On Building Affordable Sustainable Workplaces
Laurel Farrer: So until we start talking about really showcasing those results of how companies can save between 11 and $20,000 per employee per year from converting from physical to virtual, we're not going to get any attention. So, we have to take this conversation a lot more seriously, because businesses don't understand what's in it for them.
Zach Dunn: This episode, we talk to Laurel Farrer. Laurel has spent the better part of 15 years helping people understand what remote work can look like. Now, up until the last couple years, she's probably had a little bit harder time getting folks to really appreciate that. Fortunately, her expertise now very relevant, and we have her for a full episode. Let's get into it. How did you get into this line of work? Let's start there.
Laurel Farrer: So, I come from operations management, I've been a COO for 15 years and this started as a strategic business move. I was working for a small business and we were operating and scaling with lean growth models, and so every penny counted. And we were heading into a season in which we were toggling between the choice of getting more funding and carrying us through a busy season of growth or we could cut costs. And so, I was auditing all of our expenses and the irony of it is that we were event planning company. And so, we needed this bigger office space for all of this new staff that we needed for these new big events that were coming up in the busy season, but when you're in event planning, you are never at the office, you are always on site. And so, we looked at that as an opportunity cost, and we said, "What if we didn't get the office first, we got it after the busy season?"
Laurel Farrer: And everybody just worked from home for the next few months. And spoiler alert, is that we never went back. And so that, was just incredibly eye-opening for me as an operations' manager to see our overhead costs go down, but our productivity go up, our retention and attraction go up. And so, I took that with me to every job afterward and said, "Hey, I think there's something here." I specialized in startups and small businesses that were running lean. And so, I was like, this is an incredible opportunity for us. And so, I did that for the companies that I worked with and then started consulting independently and then evolved into starting a consulting firm exclusively. And so, I started distribute as a formal consulting firm about five years ago.
Zach Dunn: I mean, up until like even three years ago, it was probably just more generically, either remote work, flexible work or some sort of mashup of other words, right?
Laurel Farrer: Hybrid existed as a term. Let's be honest, it was a really quite a [inaudible] term, meaning, the hybrid teams had given teleworking, telecommuting, remote work a very bad name. So, the big infamous case studies that you heard about of like IBM and Yahoo that had to retract their policies, those were hybrid teams, hybrid is extremely difficult to do successfully and sustainably. So, prior to the pandemic, the narrative in the remote work world was like, you can try but enter at your own risk. Like it is so much easier to do just fully on site or fully distributed. So, fast forward two years where hybrid is the normal. And so that's, I think the relationship that people don't understand between hybrid and remote is they're like, "Well, no, hybrid's not remote and remote's not hybrid." And it's like, whoa, whoa, whoa, we have to back up here.
Laurel Farrer: First of all, you're right. They're not the same. However, they are operated in the same way. In order for hybrid to become successful and sustainable and to prevent those problems that did occur in the nineties, is that we have to operate hybrid in a different way. It is not, and cannot be remote versus hybrid, which is what it is now. When you continue to focus on location, that's what it becomes. It's an us, versus them. And that's what creates discrimination and imbalance employee experience. Instead, what you have to do is operate as a fully distributed team. You have to operate completely virtual first, because that eliminates location as a factor in employee experience. So, the more that you operate as a fully distributed team, the more it doesn't matter where people are, if they're in HQ or in home office or co-working or whatever, that's what makes it more sustainable.
Zach Dunn: For somebody who maybe thinks of work from home as a perk, not as like a workplace strategy, how do you help them get up to speed on the distinction between the strategies you're describing?
Laurel Farrer: Yeah. So, what's truly new is the concept of work from anywhere and almost boundary less mobility. When that is scalable, it makes the concept of mobility and employee mobility, scalable to an entire organization, not just an individual who happens to have access to the technology that makes that possible or to even the personal lifestyle that makes that possible, but to an entire company. So, throughout this time that technology has been made more mobile. It's also our workflows, our processes, all company operations have also become more digital.
Laurel Farrer: So, regardless of if we are sitting five seats away from each other or five continents away from each other, we're sending each other a Slack message or an email. So, when we combine a digital infrastructure with mobile technology, it means that its location becomes irrelevant. So, we can be productive. Work is something that we do, not somewhere that we go, we don't have to be in a centralized location in order to access the equipment, the software, the information, the people that we need in order to be productive anymore. Like we have since the industrial revolution. So that's evolved, that's different now, and now we can be productive individually. And we, as individuals have become location independent, which then allows us at scale to become location independent as a company.
