2022 - The year of breakthrough of hybrid and remote work. The massive impact this will bring

(Neither ChatGPT, nor any other AI was used to write this article. Photos by me. But the illustrations were created by Midjourney AI. You can find the Midjourney command in Italic at the footer of each illustration.)

 In this post I will cover two topics. Firstly, the hybrid and remote work practices and its challenges. Secondly, some thoughts on the huge impact the hybrid/remote work will bring about small-townization.

Part 1 - Where we are with hybrid and remote work?

A few weeks ago there was a fire drill in the office building of Solita Tallinn. The alarm went on and everybody in the building (the one on the photo) had to evacuate to the street. While waiting on the street for the drill to end we did a small calculation. We calculated that there should be about 800-1000 workplaces in the whole building. However, the "evacuated" crowd was only 150-200 persons strong. So roughly 10-30% of the workplaces in our office building are used. This matches the numbers we are seeing in different offices in Solita.

One reason for this excess space is that office rental agreements are signed for very long periods - 5 years is quite usual. Add to that the hassle with furniture, reparations, moving and you see that there is a big time-lag in adjusting the office space for the needs of a company. As "the new normal" - that is massive hybrid and remote-working - was settled somewhere in Summer 2022 then organizations have not yet been able to adjust their office space to match it.

The sight of empty workstations is quite usual in most of the offices now:

The trend

Since Summer, when the restrictions ended, many team-leads and companies have encouraged people to return to offices. Smart organizations are doing it through positive - arranging events, workshops, joint breakfasts. These activities are important and have an effect, but it seems that the force of "the hassle of coming to the office" is so strong that the number of days at the office is at best stable, but rather it is slowly declining even further.

The three breaking points in becoming remote first

It is amazing how fast people adjust to situations and how fast we forget how it used to be. Do you remember that in the end of 2019 more than 80%, or in some organizations more than 95% of meetings were physical on-site only meetings? Microsoft had tools like Lync and Skype for Business, which had annoying quality issues. People did not have headsets, cameras, Airpods etc to make videomeetings. A hybrid-worker was a bit of a problem and a full-remote mode working required serious considerations.  People physically present on the meeting definitely had an advantage over those, who were over video. But it has all changed in 3 years. I would point out three breaking points in this process to illustrate how hard it would be to go back:

The first - Making remote work (technically) possible.

(Midjourney: videomeeting, online meeting, home, person with headset, film scene, 4k hd --v4)

This is something we all had to do in February 2020.

From a personal perspective this meant setting up a workspace at home. Headsets, a monitor, room, chair etc. From the team perspective it meant video meeting tools, adding a video meeting link to each meeting. Do you remember that it was only recently when MS changed the default meeting to be a Teams meeting in Outlook. Previously you had to add a link manually to the invitation.

This meant also changes in the ways of working. More asynchronous chat and less face-to-face discussions. The teams started to treat equally the people on site and the ones participating remotely.

The second - Making on-site work (a bit) problematic

(Midjourney: walking a dog, daytime, photography, 4k hd --v4)

The examples of this breakthrough are things like taking a dog, moving to a place further away from the office, buying a cottage outside the city, selling your car, arranging children daycare or school so that you have to be there for them during daytime. From the team perspective it meant mobile workplaces  and having less workspace than team-members. Maybe also turning some workplaces into meeting- and call-rooms. Many of these decisions were done during the pandemic and maybe without considering the consequences. So here we are - the dogs, cottages and children have to be taken care of now.

It would be possible to re-arrange things, like buy a car, find another school for the child or sell the cottage so that you could in theory work again from the office from nine to five, but it would be costly and an effort. The company on the other hand would have to arrange workplaces for everybody, maybe even parking space - and this would be in some cases impossible without moving.

The third: Moving and thus making it impossible to work from the office every day

(Midjourney: men moving furniture, moving truck, city street, sunshine, 4k hd)

This is the "point of no return". A point where it would be easier to switch jobs than to return to 9-17 office work. There are many versions of it but here are the obvious ones:

• Team member moves far away from the office. To a different town for example.
• The company gives up the office or substitutes it with a much smaller space dedicated to meetings and interaction and not working behind the desk

Different teams and different team-members are in different phases of remote work. But the direction is clear - slow and steady increase in remote work with an occasional step over one of the breaking points.

