Have you ever found yourself in one of those “Remote work is the greatest thing in the world” conversations? I did a few weeks back. I was scrolling through a tech-related group chat from the back of an auto. I was helplessly stuck in Bengaluru traffic.
Someone was talking about how remote work is the greatest thing ever, and everyone piped up in agreement. Having not moved an inch in the past several minutes, I offered my viewpoint:
remote work, like everything in life, comes with trade-offs.
It’s 2020. Everyone is obsessed with remote work. It’s not just working from home (WFH), it’s working from farms. It’s kind of the norm now. No one wants to seem lame by saying anything critical about work-from-home. Somebody has to chime in and speak the truth about the drawbacks of remote working.
Suspend all preconceived notions about work-from-home for the length of this article. Let’s carefully and logically evaluate the pros and cons. Let’s address the all-too-seldom asked questions about work-from-home. Let’s acknowledge that some scenarios lend themselves to remote work and others do not.
If you don’t feel like reading the whole article, just read this next sentence:
The fundamental trade-off of remote work is between immediate, uncomplicated communication, and access to talent.
Positive Effects of In-Person Communication
Frankly, it is shocking how often I need to defend the clear net positive effects of in-person communication. In the midst of this incredible tech boom, we often undervalue the importance of in-person communication is. Academic researchers have unambiguously concluded the improved efficacy of in-person communication. Whether you explain it with mirror neurons, non-verbal queues, or physical touch, the research is strong.
Communication is a collaborative effort. As researcher Robert Krauss said, “Any communicative exchange is implicitly a joint or collective activity in which meaning emerges from the participants’ collaborative efforts.” I wrote about how I see business interactions as collaborative processes here. The most conducive setting for a collaborative, iterative, creative process is in-person. Check this research out: requests are 35X as likely to be granted through in-person requests than over email.
I can tell you with the utmost certainty that in-person is best. I know this from thousands of sales interactions. Video is second best, followed by phone and email in last place. If I am emailing, my goal is to get a video call. During my video call, my goal is an in-person meeting.
I can tell you stories of times when clients told me that they 100% are not ready to buy, but agreed to an in-person meeting. In those meetings, we collaboratively created a use case that resulted in a sale. For all the salespeople, listen: shoot for in-person!! You will feel the difference.
This applies across-the-board for business. Founders, product people, marketers, listen up: anything you are working on will move faster and end up better if it is built in-person. We built Instaclean (we’ve been called the “Marie Kondo for email” app, which is pretty cool) 100% in person, in less than three months, with a team of four. I guarantee that timeline would have been extended ~40% had we been remote. Culture and sense of community are also hindered (with some rare exceptions) when work is remote.
I have often felt the strong tangible effects of “the law of getting shit done in-person”, which goes something like this: Shit just gets done easier in person, period. It’s not science-backed, it’s my experience.
I am not going to spend any more trying to convince you of something that is so well-documented. I encourage you to dive into the large and fascinating body of research, some of which I have linked above.
Positive Effects of Increased Access to Talent
If you are only hiring people in one city, you can only hire people who live in that city or are willing to relocate. If you can hire people anywhere in the world, you can hire anyone anywhere. This is a massive benefit, as your team is almost always the most important part of your business. If it is constrained, you are constraining your most important resource. You are kneecapping the business by not being open to everyone, from all over the world.
If a candidate is the perfect team member, that’s what is most important. Not that they are a digital nomad who lives in Bali. Also, the network effects of having business roots in multiple areas can be powerful. My startup has strong networks in Estonia, India, and the US. We can play whichever card we like depending on who we are speaking with, and it allows us to tap into a wider network.
Also, wage differential plays a role. If you hire in a relatively higher value place (I like to say “higher value”, not “cheaper”), then you can get more value/production for less capital. In a capital-constrained startup situation, this is critical. This puts my startup at a massive competitive advantage, allowing us to scale up in ways that companies based in the Bay or London could not.
By my estimate, value/output (assuming resources are deployed properly) increases roughly tenfold in India compared to the US. That means cutting costs to just 10% of current costs, or increasing output by ten times, all other things equal. Clearly, the positive effects that remote working has on access to talent should be top-of-mind for any business owner. Keep in mind this effect is only at play if talent is relatively more expensive in your location compared to where you are hiring.
