Remote Work A Temporary ‘bug’ Becomes A . - Deloitte US
Remote workA temporary ‘bug’ becomesa permanent ‘feature’
Summary The COVID -19 pandemic has forced many organisations to adoptremote working arrangements as an emergency measure tocontinue operating. However, many organisations may look to make remote workingarrangements a permanent option given the potential cost,productivity and talent attraction benefits. While the potential for remote work varies across geographies,sectors and occupations, we estimate a potential 50 million jobscould switch to remote work across the ASEAN-6 countries. An abrupt transition to working from home has not been ideal.Homes might lack a “fit-for-purpose” space, necessary technologyinfrastructure, security, and privacy required for productive work.In addition, most leaders and managers also lack the necessarypractices to manage high performing, virtual teams. However, even with sub-par spaces, novice remote workingpractices, many firms have demonstrated their resiliencein shifting work to remote, and in some cases even shownproductivity gains in doing so. As the world recovers from the pandemic the ‘new normal’ for theworkplace will reset. Many, will choose, or be required, to workremotely. Conditions for working from home, and practices forworking remotely will improve. Furthermore, as remote work becomes more prevalent newworkplace solutions, like “Work Near Home” suburban sharedworkspaces will emerge that match work environment needs withshorter commutes. Organisations and policy makers who lead this transition will havean opportunity to shape the future of how and where we work,and create and capture value from it.02
Remote work A temporary ‘bug’ becomes a permanent ‘feature’COVID-19’s lasting impact on theworkforce: A move to remoteWith the possible exception of the World Wars, few events havehad such a rapid and radical impact on the global workforce as theCOVID-19 global pandemic in 2020. Governments globally haveclosed borders, implemented lockdown measures restricting all butessential service workers to their homes. The International LabourOrganisation has estimated that 2.7 billion2 or more than 4out of 5 workers in the world have been affected, challengingorganisations to embrace work from home arrangements.1Even before government intervention, a significant proportion of theworkforce chose to socially distance themselves, where possible,due to fear of infection. The same fear has also lead to a shift inconsumer expectations, preferring to access goods and servicesonline, further reducing the demand for face-to-face engagement.In ASEAN countries, share of online spend for consumer goods havejumped by 5 percentage points during the COVID period with 76%of Singapore consumers expecting to maintain their online shoppinghabits post COVID3.In this paper we use ‘remote’ and ‘virtual’ working interchangeably. They both denote working remotely in virtual teams.03
Remote work A temporary ‘bug’ becomes a permanent ‘feature’Fortunately, the ability for us to shift to remote workingarrangements and still remain connected and productive, is nowbetter than it has ever been. Internet connectivity is pervasive andreliable across the region. Applications for video chat and onlinecollaboration have enabled us to continue to work, learn and stayconnected with our friends and family, whilst being socially distant.The cloud-based video conferencing tool, Zoom, went from 10million daily meeting participants in December 2019, to over 300million in April 20204. Microsoft Teams, a chat-based collaborationtool, had 70% growth in active daily users across the single month ofApril5. These enabling tools are transforming the way we work andallowing businesses to perform provided leaders and their teamsare able to adapt.Remote working arrangements have been thrust upon usby global events. However a few progressive companies areseizing this opportunity to make it permanent. Tech giants suchas Facebook and Google have publicly announced that they willcontinue with working from home arrangements until the end ofthe year6 at a minimum, and it is widely expected that flexibility willcontinue beyond. Twitter has cancelled all in-person events forthe remainder of 2020, and has announced that employees cancontinue to work from home in perpetuity7.Whilst this might be expected of digital-natives, other earlyadopters are stepping up as well. Tata Consultancy Services(TCS) headquartered in India, is preparing to have75% of its workforce working from home by 20258. Thetelecommunications giant, Optus, will continue to have theirAustralian based call-centre staff work from home on apermanent basis9.The decision to embrace remote working arrangements on apermanent basis makes sense from financial and productivityperspectives. Significant cost savings from reduced realestate, travel and infrastructure costs explain why 74%of CFOs expect flexible work arrangements to continue insome form10. There is also the potential from productivity gains,especially in high density, urban areas due to reduced commutetimes. A recent survey of workers across Australia found that overhalf were using the time previously spent on commutes to work, and70% of those surveyed felt they were either as productive, or moreproductive working from home as in the office11. It is a messagethat senior leaders are listening to, with the Chief OperatingOfficer of TCS, NG Subramaniam recently quoted as saying “[w]e don’t believe that we need more than 25% of our workforce atour facilities in order to be 100% productive”. Furthermore, remoteworking arrangements make it easier to rapidly flex workforce size,composition and cost by leveraging the gig workforce and crossborder teams.04From a talent attraction and retention perspective, remote workingarrangements have long been clear draws for the tech savvymillennials and Gen Z. These generational cohorts appreciated theflexibility and autonomy provided by remote work, and it is likely thatsome of the older generations will quickly adapt to appreciate thesecharacteristics as well. Moreover, organisations with flexible workingarrangements have three times more female leaders, indicatingaccess to a larger pool of talent12.Across multiple drivers, there is clear evidence that remoteworking arrangements can make sound commercial sense,and what started as a temporary bug, is therefore shaping upto be a permanent feature.
