job for the same money? Probably not.”

Your year as a remote worker

What happens once you’ve made the transition from the humdrum workplace to digital nomadism? 

From the window behind your desk you can just see Rio’s Ipanema beach. The last street lights are blinking off as the sun rises. You’ve been up since 5am - the only time of day when you, the London head office and your colleagues in Tokyo are in the same time zone. This morning’s video conference was only a quick update but it’s great to check in ‘face to face’.

It’s hard to believe that just six months ago you met with your boss to discuss your plans to travel and work for the next year. It was a negotiation rather than a demand: what work or projects would be best suited to someone outside of headquarters? What tools and technology would be needed to make the transition as smooth as possible?

You’ve learned that you don’t have to be online to prove you’re working

As it turns out, you can work from almost anywhere so long as the internet connection is fast and stable and you’ve got your laptop. Before picking your next location, you do your research. Sometimes this has meant choosing cities over rural locations and contacting people on the ground for a first-hand assessment of living costs, climate, internet speeds and co-working spaces for when you need more human contact - though your current early starts rule this out. Rio’s been great for the past month, but you’ve heard it’s possible to work from Bali, escaping city life, and it might be cheaper too.

Slack, Whatsapp, FaceTime and your web camera have become essential pieces of kit. Within Slack, a whole remote office environment has been created so you can still catch up informally with colleagues in the ‘coffee break’ channel, comment on the office redesign in ‘office life’ and join meetings in ‘the boardroom’.

Sometimes, if you’re collaborating on a project or just want to recreate having a desk neighbour two of you will leave your webcams on while you work. The background noise and chatter recreate the informal aspects of office working and help you feel part of a team. Crucially your colleagues have learned when you’re available and when you’re not, and you’re careful not to log in outside of working hours. You’ve learned that you don’t have to be online to prove you’re working. This is essential or the tools that enable your remote working will take away the work-life balance you hoped travelling would provide.

You can work from almost anywhere so long as the internet connection is fast and stable and you’ve got your laptop

When you’re in a time zone behind London, you have the afternoons free to work on more strategic projects and planning, free from the distraction of meetings or enquiries from colleagues. Working remotely has made you feel more proactive at work as a result.

Soon you’ll return to London - every quarter you go back to meet with colleagues in person. You’re looking forward to telling them about your adventures; you’re not looking forward to the UK in winter. But that’s weeks away. For now, it’s a day of work followed by an evening run along Rio’s most beautiful beaches and drinks in the samba bars of Lapa - your old work life can wait.

“You disconnect from the everyday of the firm and come back with a fresh pair of eyes”

Design and architecture practice 00 is based in London but project director Tim Ahrensbach, 32, has spent the past 16 months in Mexico City. The decision to work 5,500 miles away from HQ was prompted by a work opportunity for his Switzerland-based partner. In a previous role Mr Ahrensbach had worked from six countries in two years, then divided time between London and Switzerland. This was a chance to live in the same city.

In Mexico, the time difference proved very challenging: “The first thing I’d do when I woke was check my phone. I manage several co-working spaces and something might have happened overnight.”

Working five hours behind London did lead to less firefighting and more planning, learning and strategy work in his afternoons. Managing people remotely and feeling removed from decision-making has been tricky, he says: “If you look at work as only delivering a project then it [remote working] works - things gets executed well. In terms of the stuff you do informally that’s not billable to a specific product, that is lost.”

The “rapid collaboration and idea generation” of design work is also hard to recreate remotely. But working nomadically has led to new endeavours, says Mr Ahrensbach, who will soon split time between Denmark and London: “You disconnect from the everyday of the firm and come back with a fresh pair of eyes. I don’t think I would have got to my next project if I hadn’t gone away. My next step could have been outside the company.”