Remote work has problems that we have to solve

So here we are. 70-90% of workdays are done remotely and there is no way we will go back to that being 10-20%. Probably the trend will continue and there will be more and more persons and organizations stepping over the third breaking point. This has created a number of problems for which we kind of have solutions, but not perfect ones yet.

These are hard problems where the solution is not a tool or a process, but it is in the changes of everybody's behaviour and how we do things. The solution cannot be achieved by only the team-leads doing something, everybody in the team has to change how we work and interact. Therefore, it is hard and takes time. It is like 11 people training to become a good football team and it cannot be done by just learning a theory, watching the World Cup or the coach doing something.

Two ideas before listing the problems:

• Just taking the off-line practices and moving them online helps, but does not fully solve the problems. Some things like "water-cooler chit-chat" or "office parties" just cannot be done online.
• It makes sense to go really deep in analysis, by e.g. using the five Why? method, find the real source of the problem and then try to find a way of working to address that. It might be something completely different than we would do in the face-to-face office work.
• The whole team has to train the new way of working, not just some members or the coach or  the captain.

Cabin fever

(Midjourney: lonely house, lonely person, photo quality, depression 4k hd)

We have had quite a surge in depression, stress and other mental problems during and after the pandemic. There are many reasons like Russia's war, inflation, disease and pandemic, but working and being at home without your team-mates is definitely one of them.

In the office you can do things like ask "How was your weekend?" or go together to a lunch and discuss the plans for the New Year. These small interactions are essential to our mental-wellbeing, but they don't happen automatically when we work remotely.

From the team-lead side the situation is even worse. Your whole remote team could be in depression, drinking every day, working 12h a day or working 0h a day and it could take you weeks of reading secondary signs to discover that something is wrong. Compare that to the immediate overview you get when you actually see people.

Involving, introducing and mentoring new team-members

(Midjourney: film scene, old person teaching a young person, office, 4k hd)

When I was a junior monitoring systems developer and I had a question, I would walk to our senior UNIX sysadm Ivan and look, if he was busy and if I would dare to ask him to explain something to me. It was especially easy when I heard that the seniors were e.g. discussing some non-work stuff and I could be sure that I would not interfere them. How do you do it now remotely? Over chat?

Vice versa, how do the seniors or team-leads notice, if the new team-member is struggling with something? It used to happen by just casually asking or looking at their face or what they are doing. How do you do it now, in a remote working setting?

Lack of information

(Midjourney: I don't know things, person shrugging, photography, 4k hd)

The small bits of information we get at the coffee machine, lunch together or just chatting might not seem important when it comes to the immediate task at hand, but usually there is a chance that they will be useful later. Maybe you hear that somebody has solved a problem that your next task will present  toyou. Working remotely, this does not happen itself.

An important bit of information is even just seeing your team-leads and team members. That they are still there, that they are not planning something horrendous that might influence your work.

Rumours

(Midjourney: people spreading rumours, photography, 4k hd)

To compensate for the lack of information people try to get the picture on whatever small pieces of information they have. The bits we don't have - we add by imagination. You all know the Telephone game, but take that to the modern world of chat and you will be amazed how the real thing gets distorted, mixed up and changed when the third person gets the info over chat.

Team feeling, culture, relationships

(Midjourney: teamwork, trust, team cheering, 4k hd, film scene)

Perhaps as a sum of all the previous problems or maybe as a separate topic - the team feeling, personal relations and the overall good culture of remote teams is an issue. When people see and talk and meet, it almost like just happens. Emotions, interaction, trust, friendship. In a hybrid or remote work environment it does not happen automatically.

The Solutions

This is definitely not the full list of problems, there are more, but the problems are solvable. It is just that every person and every team must recognize these and solve them for themselves. I am pretty sure that in 3 years most of these problems will sound like setting up a video-meeting. Now we even don't know that starting a video-meeting is a problem, but 3 years ago it sure was! Remember, you had to plan a 15min buffer for starting a video-meeting when you had external parties and even then the meeting sometimes failed.