Remote work A temporary ‘bug’ becomes a permanent ‘feature’50 million people could transition toremote work in ASEANBased on analysis conducted by Deloitte, up to 47.8 million peoplein the ASEAN-6 nations (Indonesia, Malaysia, Singapore,Philippines, Thailand, and Vietnam) could shift to workingremotely over a multi-year time horizon. This is based onassumptions around the kinds of occupations where remote workis feasible, the proportion of the workforce in these occupations,and the likely timeframe needed to provide the appropriateinfrastructure and environment to make the transition.Singapore and Malaysia will lead the region with a potential remoteworkforce of up to 45% and 26% respectively due to the relativedominance of service industries. The business case for Thailand,Indonesia, Philippines and Vietnam is also fairly strong, given themassive productivity losses related to urban commute time.In comparison, around 200 million people or 25.5% of the Chineseworkforce were working remotely by the end of the Chinese NewYear holiday13.Seen side by side with the China perspective, our estimates forASEAN appear fairly conservative. We believe that ASEAN will getthere but only if we are able to transition infrastructure, skills andpolicy simultaneously, over the next 2 years. The advantages of thistectonic shift in the way we work in ASEAN will come with significantvalue and benefit, for employees, employers and governments.While remote work isn’t without its drawbacks, broadly this shiftwill allow employees more time with family, less commuteand travel, and more flexibility to balance work and life.Working in remote formats will also allow for greater autonomy andtime to invest in learning new skills. Employers will gain advantagesin cost, productivity and flexibility/agility. Eventually, as remoteworking becomes the norm for some employers, the geographicallimitations of talent will disappear, allowing employers to accesstalent in international locations without the burden of mobility costsand complications. Governments will benefit from less traffic on theroads, revitalisation of suburban economies and ecosystems, and arapid transition of digital production and consumption.Potential workforce transition to remote working arrangements across ASEAN-6 Absolute number (millions)Porportion of current workforce (percentage)05
Remote work A temporary ‘bug’ becomes a permanent ‘feature’Services first – the sectoral outlookfor remote workDue to the nature of the jobs to be done, the tertiary (services)industry will have the more significant shift to remote workingarrangements. There are variations across the landscape but weexpect that anywhere between a fourth (25%) to two thirds (67%) ofthe workforce will move to permanent remote arrangements in themedium term.This is significant for several sectors. Professional services,technology and telecommunications industries demonstratethe greatest upside - there is virtually no ceiling for theseindustries with the potential to transition 90% of theworkforce to remote working. The constraint considerations arelimited to the need to drive collaboration, interact face-to-face withclients (and build relationships) and other human preferences. Evenwith these considerations, we expect around 67% of the workforceto transition with the next 2 years. The productivity gains, speed ofexecution, flexibility of talent models etc. are overwhelming positivesfor these sectors to prioritise on premise work over remote for too long.Financial services, government agencies and real estate sectorsmake up the next group. With government services, this might takea while as mindsets shift slowly in most bureaucracies. However,in financial services and real estate, the margin pressures,move to digital, changing customer preferences and thepresence of younger, tech savvy workforce will likelyaccelerate the transition over coming quarters.What is interesting is that even with the constraints of a largeproportion of staff in field operations (and, by definition, mostlyonsite), there is still a significant proportion of support, managementand control roles that can make the transition, improving the overallcost structures of these sectors.Potential workforce transition to remote working arrangementsacross the services sectorsProfessionalservicesTechnology &TelecommunicationsGovernment &Public AdministrationFinancialservicesReal EstateservicesWholesale &Retail tradeAdmin &Support servicesHealthcare &Social servicesHospitality& FoodTransportation& Logistic67%55%51%33%66%54%33%30%Some banks in India are working actively to move up to 95% of