Zach Dunn: I think, it would be really easy for somebody to kind of hear the sort of, Hey, work from anywhere location doesn't matter, as being equivalent to, if you have an office that's a waste. And I think that's where I think a lot of folks seem to get stressed out in like the initial sort of visceral reaction to, "What are you talking?" People do need a place to go sometimes. So I guess, how do you think about that?
Laurel Farrer: We focus on the language of this means that we are location independent. We are not dependent on a certain location in order to be productive. However, we are still human beings. We are still always going to exist in a location. Therefore, it becomes a different conversation of not do we have to be in a certain place at a certain time in order to be productive, but how can we leverage certain places and certain times in order to optimize our productivity. So, instead of we being controlled by the location, we are then turning the tables and using location to our advantage. So, workplace flexibility becomes a greater concept of, okay, what types of tasks should we do in certain places in order to enhance their results? If we have choice instead of control, how can we use that to our advantage? So, then it becomes a conversation of when do we go into the office? When do we work independently? When do we go to the client's office? When do I go to a co-working space? How can I leverage different work environments to create different outcomes and results?
Zach Dunn: We would describe it kind of like, every company has one workplace. The office is an important part of that story, but it's not the only part of that story. And your job as the organization is to make sure that your workplace has a bunch of options and flexibility for people to choose where to put their work. And that might be a different answer every day. Is that kind of how you think about it too?
Laurel Farrer: Yeah, we've just been conditioned for so many generations to share time and location with our coworkers. And so, we default to that. That has ingrained into us from our very first job is that we go to a certain place at a certain time in order to collaborate with our peers. So, when we are transferring to a virtual environment and all of a sudden we're not sharing time and location, there is that sense of panic. Like, "Oh my gosh, how are we going to build culture? How are we going to align our objectives?" Like how do we share our results and stay connected and aligned without sharing time and location.
Laurel Farrer: And that's where you have to think about, well, if time and location were the only things that you guys were sharing in the office, were you truly aligned or were you just in proximity to each other? So, when we think about it on a bigger scale, we just think about what can you share outside of time and location that truly facilitates meaningful, sustainable connection as a group. So that's, sharing emotions, sharing goals, sharing information, sharing activities and experiences. Those are what is going to bring your team together, sharing information about yourselves, being more transparent, more frequent in your communication. That's really, what's going to build that solid foundation, regardless of where it happens.
Zach Dunn: When we were talking prior to this recording, you used a term that I really loved, and that was proximity based supervision and sort of how that as a strategy has maybe evolved or changed recently. I would love for you to talk a little bit about that.
Laurel Farrer: So, proximity based supervision is where we leveraged the environment of being together in the same place at the same time, in order to watch work happening. This is literally how it happened in the very first factories in the industrial revolution. And in derivative of the same version, we have the same thing now, that this is why cubicle walls are the height that they are. This is why we have concepts like drive by so that managers can stand up and with their senses observe work happening. However, because of that invisibility of the work for knowledge based workers, the alignment and the success or I should say the efficacy of supervision based on sensory input is not as effective as it used to be, because we all know that you can look very busy sitting at a computer and be getting absolutely no work done whatsoever.
Laurel Farrer: You might be getting a lot of Amazon shopping done, but maybe not so much work done. So, this has been a problem that we've needed to fix for a while, just because of the incompatibility of digital processes and physical supervision, not obviously not being aligned. So, it just makes more sense to be monitoring virtual work in a virtual environment. And we have productivity measurement systems that allow us to do that more effectively again, regardless of location.
Zach Dunn: Well, how should companies think about that supervising work in the hybrid world?
Laurel Farrer: On the culture side, we're hearing a movement towards leadership, air quote leadership instead of management, which is more based on emotional intelligence, support, empathy, encouragement, motivation, as opposed to management, which is control and supervision. If I hire a company to clean my car, do I need to watch them clean my car in order to know that they cleaned my car? Not necessarily, I will just pick it up at five o'clock and I'll open the door and I'll see a clean car. I don't necessarily need to know if they washed it in the parking lot or in the garage, or if they use the pink shampoo or the blue shampoo. I just trust them to do the job that I hired them to do. And so, the concepts are the same for virtual work as well. When we hire correctly, we're more invested in our processes and in empowering the people to do the jobs that we are hiring them to do. And we are there to support and motivate and encourage and equip and enable as much as we can. Then there is not as much need for supervision through the process.