Maybe one place to look for solutions are online gaming teams. Small teams working together, with the same problems and having the videocall open all the time. This would lower the barrier of exchanging quick advice and small bits of information and build some level of team-feeling.

Part 2 - What the hybrid and remote working will bring with it

So now, at the beginning of 2023, we have solved all the technical challenges of remote working. As humans we will learn, we will adjust and we will solve the team-working problems in the coming months and years. So what will this mean for our society and economy? The change this brings is much bigger than most of us think and we have already seen the first signs of it in our work in Solita.

Let's assume that all the office work can be done from anywhere and try to analyse what will the world look like.

Let's start with the extreme and then filter and limit it with reality. The extreme version would be that all the office workers would become digital nomads, travelling and working from wherever, whenever. The office would be just a small cafe type of meeting place.

(Midjourney: a digital nomad, working from a beach, palmtree, 4k hd)

Working as a digital nomad can be an interesting idea, but it will be quite niche, because of the following:

First - the practical limits:

• Timezone. You still have to have meetings and having them at night is not fun.
• Travelling is expensive. Especially with family and with the need to setup a decent workplace. A good monitor does not fit into hand luggage.
• Hobbies, schools, daycare, family, healthcare. This is not that much of a problem if you are alone and 25. But take a spouse, three kids and move them to another country? It is a very costly full-time project for at least 6 months.
• Last, but not least. It is usually a little bit illegal. Or arranging nomad work to be by the book is very expensive for the company and the person. Let's say a Brazilian specialist wants to work 2 months from Estonia for his Brazilian employer. Firstly, working is illegal with a tourist visa. Getting a work permit and working visa on the other hand is in a totally different bureaucracy category than using the tourist visa. In this case the company would have to found a legal entity in Estonia and then apply for short-term work permit for the specialist. There are other issues: Will the company pay social- and income tax to Estonia? How about meeting the legal requirements of work-place safety, work conditions, vacation calculation, retirement fund. Are there requirements for salary levels set by trade unions? There are companies who provide this possibility as a service, but it still has a price tag to it.

Second - Working language

(Midjourney: people talking in different languages, 4k hd)

Not all work is done in English. No. Indeed many multi-nationals, startups and growth companies work in English, but this still is a small minority outside the English speaking countries. The situation is changing and eventually English will be the main language at workplace, but it will take years if not decades. Currently, definitely over 80% of work in non-english speaking countries is non-english.

Third - Building trust

(Midjourney: trustworthy accountant, woman in her 30s, busy, working, photo quality, 4k hd)

Building trust between people and companies is as time consuming as it has always been. It can be done remotely but it takes its time nevertheless. This means that if you are looking for somebody to do a task then your ex-colleagues, friends and friends of friends do have an advantage.

Trust is also a question between companies. Would you buy e.g. financial services from the local freelancer accountant, a local branch of a big financial services company or trust your bank account to a really cheap team of accountants from another part of the world?

Forth - Learning to work with people from different cultures

(Midjourney: different cultures, working, office, 4k hd, photo quality)

Working with people from different backgrounds takes more time to adjust than working with the people who have grown up in the same city, speak the same language and have attended the same universities. It is possible and there are tools and ways to do it, but it just takes a bit more time and effort.

The forces pushing the work to be remote

(Midjourney: crowded London subway, 4k hd, photo quality.
woman working from home, computer screen, happy, shnshine, 4k hd, photo quality)

Most of us know the everyday reasons for people appreciating the possibility to work remotely. Most importantly you avoid the commute, save an hour or two a day. You can handle some family errands, like let in the plumber or take care of children.

These are important, but on a wider scale remote work opens up totally new possibilities. Now people don't have to be in the same headquarters, in the capital to work for an organization. Now everybody does not have to move to London, Paris, New York and Silicon Valley anymore. You can work for example for a global bank or why not a French ministry from a small remote village in Finland or Estonia. If you think this idea further then you notice, that now that people don't have to move to the big city for jobs, they can stay or move to the smaller town where real-estate is cheaper, school is closer and life is thus easier. 