theirsales workforce to work remotely as they realise that customersare going to be hesitant about face-to-face contact even after thelockdowns are removed. This will change the role and number ofbranches and accelerate the move to digital customer acquisitionand experience platforms. Front line workforce transitions will varyfrom sector to sector based on customer preferences. This will alsodepend on country culture and the need for face to face interactionsto engage and service customers.This analysis does not mean that other sectors like manufacturing,utilities, agriculture, mining etc. will not be impacted. We have simplyprofiled the analysis here for the top 10 sectors of impact.Other services like administration and support, wholesale and retailtrade, healthcare, hospitality and transportation / logistics showmore modest potential for remote transitions (between a fourthand a third of the workforce). Most of the roles that will transition inthese sectors are support / enablement roles like finance, HR, legal,marketing and technology.In the manufacturing sector, the occupation analysissuggests that a significant proportion of support,management and enablement roles can (and will) move toremote formats. This will reduce the cost burden on these sectorsfor expensive real estate for headquarters employees, most ofwhom can work in remote format.0628%24%
Remote work A temporary ‘bug’ becomes a permanent ‘feature’Some occupations will move fasterthan othersIn a recent study from Slack, the online collaboration platform, a vastmajority of users in different functions and occupations signaledtheir willingness and ability to work remotely. Only 11% of 2877workers surveyed in this report felt that their work cannotbe done remotely14.Having said that, we must accept that certain occupations aremore suited to remote working arrangements than others.Back office support and enablement functions such asHR, Administration, Legal, IT and Security will make thelargest wholesale transition to remote working. Customerfacing occupations are likely to adjust slower as they adjust to newcustomer interaction expectations and technology requirements.Hybrid occupations, to be completed in specific locations, orrequiring specialised equipment such as field operations, will see theleast movement to remote working arrangements.Senior leaders have the highest potential to shift fully offsite,however they are facing barriers in terms of the skills andmindsets necessary to lead highly effective virtual teams.Companies such as Gitlab15 operate with a completely virtual C-Suitewithout compromising the effectiveness and speed of decision making.These early movers will provide the inspiration for a majority ofsenior executives to consider working (at least partially) in remoteformat. The advantage of this format, especially for senior executivesis the ability to focus on critical decisions, less distractions and amore informal/relaxed way of interacting - impossible in a hyperformal board room environment.An Indonesian CFO mentioned in one of our conversations recently“working from home has had a significant impact on our (seniorexecutive team) productivity. For one, everybody is on time for themeetings, there is no time wasted in idle gossip at the beginning ofmeetings and, most importantly, everything we decide is recorded,driving more accountability from everyone”.Moving senior executives to remote formats is critical inaccelerating this transition. In our hierarchical social construct inASEAN countries, the actions of senior leaders are quickly adoptedby others.Potential workforce transition to remote working arrangements across occupationsBusiness management& Consulting76%IT & Security,Software Engineering75%HR, Legal, Risk,Compliance, Admin55%Accounting& Finance72%Sales & Relationshipmanagement40%Innovation, Design &Developement, Digital66%Customer support &Opperations38%Marketing, Media &Communications65%Field operations10%07
