One could say that today's business world exists in two parallel universes. On one side, there is the fixed physical presence and strict scheduling required to operate manufacturing facilities, laboratories, or retail establishments. On the other, there is the production of information, supported by knowledge workers who could do their jobs equally well from New York or Wichita, day or night. Most companies already operate, at least partially, on both planes. But the ability to distinguish between the two, and meet the unique needs of employees in both groups, will be an increasingly critical business issue for the next decade.
Since the dawn of the industrial revolution, companies have brought together armies of employees under one roof, creating economies of scale to be watched and managed to great efficiency. But the last 15 years of technological advancements have quickly rendered this "centralization" model all but obsolete. E-mail, the Internet, cell phones, videoconferencing, and other tech tools provide mobility and connectivity to virtually any employee who would normally sit in an office or cubicle. In many cases, there is no longer a need for these workers to reside down the hall from the manufacturing floor. This new reality creates a valuable opportunity for companies to re-evaluate their real estate needs and even improve business performance.
That's not to say it's as simple as letting employees work from home. Technology may have loosened the ties that once bound employees to the corporate office, but it takes more than laptops and broadband connections for companies to truly realize the high-performance potential of a distributed work force. While the ability to work from anywhere in the world holds value on its own, it is no substitute for providing employees with the complete resources, support, and human interaction they need to be most productive and build rewarding careers. In the future, the most successful companies will find a balance between mobility and the positive aspects of the traditional corporate facility.
The Changing Work Force
There is no question that today's networked world makes possible the vast numbers of telecommuters, workers in satellite offices, and those who do business from the road. Evidence suggests, however, that technology won't be the only factor driving this trend in the future.
Shifting demographics are also playing a role. The U.S. Bureau of Labor Statistics predicts a more than 20 percent increase in the number of professional and related jobs between 2004 and 2014. This represents a major shift toward "knowledge work," which will have a significant impact on our formerly traditional working practices. By its very nature, knowledge work is not tied to any specific location. Assuming they have a suitable technology and communications infrastructure, knowledge workers can operate from remote locations as effectively as they would in an office.
In addition, legions of aging baby boomers are tending to stay in their jobs longer, with many of them looking for part-time opportunities and flexible hours. Meanwhile, the next generation of our work force is already embracing the mobile philosophy, as most young people today have grown up with cell phones and the Internet.
These changing dynamics will alter the work landscape dramatically by bringing the relationship between living and working closer together. While big cities will remain important metropolitan hubs, regional and neighborhood workplaces will become an increasingly important part of the business location equation. Companies that understand and embrace these realities stand to gain a competitive advantage and benefit in a number of areas.
Greater Cost Efficiency
Aside from payroll, real estate represents the largest expense on the balance sheet of most large companies. Some of these costs may be unavoidable for companies with industrial or retail facilities, but nearly every business employs some percentage of office workers (core functions such as sales, marketing, communications, finance, human resources, etc.) whose physical location is largely irrelevant.
By mobilizing these workers and thereby reducing the need for company-owned office space, the opportunities for savings are enormous. In fact, studies show that as much as 50 percent of corporate office space sits empty at any given time, as knowledge workers travel for business, take vacations, or work some days from home. The distributed work force strategy helps reduce this office space waste in favor of a "pay only for what you use" model.
Furthermore, streamlining the corporate real estate portfolio makes businesses more agile in the marketplace. As companies move away from a fixed-cost structure to variable-cost models, they can reduce their capital requirements and risks to enter new markets, while maintaining the flexibility to expand or withdraw as business needs dictate.
For example, sometimes location is still important even for employees who aren't based in a central office. Salespeople and consultants may need to place themselves in close proximity to customers or business partners. By cutting the cord from the corporate campus, these employees are freed to go where they're most needed, without the expense of establishing and then uprooting an office with each move.
Recruiting and Retention Incentives
cost savings is perhaps the most obvious benefit of a distributed work
force, there are other significant advantages that previously have been
overlooked by most decision makers. For example, workplace flexibility
is becoming a differentiator in the global competition for talent.
a shortage of skills starts to hit hard in the coming decade and
companies battle to acquire and retain knowledge workers, providing a
flexible work environment will be as important as delivering a
competitive pay package and a stimulating job.
will want to work from a neighborhood office near where they live,
rather than endure a long commute to the corporate campus. Some will
want to stay connected while collaborating with clients and employees
remotely. Still others will want to work from home on a part-time or
even full-time basis.
Employers who offer creative solutions
will lead the way in attracting and retaining the most talented workers
- the very employees who will help them win the marketplace.
shift to mobile working can even improve productivity. While some
managers instinctively assume that employees working away from the
office will be less productive, various studies have found the opposite
to be true.
In an office environment, it is easy for people to
hold unnecessary meetings, attended by employees who have only a
marginal interest in the issues. When people work from different
locations, holding a meeting means traveling distances - and they will
do so only if they are convinced it is worth their time. Similarly,
people who work remotely may experience fewer distractions, such as
fewer people stopping by their desks to chat or have informal
The Management Challenge
the benefits - and the growing business imperative - of providing a
more flexible work environment are becoming apparent, managing this
kind of change presents several major challenges. To begin with, many
organizations lack the necessary experience to manage a distributed
work force. For decades, most companies have built and expanded working
practices around a business assumption that the bulk of their employees
will be in one place at the same time.
There are also challenges
from the employee perspective. Many remote workers feel isolated, cut
off from the rest of the company, and lacking of the support and
professional resources their office-based counterparts enjoy. While
their output may increase, they may long for the social interaction and
team collaboration that face-to-face environments create.
To overcome these challenges, employers and employees alike must adopt a new mindset regarding remote working.
true mobile work philosophy goes far beyond allowing employees stay
home. Creating an efficient, innovative, and high-performing
distributed work force requires two core capabilities: first, a
technology and communications infrastructure to keep workers connected
- not just to the Internet, but to the pulse and nerve center of the
organization; second, the ability to provide office- and
community-related services across multiple environments, accommodating
home-based workers, satellite offices, and frequent travelers equally.
companies aren't meeting both of these needs on their own. And when
they are, most aren't doing it cost-effectively. Getting deeply
involved in the process of placing and equipping remote workers is a
distraction from their core businesses and can be more of a hindrance
than a help.
Increasingly, companies are turning to outsourced
solutions that allow their employees to work wherever, whenever, and
however they choose. Networks of business lounges, drop-in offices and
meeting rooms, videoconferencing, virtual offices, and other workplace
options enable mobile workers to stay connected, collaborate and
innovate in unique ways that work best for them.
Whether it's a
startup firm or a multinational corporation, thinking past the outdated
notion of "everyone in one place" and embracing the inevitability of a
distributed, nimble workforce is what it truly means to work without
boundaries. It's a strategic business model that today's talented
workers prize, and tomorrow's successful companies will undoubtedly
Mark Dixon is chief
executive officer of the Regus Group, the world's largest provider of
workplace solutions. Regus operates a global network of more than 950
business centers in 400 cities and 70 countries. Visit the company
website at www.regus.com.