Reactions to Yahoo! Eliminating Remote Work
The technology
company Yahoo! caused quite a stir in
late February (2013) when an internal memo describing a new policy that
eliminates work-from-home arrangements among its employees was leaked to All
Things D, a technology-industry blog (below
for a link to the All Things D post which includes the memo).
Clearly any
discussion about telecommuting and remote work options should involve an
analysis of the trade-offs present between physical co-location and
geographically dispersed employees, and a critical and up-front consideration
will always be the unique characteristics based on the type of work being
performed. But this post is focused on reviewing and summarizing claims made
specific to Yahoo!'s decision to ban remote delivery among its employees.
The reaction has
ranged from praise and criticism to claims of a hidden agenda by CEO Marissa
Meyer, as well as extrapolations to potential impacts on gender issues and the
future of workplace relationships between employer and employee. Some writings
have been more emotional reactions than others, some are more opinion based,
and some cite studies and data to provide evidence on their claims.
Most of us have
access to the same articles, blogs, and Twitter comments, so let's get to it.
Claims specifically made in the Yahoo! memo:
- Communication and collaboration require physical co-location, or "working side-by-side", to be effective
- "Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings"
- "Speed and quality are often sacrificed when we work from home"
The Good: The Supporters' Claims
- Physical co-location increases innovation
- Physical co-location is necessary to create or shape a desirable organizational culture
- CEO's job is to lead and make hard decisions, not champion work-life balance
The most common
arguments in favor of the new policy involve innovation and company culture.
One article quotes a professor from San Francisco State University, John
Sullivan, as saying studies support the claim that innovation levels are higher
with physically co-located employees. But the claims about company culture
being driven by physical co-location appear to be more conventional wisdom that
is widely accepted but not necessarily supported by research (or at least no
studies were provided to defend this claim).
In addition to
similar claims about employee co-location directly impacting innovation and
organizational culture, Bailey (2013), supports the decision in her blog post
by claiming that a CEO's job involves making hard decisions that are best for
the company and leading, not championing work-life balance. Yet, this claim
appears to assume that difficult decisions on their own are a reflection of CEO
merit, separate from the quality of the decision itself or the criteria on
which the decision was based. It also appears to assume that the decision is an
example of leadership, that the decision is indeed in the best interest of the
company, and that championing work-life balance could not be in the company's
best interest. In addition to these assumptions, she does not provide any
direct evidence for her claims other than the claims made in the Yahoo! memo
itself.
(Note: I am not
trying to single out Bailey here, but she made claims about the responsibility
of a CEO that were unique to her blog post and not found in the other articles
reviewed.)
My thoughts on the praise …
- In terms of the relationship between innovation and employee co-location, I applaud the claimants for seeking evidence to support their claim from someone familiar with the research, but I also would be interested to learn more about these studies and what they specifically purport.
- I would be very interested to see what the research says about organizational culture and its relationship to employee co-location, or if this research is nonexistent or slim, I would recommend it as an area that needs more attention.
- On the other hand, I would also be very interested to see what the research says about the ability of technological tools, such as social networking and instant messaging, to impact organizational culture.
- Bailey appears to make a couple assumptions in her blog that are not accounted for in the conclusions she has drawn. I would be interested in how the decision was made, what criteria it was based upon, more so than assuming a hard decision is valuable simply due to its difficulty.
- I would also be interested in what information Bailey used to draw her conclusions.
- Bailey also mentions that leading is a core responsibility of a CEO, but does not describe what she means by "lead" (which is a quite complex construct that involves a number of theories and interdependent variables), nor does she appear to connect leadership to the new policy or how the policy was decided upon.
The Bad: The Critics' Claims
At least some amount
of telecommuting, or remote delivery:
- Increases productivity
- Results in benefits such as lower turnover, increased work quality, increased employee motivation, greater job satisfaction, and increased loyalty to the employer
- Increases employee engagement (although the opposite of this claim is also made)
Eliminating any
option for telecommuting, or remote delivery:
- Limits the ability of a company to recruit, hire, and retain the best talent
- A policy that demands physical presence during work hours, without related policies to clarify expectations during non-work hours, potentially violates the Fair Labor Standards Act
- Overlooks the root cause of management quality as the source of stated problems by mistakenly attributing the cause of the stated problems to geographical dispersement of employees.