Zach Dunn: Yeah, I wouldn't want to watch my car being cleaned either.
Laurel Farrer: Oh, mine's not.
Zach Dunn: Mine's immaculate. Why do you think so many companies are still talking about the need to supervise or how do we allow people to continue working from home as though it's this sort of management supervision thing stuff?
Laurel Farrer: I mean, habit, tradition, fear of the unknown, this is change in its purest form of this is something that we have been doing for my entire career. It's been something we've done for generations of careers.
Zach Dunn: Well, it's a big change and hopefully it gets big results if they do it right.
Laurel Farrer: Exactly. And they will and that's what the narrative that we need more of. I mean, this has been a problem in the remote work community for so many years of people are talking about, "Well, what are my benefits?" "This is fun. I got to work from the beach. I get to wear sweatpants." I mean, those are entertaining and click worthy conversations of course, but until we really drive the narrative about the organizational benefits, the economic benefits of remote work, we're not going to see scalable change, because businesses don't understand what's in it for them. So, until we start talking about and really showcasing those results of how companies can save between 11 and $20,000 per employee, per year from converting from physical to virtual, we're not going to get any attention. So, we have to take this conversation a lot more seriously and stop talking about personal benefits and start talking more about professional benefits. There's incredible agility and resiliency and talent attraction and retention that comes from this, but we're not going to have those conversations until we stop thinking so frivolously.
Zach Dunn: I strongly suspect that three to five years from now, it'll be very rare to hear somebody say I got a new job, so I'm moving.
Laurel Farrer: I mean, just think about the expenses of the organization of recruiting, hiring, interviewing. Okay, you're flying somebody back and forth to the office to interview them. And then you're paying for all of their relocation expenses. I mean, when all is said and done, by the time they sign a contract and they start on their first day in the office, you're looking at even for small businesses, 10, 20, $30,000 per employee for that to happen. Whereas, virtually including overhead costs, maybe $500, like that alone as an organizational savings is like, what are we talking about guys? Why is there resistance here? Come on, we can do this.
Zach Dunn: One of the things we've observed is that when people say work from anywhere, at least some of these folks who are kind of moving from that allowing work from home to work from anywhere, there's like this other thing that's happening. And that's like, okay, we work from anywhere, but you employee have to tell us what anywhere you're working at as though it's like just a single channel choice. Like, oh, I'm working from home and that's just how I'm going to work. Versus like, that's a fluid thing that may change on a daily basis. And I guess, how dynamic do you think that sort of work from anywhere environment looks for the average employee? Are they like fixed to a certain location?
Laurel Farrer: Yeah. More or less, so on a daily level, more or less people are staying very local and regional. So, they're either in our home office or they're at a local co-working space, maybe commuting to the HQ office. And so, more or less that's staying within the same region, county, city, maximum state. The reason that the company is asking is for taxation. And so, it's at that level, the macro level that we have to understand that the world is not built for remote work. At this point in time, laws do not exist at all for remote work in the United States.
Laurel Farrer: Only some are just now starting to emerge in the EU and the UAE, like just barely. So, all of the legislative infrastructures that we have that control money, that control laws, that control employment regulations, none of those include employment flexibility or workplace flexibility at all. So, we have to work as organizations, we have to work within the constraints that we have, which are, we have to pay taxes for every single state in which work is produced. And so, if somebody is changing states on a daily or weekly basis or countries on a daily or weekly basis that is highly illegal and extremely expensive. So that's, why organizations have to ask [inaudible]
Zach Dunn: And they should be put to jail immediately, right?
Laurel Farrer: Yeah. [inaudible], I mean, if like it's happened. So that's, where we need to work as an ecosystem in order to update for remote work. The ecosystem being, employees and workers and employers and organizations, as well as vendors and products, as well as governments. We all have to work together to make sure that we are aligned and moving towards the same future of work.
