[The Work Revolution] Why Did IBM and Yahoo Fail at Remote Work?

Changes in Productivity Evaluation
In the Past, Control and Collaboration Were Impossible
Recently, Bias Has Disappeared

[Asia Economy Reporter Han Jinju] The concept of telecommuting began with research by Jack Niles, a scientist at NASA, in 1973. While devising ways to reduce the inconvenience of long-distance commuting, a Los Angeles insurance company piloted telecommuting. The result was a failure, as management failed to control employees as before.

Some companies adopted telecommuting early on but ultimately could not sustain it. IBM discontinued telecommuting, which it had operated since 1993, in 2017 due to issues with collaboration, communication, and decreased productivity. Yahoo also ended telecommuting in 2013; then-CEO Marissa Mayer said, "People are more collaborative and innovative when they are face-to-face." In Korea, telecommuting was also a very exceptional practice. According to the Korea Information Society Development Institute, as of 2019, only 9.7% of businesses operated telecommuting systems. While 64.2% of employees felt telecommuting was necessary, only 30.6% of businesses agreed.

However, amid the prolonged COVID-19 pandemic, telecommuting has become an obstacle that companies must overcome to operate normally. The productivity decline, once seen as a hurdle, is being resolved through advances in IT. Dan Spolding, Chief Human Resources Officer at the U.S. online real estate company Zillow, said, "The prejudice against working from home has disappeared, and there is no evidence of decreased productivity. Zoom meetings can be good or bad, but it is questionable how many employees would prefer to return to an office environment like in the 1980s." The company has allowed all employees to work from home until next year.

Professor Nicholas Bloom and his team at Stanford University conducted a nine-month experiment with employees of China's Ctrip, having them work from home four out of five days, resulting in a significant productivity increase. Employee performance improved by about 13%, turnover dropped by 50%, and costs per employee decreased by approximately $2,000.

In Korea, the biggest advantage of telecommuting is the reduction of energy and time spent commuting. The average commute time in Korea is 40 minutes, nearly twice the OECD average of 23 minutes. According to the Ministry of Land, Infrastructure and Transport, residents of the Seoul metropolitan area spend an average of 1 hour and 21 minutes commuting by public transportation. As a compromise, some companies allow flexible use of both office and remote spaces. SK Telecom operates hub offices to reduce employees' commute times to around 20 minutes and plans to expand from the current four locations (Bundang, Pangyo, Seodaemun, Jongno) to ten.

Telecommuting is expected to continue for a considerable period even after COVID-19. Song Jihwan, senior researcher at the Software Policy Research Institute, explained, "Advanced countries such as the U.S. and Europe are expanding remote work to address social issues like traffic problems, low birth rates, and childcare. COVID-19 could be a starting point for transitioning to a digital society. As work styles like telecommuting accelerate to overcome spatial and temporal constraints, systematic policy support for telecommuting is necessary to respond to these social changes."