The list of
criticisms levied at the new policy is longer than the praise, and based on the
articles reviewed these criticisms appear to be better supported by evidence.
The articles cite specific studies and data to support claims that allowing
employees some level of remote work delivery results in benefits such as higher
productivity, lower turnover, increased work quality, increased motivation,
greater job satisfaction, and increased loyalty to the employer. The claims
that productivity is increased when remote delivery is an option appear
especially strong, they appear to have the strongest evidence, which directly
contradicts one of the claims made in the leaked memo that the policy is
intended to increase productivity and quality. I found no discussion in the
articles about the relationship between physical co-location of employees and
speed, but arguably speed could be considered within the construct of
productivity (if this is supported by the studies cited that show remote
delivery increases productivity).
There also appears
to be a contradictory claim regarding employee engagement related to remote
work options. While one study cited shows increased levels of engagement among
telecommuters, other articles quote individuals that claim engagement is
harmed, or made more difficult, when employees are not physically co-located.
Given the support for telework increasing employee engagement is provided by a
study, as opposed to opinions provided, this is the more likely conclusion.
Additional criticism
levied at the new policy include its potential impact on Yahoo!'s ability to
attract and retain the best talent, which appears to be based on two
assumptions: (1) that the most attractive potential employees will prefer
companies with more flexible options, and (2) the talent pool from which
employees are recruited becomes smaller and more limited by where the potential
employees live. The first assumption is not supported by any evidence provided
in the articles, but is arguably supported by studies that explore factors
employees take into account when deciding on an employer. The articles also
point out that potential employees with life situations that require more
flexibility, like young children, a disability, or aging parents, might be
dissuaded from considering Yahoo! as an employer of choice. The second
assumption is supported by simple geography, there are more people to choose
from the larger the geographic area from which people are selected.
Fell (2013) goes one
step further an article she authored by pointing out an apparent hypocrisy
provided by the policy: requiring employees to by physically present at an
office during specified hours is not counterbalanced or qualified by any
statement or policy that employees can in turn be expected to be unavailable or
unwilling to perform work outside of those hours, essentially creating an
expectation to work and be available during off hours without additional
compensation, which she claims is a potential violation of the Fair Labor
Standards Act. This point appears to be exceptionally salient given that Yahoo!
is a technology company, and anyone that has ever worked in information
technology (IT) can tell you that a fair amount of the work involved takes
place outside of regular business hours (such as tasks that take place outside
of business hours to reduce disruption to day-to-day business and problems that
arise with hardware and software at any time). But only Fell's article points
out this potential hypocrisy, and none of the articles I reviewed brought up
the unique nature of IT work.
Multiple articles
also point out that the banning of remote delivery options for employees appear
to be misplaced, in other words it fails to address the root cause of the
problems attempting to be remedied: poor quality management. The claim here is
that problems that arise from telecommuting are the same problems that arise in
an office when management quality is poor, but the problems are simply more
visible when telecommuting is involved.
Examples provided of poor management that contribute to the stated problems of
productivity, quality, speed, collaboration, and communication include unclear
goals and objectives, unclear roles and responsibilities, unclear expectations,
and lack of communication. While the articles reviewed do not cite evidence to
support the claim made directly related to telecommuting, these are well
documented examples of poor quality management that are going to negatively
impact business success and a company's employees regardless of their physical
location.
My thoughts on the criticism ….
- The evidence on productivity is a big one, and appears it could in fact end up being counter effective to one of the benefits Yahoo! intends to realize with its new policy.
- Note that the claim made that remote delivery increases engagement was supported by a study, while claims that is decreases engagement are personal opinions, increases the likelihood that increased engagement is the true outcome.