Zach Dunn: At the very beginning of the pandemic, I remember we would hire remote people like at Robin fairly frequently. It was like, let's say 10 to 20% of our overall workforce at the time. And gosh, even that it was kind of like there were two to three states that we had actually registered in. So, we basically could hire in those. And I remember the longer the pandemic went on, the less we asked the question, "Hey, what state are they in? Are we going to be able to hire them?" And more just the assumption became, "If we aren't registered there, we're going to need to do it eventually. So let's just go ahead and do that." Like, we shouldn't let that get in the way getting [inaudible]
Laurel Farrer: And on the state national level, that's pretty easy. Its digital nomadism throws a wrench into that, because visa laws and taxation structures Nexus is behind right now. And so, as that catches up in the future, it'll be easier. And for professionals to be more mobile, but as of right now, it's most manageable on a national basis. And so that's, why when you read job descriptions about companies being like work from anywhere, truly anywhere, it's like, well, they're either operating illegally or that is going to change within a few months, or they're going to go bankrupt, because they're paying taxes in every single country. So, it's totally smoke and mirrors if somebody reads a job description that says it's truly 100% work from anywhere.
Zach Dunn: It seems like the changes on the horizon here and that's not necessarily like a reason for organizations to wait and see.
Laurel Farrer: What companies should be doing at the end of the day is identifying opportunity zones. And this is what we call geo targeting. And so, you identify which places you are and are not willing to hire from that are strategic advantages for your company, whether in terms of talent or industry or market or do you actually put thought and intention and strategy behind where are you hiring from? Instead of it being an employee dictated change, that's like, I'm moving to Spain and they're like, "Well, I guess we're opening Spain now." It's like, no, no, be proactive, you get ahead of the conversation, identify which locations are going to be advantageous to the company. And then you set those parameters instead of your people.
Zach Dunn: What impact, if any, do you see in the US, there's these pay transparency laws emerging now by states where they have to actually present on job listings, what the pay bans are. And I think that parallel to that's also surfaced it seems, among a lot of our customers at least. Hey, does it make sense to have regional based compensation? That is to say. It seems like that could be an interesting catalyst to further support kind of like this broader scope thinking.
Laurel Farrer: Okay. So, the conversation was with remote was so, so, so small prior to the pandemic. So, it was concerns like this, that we were still trying to figure out and we were still prototyping, like, what is right? What is wrong? What it's evolved into at this point, it is still not a finalized solution, but there are different advantages, well pros and cons for both. Depending on your industry, depending on your workforce size, depending on your country, there's pros and cons for both. So, the rules of thumb at this point are, if you are going to do location independent salaries, and you're going to offer that to everybody, that's fine, but you need to be very cautious about the economic impacts of that in the countries that you do have an employer of record in.
Laurel Farrer: On the other hand, if you do choose to do location based salary bans, it is best to do location based salary bans, meaning you only have a few levels, two or three or four levels of pay scales. So, there is flexibility within them. You're not minutely changing cost of living and calculating that according to city or county. And then if you do that, then you do need to also consider location independence benefits for those people and just make sure that everybody is getting as equal of compensation as possible. So, either way needs to be very mindful, very intentional, very strategic, and be very, very cautious of both the internal workforce impacts as well as the economic impacts. But there are pros and cons to both,
Zach Dunn: Hey, as you look forward to the next year or two, what has you most excited?
Laurel Farrer: I think, everybody expects my answer to be remote working. And it's not, I wrote another Forbes article just last year when everybody was talking about the pandemic and the title was The Future Of Work Is Not Remote It's Better. And that's because I believe that workplace flexibility is a catalyst. It is a bridge to take us to better ways of working fundamentally. So, it's opening our eyes to, like I said, that work is something that we do not somewhere that we go. So, what we're seeing is just a shift away from organizational power to individual autonomy.
Laurel Farrer: And so, I think that the next step after the workplace flexibility conversation has come and gone, is how do we strengthen and optimize and leverage that individual autonomy, that individual creativity, how do we leverage human capital on more of a micro basis? So, I'm excited about the ways of working that we are now prioritizing like asynchronous communication, digital tools. I like that we're focusing more on emotional intelligence and those will all build the foundation for this future conversation in which essentially the entire business world is less systematized and the individuals hold more power in their careers and in their results.
Zach Dunn: Links to all of the things Laurel mentioned in today's episode will be available in the show notes per usual. And if you want to learn more about what I'm doing, visit robinpower.com. I'm Zach Dunn, see you on the next episode of, In The Works.