The third, very important force pushing remote work is the need to get best price performance and fast access to talent from the business side. When remote working is possible the organisations are not limited to hiring talent from where they are. This is an opportunity to find specific skills, but also an opportunity to drive down prices. For the last 2 years, I have been wondering, why the US companies are paying 200-300 000 salaries to engineers, when they could get a small team for that price from Europe.

The bright future!

(Midjourney: nice small town street, happy people, sunshine, film scene, people walking and tlking, 4k hd)

Looking at the big picture:

• Trying to get the best price performance, skills available drives organizations to hire remotely.
• Possibility to work for different teams remotely drives specialists to work for organizations that might not be established in the city they live in.
• Technically remote working is possible from anywhere. However, in practice it is possible from the same state or legal framework that the organizations legal entity is.
• Building trust, language and culture limit the speed of change

Work is moving out from expensive big cities, but not to the countryside

(Midjourney: crowded city, people walking fast, billboards, stress, 4k hd, film scene)

For the last decades the we have experienced a surge in urbanization. There have been two reasons behind it. Firstly, industry and logistics have been built close to each other, thus creating cities for their workers.

Secondly, offices and headquarters have been concentrating employees to big cities and capitals. Each office job that moves to the city means that 4-5 other jobs will move there with it. These are physical jobs like plumbers, teachers, shop personnel, couriers, construction workers and others moving to the city to serve the office workers.

In the modern hybrid- and remote-working we don't have to move the office work to the cities anymore. Where the jobs will be boils down to money and time. The price of real-estate, commute makes big cities in-efficient and expensive. Thus people and jobs will slowly start to move out from mega-cities.

On the other end of the scale people sometimes dream of a life on the countryside. This is technically possible with remote working. You can live in the middle of the forests and write software or do process management for a multi-national telecom.

 

(Midjourney: house, snowstorm, countryside, road full of snow, 4k hd.
unhappy children in the back-seat of a car, driving, countryside, bored, 4k hd)

However, living in the countryside is also very expensive and time consuming. Every trip to the kindergarten, school, hobby or doctor is a long drive. Building and taking care of the infrastructure like roads, snow, electricity, water, Internet, is tens or hundreds of time more expensive than in a city. And if there is no reason, like keeping animals or farming, to live in the countryside, then why would you pay the extra cost in money and time.

Thus the optimal place to live and where the jobs will move are towns and small cities. Towns where there is enough service, but that are not too big to make the real-estate disproportionally expensive and commutes long. What is a "small city" varies on the services a family needs, eg. is a movie theatre OK or do they regularly want to go to the ballet. Are the kids happy to play football or do they want to practice the violin on a professional level. However, I would say the optimal size is between 10 000 - 500 000 inhabitants. A place where you can get anywhere by bike perhaps?

(Midjourney: woman and child biking in a small town, smiling, happy, sunshine, 4k hd)

How has the progress been in Solita

Solita develops data and IT systems for large organizations in the whole Europe and even outside. To do that we hire talented consultants in the countries we are present - Finland, Sweden, Denmark, Belgium, Estonia and Germany. In Solita we have definitely seen the hybrid and remote work changing the nature of our work. There are two sides to it.

(Midjourney: female sales person, talking on a phone, home office, sunny weather, photo quality, 4k hd)

Firstly, on the customer side, we have seen that the need to be present on the customer office has declined dramatically. Largely, because the customer's team members also work remotely and from different locations. The change is quite drastic and we have seen remote work become possible in roles that was unheard of in 2020. For example B2B sales, large project management and UX-design are tasks that can be done remotely nowadays. The only big obstacle of full-around-the-world remote is the language. Many organizations and many projects still prefer to work in the local language.

(Midjourney: unshaved man working form home, computer screen, headphones, software development, busy, 4k hd)

Secondly, on the specialist side, we have opened up many new small offices (e.g. in Vaasa, Joensuu, Jyväskylä, Kuopio and in Tartu). We have also opened the possibility to work remotely from anywhere in the countries we are present. Naturally, a specialist working remotely or in any of our small offices does not have to work for a customer in that city. No, it is mixed, multi-site, multi-country teams delivering to multi-country, multi-site customers. This is the future! Working from Tartu with team-mates in Tampere and Göteborg for a customer whose headquarters are in München.