- The contradiction that appears around employee engagement is not explained in any of the articles reviewed, but I might hypothesize engagement is more directly related to the quality of management. This would be a possible explanation for the apparent contradiction because well managed employees are likely to be more engaged regardless of their physical location, and this engagement could even be increased among remote workers when you consider some of the other findings related to remote work such as greater job satisfaction and company loyalty. (This also appears to be supported by Fell's claims about management quality providing a root cause for problems, not physical location of employees.)
- The blurring of lines between work time and personal time, and the increased expectations of employee availability, that has resulted from technology such as smart phones, laptops, and tablets has been widely discussed and well documented; and it appears that how this change might impact legality and labor laws warrants further exploration.
- While the articles themselves don't cite studies to provide evidence for the claim that management quality is the cause of the problems stated, I have personally read studies about how the quality of management impacts the workplace and individual employees that would appear to support this claim. The challenge here appears to be determining if telecommuting contributes directly the stated problems or if poor management can account on its own for these problems.
The Ugly: A Hidden Agenda?
Some have claimed
that the new policy is more of an attempt to cut headcount while avoiding costs
normally associated with employee layoffs. This claim appears to be purely
conjecture, as nothing I read provided any evidence to support the claim, and
it is also too soon to tell if the reaction by employees will actually result
in a significantly lower the headcount.
First, there are the
employees with current remote work arrangements (one article said there are
about 200 of these, but All Things D points out the policy also covers
employees with arrangements that allow some remote work, even if only a couple
days a week). These employees have until June this year to leave the company or
begin reporting to an office. Second, some have expressed concern that top
talent will leave the firm in reaction to the new policy, theoretically being
able to find work at more progressive companies that provide flexibility
options because they have desired and in-demand skill sets.
My thoughts on a possible hidden
agenda …
Only time will tell
how this pans out. While we may know how many of the employees with remote work
agreements stayed and how many left shortly after the June deadline provided,
how other employees react by staying or leaving the company will not be so clear
cut and will take much longer to ascertain. It appears likely that this will
live on only as a conspiracy theory given that it would be very difficult
obtain any direct evidence that this hidden agenda was part of the
decision-making criteria on which the new policy was based.
Conclusion
The claims of the
critics appear to carry more weight than those that praise Yahoo!'s decision,
simply because they have more reasons that have been shown to directly impact a
company's success (e.g., productivity gains, ability to attract and retain talent,
ability to recruit talent from a larger pool, employee satisfaction, employee
loyalty, company reputation) and there appears to be more evidence to support
the claims made by the critics (they cited more studies and data to support
their claims of the benefits that can be realized by allowing at least some
remote work options).
Additionally, I
would be interested to see more evidence around the specific claims made in
both the set of articles as well as the leaked memo describing the new Yahoo!
policy. For example, the memo itself and quotes in some the articles claim that
insights and decisions are often best reached through casual, physical
interactions. This appears to me a dubious claim that also appears to be based
more on conventional wisdom than evidence. I would very much like to see any
evidence to support such a claim.
I am certainly not
saying that zero value is derived from physical interactions and co-location, I
have personally read studies that support the importance of casual interactions
and face-to-face interactions for factors such as reinforcing the strength of
relationships, increasing the confidence that people better understand each
other in electronic communications based on a previous physical interaction,
the role of nonverbal communication (especially during more difficult
conversations), and increasing comfort levels among individuals that work on
teams; but the factors Yahoo! is claiming are directly related physical
co-location do not appear to be well supported, indeed, some claims are
directly contradicted by the evidence.
