The New Normal of Remote-First Employees.
Wow, it seems like this has all happened fast. Nearly every company is embracing remote employees. Hearing about a startup that still has an office has become the exception. I’ve personally started a few new engagements remote-only and have had several friends start full time jobs remotely. It doesn’t look like we will see a return to “normal” office work for a while — if ever.
So what does it all mean? What are the new best practices? As someone who’s done lots of hiring, and is involved in hiring for several companies, how do we navigate this new normal?
Why has this happened so quickly? To begin with, I think most people don’t understand just how expensive office space is. Especially your high-end “creative” office spaces so desired by “cool” companies. For office workers in a top market, it’s easy to spend more than $500/month per employee on office space. Add in the snacks, game rooms, etc. Add in janitorial services and fancy standing desks. Oh, and your lease is long, so you need to budget ahead. That means your office is twice as big as you need at the moment — so your budget at $500 just became $1000 and with perks it’s closer to $1500/month per employee loaded into the real estate line of your budget. For tech businesses without inventory or high COGS, employee salaries are your biggest cost, followed quickly by real estate costs. These are far and away your biggest costs. And real estate is often locked in at 5 years or 7 years, etc. CEOs and CFOs were quick to jump on the no-office bandwagon. Looking at these numbers, it’s easy to see why.
Here’s the problem. The office space wasn’t just a place to work. Snacks and kegs showed up in Silicon Valley for a reason. These spaces and perks keep people working. Makes them want to hang out. Spend time with co-workers. When building something new, like in software, the hardest part is getting to the best decisions — how something works, taking care of customers, getting the UI or the engagement just right. More conversations. More use cases. It’s vital to get your team working in the same direction. The office and the comradery helped spur that.
Let’s get my bias out of the way — I don’t really like working from home. But I’ve done it a lot. I ran my startup from my house for a year. I’ve spent the last two years with two different companies working from home (or more precisely being the so-called “digital nomad”). It can work. There are some benefits.
But it’s not ideal. I do like the flexibility, as will your employees. Increased flexibility will probably never be rolled back. That’s generally society making forward progress. But what about the other needs, roles, and benefits that offices provided? Team building? Loyalty? Collaboration? FOMO? Putting in the extra time for better results?
Where does that leave us? Here’s my suggestions:
● Team Building / All Hands: In general I like a strong “All-Hands” culture. Do it right. Make the presentation crisp. DO THESE IN PERSON as much as possible. I like the quarterly cadence. Depending on the team layout, how about quarterly in person meetings? Consider the numbers we went over above. With these savings, you can fly everyone in, and pay for hotels and meals quarterly, and it’s still cheaper than office space. Bonus: you probably had an event budget before too!
● Small Teams: Get together more often. Have regional events. Do virtual events if you have too. More than just zoom. Go a bit further. The zoom happy hours aren’t that great — but find ways to spice these up. I’ve seen different tactics work. Your HR team should help. Give teams small budgets. Use external events or other things as extra excuses to get together. Double up on that budget. If you have an All hands-type event once per quarter — and then you find ways for other important teams to get together another time in the quarter — you are almost to a monthly in person cadence. I would aim for that if possible!
● New Hires: This is a trend I’ve been seeing a lot of. New hires starting from home offers a terrible experience. If you haven’t been through it before, find a way to experience it. It sucks. You’ll see very quickly how mind numbing and painful it is. I remember starting jobs in the office and not having strong onboarding programs, so us new hires wandered around wondering what to do. But you know what? Someone always showed up. Some nice coworker told you something about the kitchen. Someone helped with access to a file or system you needed. The newness of the office helped with excitement. You got some of the real dirt at those first few team lunches. WE NEED THIS. How much did you spend on recruiting? That new hire probably costs you $20k-$50k. And you can’t find the time or budget to help get them properly onboarded? Well write that cost off, cause you aren’t going to get what you want out of that employee. I can’t believe I haven’t seen more discussion here on this topic!
I believe the increased flexibility is here to stay. But to win, people need the comradery driven by in-person activity. It doesn’t need to be an office. Or a full time office. But take that budget and allocate it towards meetings. Events. Ways to better connect. You can’t just cross out that expense and think things will just work out, especially when it comes to new hires. It’s a vulnerable time. Speed matters and that’s a place you can lose a lot.
Yes, I’m bullish on AirBnB (lol) — we still need travel and business travel especially. Event companies are undervalued right now. We’re gonna need this stuff! Don’t let your business or team suffer too long. Find ways to win in this new environment.