The Opportunity Cost of Remote Work
Any discussion of remote work arrangements (or, really any business decision for that matter) must be discussed in terms of opportunity cost (e.g. ‘trade-off’). If a firm has remote workers, then it is choosing access to talent at the expense of communication. If it chooses an in-person arrangement, the firm is choosing communication at the expense of access to talent. Which is right? That depends on what you are trying to achieve and what your constraints are.
No business has to be 100% remote or non-remote, so most will choose a combination of the two. A leader must decide which goals to optimize for based on business constraints and desired outcome, which directly impact opportunity cost.
The four questions below provide a framework through which we can develop a viewpoint on remote work for each given organization.
The 4 Questions to Decide #WFH or Not
Let’s assume you have a startup and are trying to figure out if remote working should be leveraged in your firm. Here’s the set of questions to go through to arrive at the best conclusion.
What Is My Desired Outcome?
Do you want to create the next Facebook? Is it a boutique consulting or design agency? Crypto platform? Digital nomad InsureTech? These all give clues on whether to be remote or not.
What Are My Constraints?
Do you have a product, but no capital to market it? Do you have an idea, but no product? Are you later-stage with a client-base? Another common constraint is family circumstances. There might be a team member with a sick parent that she is caring for in a certain city.
What Are The Pros And Cons Of Remote Work?
All other things equal, common pros of a remote arrangement are:
- Larger hiring pool => more candidates to select from
- Remote jobs generally more favorable to candidate than comparative in-person jobs
- Access to workers in parts of world where cost of labor is potentially cheaper
- Business overhead shrinks due to employees using own equipment, no office space
- Timezone issues (not syncing)
- More difficult to vet hires compared to in person
- More difficult to manage team
- Increased barriers to communication
- Decreased sense of camaraderie
What Are The Pros And Cons Of In-Person?
All other things equal, common pros and cons of in-person arrangement are:
- Decreased barriers to communication
- Increased team effects
- Increased sense of collective belonging/purpose
- Law of Getting Shit Done in Person
- Hiring pool limited to your city/people who will relocate
- Increased overhead costs of maintaining office space
- Have to compete against remote jobs
- No access to workers who are in potential higher-value (lower cost) geographies
The Next Facebook
If you are building the next Facebook (e.g. 10,000+ employees, venture-backed, multi-billion dollar startup) I would highly, highly suggest having a core in-person team. But, in early-stage companies, a lot of the ‘magic’ in brainstorming sessions is captured in person.
The in-between times are where some of the best ideas and conversations happen. If you are remote, you are closing yourself off to that. Of course, if you get well on your way to being the next Facebook you can open up remote roles. Also, social media platforms and online communities can be used to connect with potential teammates.
Easily Replicable Business
Let’s say you are trying to set up an easily replicable business to earn passive income, like a drop-shipping or data entry company. This is a great business to consider remote working. You can leverage overseas teams to get things done effectively at cost. Plus, there are no brainstorming sessions to do, so you are not missing any of the ‘magic’ of in-person.
Digital Nomad-Esque Business
If you are a digital nomad, your whole thing is not having an office. So, even if you are trying to build the next Facebook, maybe you are trying to do it with a fully remote team. That’s awesome! Do it. If it’s part of your company’s DNA/ethos, then it’s not a question of anything else, since that comes first.
Maybe you are opening up a more traditional business like a pet shop or an accounting firm. In this case, lean remote. Make sure you are solid on the processes that you will be ‘outsourcing’ remotely before you outsource them. Else you risk being unable to evaluate good and bad team members.
Remote work is often romanticized and discussed in a way that isn’t really honest. Often conversations surrounding remote work do not address the trade-off of remote work. In order to have an honest and productive conversation surrounding remote work, you must think through the trade-offs (e.g. what is being given up in exchange for remote arrangement). Whatever your working arrangement, it needs to serve your desired outcome and fit within your constraints.
Stop Remote Work FOMO. Start Discussing the Trade-offs.
[The article appeared first on Medium and has been reproduced with permission.]