Remote work A temporary ‘bug’ becomes a permanent ‘feature’Remote working is not the same asWork-From-HomeWhilst COVID-19 has accelerated the pace of the transition toremote working, working from home (WFH) has its challenges. Weexpect that over the next 6 months companies are going to reviewtheir work from home arrangements and look for alternatives to thisform factor.The greatest challenge has been around work environment. Withsmall urban living spaces, kids running around the house, and thenoise and discomfort of tight residential environments, it has beendifficult for employees to adjust to the new normal. Insufficientspace for a suitable home office has left many working from diningtables in communal spaces, impacting confidentiality, data privacy,ability to focus, and overall productivity.As workers try to work from home with sub-optimal spaceand environment, they are also recognising that rather thanhelp with work life balance, work from home is becoming anall-consuming reality that starts early and does not end untillate in the evening. We are no longer sure of when work endsand life begins. The absence of face to face engagement with peerscan also be isolating for some, potentially leading to mental healthand wellbeing implications.The personal costs associated with the physical set-up includingfurniture, monitors, headsets, and high-speed internet aresignificant. During the COVID-19 crisis, many companies have beenproviding stipends of up to 1000 USD per employee to cover theseadditional expenditures16. Even with the financial support to set upappropriate home work spaces, it can be challenging for employeesto access appropriate support if their equipment malfunctions ortheir high speed connectivity breaks down. The cost and disruptiveeffects of these infrastructure challenges can prove to be showstoppers for wide spread adoption of work from home.08Then there is the cybersecurity challenge. According to the Interpolthreat actors are exploiting vulnerabilities of systems, networks,and applications used by businesses, governments and schoolsto support staff who are now working remotely17. Business EmailCompromise (BEC) has become the scheme of choice, involving thespoofing of supplier and client email addresses – or use of nearlyidentical email addresses – to conduct attacks. This requires carefulconsideration as companies look to transition effectively to remoteworking. Providing the right safeguards and effective trainingfor staff in areas of cyber-security is critical to ensurethat the gains of remote are not lost to catastrophic cyberfailures.Working remotely also requires a new language, skillset and toolsetfor managers and employees. Many managers, used to having dailyface-time with their teams, are not yet skilled in how to achieve thetrust and ways of working required for highly effective virtual teams.The way we are working has changed dramatically, and the way welead needs to catch-up if we are to be truly effective. New ways ofsetting goals, creating alignment, assigning work, monitoringprogress, providing feedback and coaching, and resolvingconflict, among others, need to be understood and adoptedacross all levels of management. This is a substantial transitionfor more traditional work-from-office cultures, but one that they willhave to address sooner rather than later to stay competitive withdigital-first companies.For all the reasons above Work-From-Home may not be the eventualform factor that creates a sustainable move to remote working.While the advantages of the transition are many, these are significantchallenges that also need to be addressed for this shift to happen.
Remote work A temporary ‘bug’ becomes a permanent ‘feature’Work Near Home – an emergent‘new normal’The ‘new normal’ that emerges from the global pandemic willchange how we work, and where we work. With Work-From-Homechallenges and a full-scale return to congested Central BusinessDistrict (CBD) offices unlikely, a “best of both worlds” solution isemerging: Work-Near-Home (WNH). These communal / sharedsuburban worksites, located in the suburbs, close to where peoplelive, provide the functional requirements for the remote workforceof large employers and small employers alike. They will be morefunctional and less premium than branded CBD centric co-workingspaces, while providing the benefits of safety, security, connectivityand comfort of an office.These spaces will radically change the way largeorganisations plan and deploy space for their workforce,creating a third option for workers between office and home.Shared workspaces are not new; firms such as WeWork havegrown very rapidly in the recent past, but they were largely locatedin CBDs and provided high-end office facilities targeted at smallbusinesses and start-ups. They do not serve as effective solutionsfor a workforce that want to maintain the advan
emote work A temporary ‘bug’ becomes a permanent ‘feature’ 50 million people could transition to remote work in ASEAN Based on analysis conducted by Deloitte, up to 47.8 million people in the ASEAN-6 nations (Indonesia, Malaysia, Singapore, Philippines, Thailand, and Vietnam) could shift to working remotely over a multi-year time horizon.
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