[COVID-19 Transformation] Global Talent Recruitment VS Loss of Creativity

Advantages and Disadvantages of Remote and Telecommuting Work Through US Company Cases
Automatic, Basecamp... Rapid Growth Riding Remote Work Trend
IBM Returns to Commuting After 24 Years

[Asia Economy Reporter Onyu Lim] South Korea was a 'Galapagos' of remote work until the spread of the novel coronavirus infection (COVID-19). Despite boasting top-level internet speeds and smartphone penetration rates, paradoxically, the remote work rate was only 4.3% until last year. While Korean office workers suffered from overcrowded trains and buses, global companies continuously experimented with remote work, and even location-independent telecommuting. The United States was the first to experiment with remote work, during the 1980s amid the second oil shock caused by the Iran-Iraq War. As oil prices soared and rents increased, remote work was tried as a cost-saving measure. It gradually spread with the development of the internet, but conclusions vary. Companies like Automattic and Basecamp maintain remote work, while others like IBM have returned to commuting.

◆Light: "Hiring talent from all over the world"= Matt Mullenweg, CEO of Automattic, argued that "companies that do not adopt remote work will be expelled by other companies in the near future." Founded in 2005, Automattic is the company that developed WordPress, a web page creation and content management system. It is a giant that built 34% of websites worldwide, including The New York Times. Automattic actively adopted remote work from its early days. In 2017, it even closed its San Francisco headquarters, which had about 20 employees. Designers, developers, and HR staff all work scattered across 50 countries worldwide.

Regional Distribution of American Automatic Employees on a World Map

The biggest reason Automattic practices remote work is talent recruitment. Employees work at designated times and only need to show results. The fact that Automattic has grown into a company with a market capitalization of $61.7 billion (about 75 trillion won) in 15 years demonstrates the potential success of remote work. CEO Mullenweg said, "Smart talent from around the world is flocking to remote work companies," adding, "This has enabled Automattic to grow."

Basecamp, which creates online collaboration tools, has maintained remote work since its founding in 1999. The company is also famous for building an independent revenue model without investment, and remote work was a key means to reduce unnecessary expenses that made this possible. The belief that productivity is maximized when individuals are granted maximum autonomy is another reason for maintaining remote work. Employees work scattered across the U.S., Australia, and Hong Kong. David Heinemeier Hansson, CTO of Basecamp, said in the documentary One Way Ticket, "We don't need an office or to be in the same space," adding, "Thanks to cost savings, we can go the way we want without investment."

◆Shadow: "No meetings, so creativity is lost"=On the other hand, American computer company IBM abruptly abolished remote work in 2017, 24 years after introducing work outside the office in 1993. Since 40% of its 380,000 employees worked remotely, the move was shocking. IBM was also famous for creating a commuter pain index and theorizing the advantages of remote work.

IBM returned to commuting to enhance 'innovation and creativity.' Michelle Peluso, then IBM's Chief Marketing Officer, said, "Office work is a choice for innovation and a creative work environment." This was also interpreted as meaning that the lack of face-to-face contact due to remote work reduced work efficiency. There was also analysis that IBM aimed for workforce reduction effects.

Compared to the merits of saving commuting time and office rental costs, the unclear effect on increasing work efficiency and the blurring of boundaries between work and rest leading to overwork are also pointed out as problems of remote work. According to a survey by the International Labour Organization (ILO) of European Union (EU) member countries, working outside the office improves productivity but increases working hours and risks mixing work and private life. For example, half (50%) of Dutch remote workers worked on Sundays. The proportion reporting stress was also 40%, twice as high as office workers (20%).

Not only IBM but also Bank of America (BoA) and Reddit have reduced remote work, leading to speculation about a return to commuting. Moreover, successful Silicon Valley innovation companies like Google, Facebook, and Apple are strengthening office work. Apple’s founder, the late Steve Jobs, placed essential facilities centrally to enable natural exchange of opinions.

However, experts predict that these cases will not lead to the end of remote work. Peter Cappelli, professor at the Wharton School of the University of Pennsylvania, said, "The future form of work will be more agile," adding, "Companies’ offices where employees gather will likely exist in virtual spaces without constraints of time and place."