The Yahoo! Memo as released by All Things D:
Articles reviewed (alphabetical):
Bailey,
L. A reaction to Yahoo's telecommuting ban. The Bailey Group, March 4, 3013.
URL: http://www.thebaileygroup.com/a-reaction-to-yahoo%e2%80%99s-telecommuting-ban/?goback=%2Egde_1818773_member_219490455
The
future of telecommuting: Corralling the Yahoos: Technology allows millions of
people to work from home. A big tech firm is trying to stop them. The Economist
(print edition), March 2, 2013. URL: http://www.economist.com/news/business/21572804-technology-allows-millions-people-work-home-big-tech-firm-trying-stop/print
Goudreau,
J. Back to the stone age? New Yahoo CEO Marissa Meyer bans working from home.
Forbes, February 25, 2013. URL: http://www.forbes.com/sites/jennagoudreau/2013/02/25/back-to-the-stone-age-new-yahoo-ceo-marissa-mayer-bans-working-from-home/
Miller,
C. C., & Perloth, N. Yahoo says new policy is meant to raise morale. New
York Times, March 5, 2013. URL: http://www.nytimes.com/2013/03/06/technology/yahoos-in-office-policy-aims-to-bolster-morale.html?pagewanted=all&_r=0&pagewanted=print
Miller,
C. C., & Rampell, C. Yahoo orders home workers back to the office. New York
Times, February 25, 2013. URL: http://www.nytimes.com/2013/02/26/technology/yahoo-orders-home-workers-back-to-the-office.html?ref=technology&pagewanted=print
Pofeldt,
E. Can Yahoo really be doing this? Forbes, February 26, 2013. URL: http://www.forbes.com/sites/elainepofeldt/2013/02/26/can-yahoo-really-be-doing-this/
Fell,
S. S. The hypocrisy of Yahoo!'s crackdown on telecommuting. The Huffington
Post, March 6, 2013. URL: http://www.huffingtonpost.com/sara-sutton-fell/the-hypocrisy-in-yahoos_b_2766030.html?view=print&comm_ref=false
Fell,
S. S. Four reasons smart companies embrace work from home options. Working
Mother, retrieved March 6, 2013. URL: http://www.workingmother.com/content/4-reasons-smart-companies-embrace-work-home-options
Swisher,
K. “Physically together”: here’s the Internal Yahoo no-work-from-home memo for
remote workers and maybe more. All Things D, February 22, 2013. URL: http://allthingsd.com/20130222/physically-together-heres-the-internal-yahoo-no-work-from-home-memo-which-extends-beyond-remote-workers/
Wright,
A. D. Yahoo phases out telecommuting. Society for Human Resources Management
(SHRM), February 26, 2013. URL: http://www.shrm.org/hrdisciplines/technology/Articles/Pages/Yahoo-Bans-Telecommuting.aspx
Yahoo:
Meyer Culpa: Forcing workers to come into the office is a symptom of Yahoo’s
problems, not a solution to them. The Economist (print edition), March 2, 2013.
URL: http://www.economist.com/news/leaders/21572767-forcing-workers-come-office-symptom-yahoos-problems-not-solution/print
Names referenced in the articles reviewed (alphabetical):
- Amanda Augustine, job search expert for job website TheLadders
- Cindy Auten, general manager of the Mobile Work Exchange, formerly the Telework Exchange
- Christopher Carlson, a senior associate in human resources at Booz Allen Hamilton
- John A. Challenger, chief executive of outplacement and executive coaching firm Challenger Gray & Christmas, Inc.
- David Fagiano, COO of corporate training and consulting company Dale Carnegie Training
- Sara Sutton Fell, CEO and founder of service site that lists telecommuting jobs FlexJobs.com
- Ellen Galinsky, president and co-founder of nonprofit group which studies the changing work force Families and Work Institute
- Colin Gillis, an analyst at BGC Partners
- Chelsea P. Gladden, director of marketing and PR of service site that lists telecommuting jobs FlexJobs.com
- Sara Gorman, a Yahoo! spokewoman
- David Lewin, management professor at the University of California, Los Angeles
- Ken Matos, senior director of Employment Research and Practice for the Families and Work Institute
- Jackie Reses, director of human resources and the author of the new policy for Yahoo!
- Ruth Rosen, a professor emerita of women’s history at the University of California
- John Sullivan, a professor of management at San Francisco State University who runs a human resource advisory firm
