The Downside of Remote Work

The Downside of Remote Work

June 11, 2021

I came in this morning planning to write about the downside of remote work. It isn’t for everyone. In fact, it creates new long-term problems for businesses and will continue to do so. (For a related topic, see my previous column on returning to work.)

Coincidentally, this morning the Wall Street Journal posted an interview with Jamie Dimon, the CEO of JP Morgan. He said about remote work in part, “It doesn’t work for those who want to hustle. It doesn’t work for spontaneous idea generation. It doesn’t work for culture.”

He is right, and remote work is a lot more threatening for Main Street businesses than it is for large corporations like the one he leads.

I have preached for decades that culture is the secret weapon of smaller companies. They can’t fight on the same financial terms as big corporations. There is a reason so many regulations regarding issues like family leave are limited to employers of a minimum size. Small businesses can’t afford to just “do without” an employee for weeks or months when that person is the only one who handles a particular area of responsibility.

The Main Street owner’s secret weapon

In a Main Street company talent is quickly identified and (usually) rewarded. Those who, in Dimon’s terms “want to hustle” can move up more quickly. Real ability and ambition are too scarce a resource to ignore.

Smart business owners extend the culture of the business by their individual efforts. Knowing about their employees, their families, and their pastimes goes a long way to making them feel that they belong in the company. It’s hard to have those casual “discovery” conversations on Zoom, and almost impossible if there are multiple participants in a video call 

Our own business is built on collaboration. Almost everything gets passed around for comment, and we frequently meet via video to discuss things. It is often a difficult process, and clearly takes more time than if we could sit around a table.

We have employed remote workers for over a decade, but each one worked in our offices at some point. Our newest hire is in 2 days each week, and I am certain that she would not have melded so well with the rest of the team if she was entirely remote.

The biggest downside of remote work

When you erase the cultural advantage of a small business, what do you have left? In the harshest terms, money. That’s a battle we are guaranteed to lose. If the only differentiator to the remote employee is the amount on his or her automatic payroll deposit, we are well and truly screwed.

When we interview new clients, one of our questions is “Why do customers buy from you?” If the answer is “strictly on price,” it had better be a commercial bid contractor or an Internet-based retailer. In any other type of business, it indicates a problem.

Think of a remote workforce as an Internet-based human resource pool. If you can’t get noticed for your effort, if no one will know you as an individual, then the only differentiation between employers is price.

It is happening already. I have a client in Texas who is losing his tech remote workers to Silicon Valley. The employee of another client in the Midwest was recently poached by a New York firm. The pitch is simple. “You are already working from home. Why not do it for twice the money?” (That is not an exaggeration- both cases involved a doubling of salary.)

Employers as commodities

If someone approached your remote workers with a similar offer, how would you counter? I’m guessing that you can’t. I know that many of those who leave for a remote job with a giant employer won’t be happy in the long term. It’s the epitome of being a cog in the wheel. How many, however, will be willing to halve their income to feel more appreciated?

My message is simple. The downside of remote work is that it turns employers into a commodity. A remote employee’s home office looks exactly the same today as it did yesterday. It will look the same tomorrow. If you want to maintain any hope of competing with the giants, the faster you restore in-person contact with your employees, the better chance you will have.

If you don’t take advantage of your cultural superiority, the ability to run your business may be decided by someone else’s department manager a thousand miles away.