[Jjinbit] "Going to the office adds travel expenses" Japan NTT's radical 'Remote Work' [Office Shift](22)

"Efficient Talent Utilization" Purpose, Also a Perspective on "Preventing Talent Drain"

Editor's Note[Jjinbit] is a shortened form of 'Jung Hyunjin's Business Trend' and 'Real Business Trend,' a segment that showcases trends in changes in work. The segment within Jjinbit called 'Office Shift' closely examines changes in offices triggered by the COVID-19 pandemic and aims to establish a foundation for exploring answers to work styles through experiments we have conducted together. It will be delivered to you every Saturday and Sunday morning. After 40 installments, it will also be available as a book.

"If you come to the office, it is treated as a business trip and travel expenses are paid."

Japan's telecommunications company NTT Group has remote work as the default rather than office work. Since last year, some employees have been allowed to freely choose their place of residence. It does not matter where in Japan they live. This means there is no need to live within two hours one way from the company to commute. They can work remotely. In fact, if they come to the office, it is considered a business trip and expenses are paid. As a result, some employees started working from their hometowns and only flying to the office once or twice a month. The number of 'solo employees' who lived away from their families near the office decreased by 400.

NTT is a typical large company with 190,000 employees in Japan alone and more than 330,000 including overseas staff, adopting a new remote work system in conservative Japanese society. According to a survey of 120,000 employees of major NTT affiliates, the proportion of employees working remotely four or more days a week increased from 39% in 2021 to 47% in 2022. Now, 5 out of 10 employees work outside the office.

(Photo by NTT SNS)

Kyoko Yamamoto, General Affairs Director leading this experiment at NTT Group, said in a written interview with Asia Economy on the 11th that the introduction of remote work "has career merits for employees as it does not limit their activity opportunities, and advantages for the company in efficiently utilizing talent." She emphasized that through changes in work systems, "we want to promote 'Work in Life' (healthy management realizing well-being) by enabling employees to freely choose and design how to work within their lives, including working hours, location, and residence."

◆ Increasing Flexibility Brings Win-Win for Company and Employees... Productivity Hits Record High

NTT first introduced remote work in 2003. It was a system allowing employees, mainly those raising children or nursing parents, to work remotely up to twice a week. Later, in 2020, due to the spread of COVID-19, NTT expanded the scope of remote work and took measures such as supporting commuting expenses. After conducting this remote work experiment, NTT proposed a new direction in September 2021 to make remote work the default and allow employees to freely choose and design their work styles, which was implemented from July 2022.

Why did NTT choose such a radical approach in Japan, where office culture is known to be conservative? Yamamoto said, "We judged that NTT needs to lead a distributed network society, so we moved in this direction. We believe this contributes not only to our company but also to supporting customers' digital transformation (DX), promoting regional revitalization, and enhancing resilience."

However, some say this measure was taken to prevent talent outflow from NTT, which ranked first in global market capitalization in the 1980s but has since seen talent leaving. Reports have described NTT as a 'GAFA (Google, Apple, Facebook, Amazon) academy' due to the flood of talent leaving for Silicon Valley. This analysis suggests the system was introduced out of an urgent need for change to survive global competition.

NTT's remote work focuses on improving employee well-being. Yamamoto said, "With increased flexibility in location and time, it becomes easier to work and opportunities to excel expand. Employees from diverse backgrounds can work freely, feel growth through work, and overall life satisfaction improves, realizing well-being." In fact, satisfaction with well-being-related items in employee surveys rose significantly after introducing remote work.

Notably, the proportion of employees choosing the 'short-time work system,' which reduced working hours from 7 hours 30 minutes to 4-6 hours for childcare, halved due to changes in work systems at NTT. Increased flexibility in time and place and the ability to use commuting time allowed more employees to work full-time. Yamamoto said, "From the employee perspective, there are career merits as activity opportunities are not limited, and from the company perspective, talent can be utilized efficiently."

Kyoko Yamamoto, General Affairs Director of NTT Group (Photo by NTT)

So, did the introduction of remote work reduce turnover? When asked, Yamamoto replied, "The turnover rate has fluctuated within a certain range over the past three years, so it is unclear whether remote work affects turnover." However, he added, "Previously, employees resigned due to reasons such as moving with a spouse's transfer or caring for parents. Many cases have emerged where these employees continue working at NTT using remote work."

Regarding criticism, mainly from the U.S., that remote work lowers productivity, Yamamoto said, "We believe there has been no significant damage such as productivity or performance decline due to remote work." He emphasized that in 2022, NTT recorded the highest-ever operating revenue and operating profit. According to surveys, 92% of employees felt productivity either improved or remained unchanged.

Yamamoto explained, "From a business perspective, reforms in work styles including remote work provide an opportunity to review work processes, leading to DX promotion such as automation of equipment inspection tasks."

◆ Communication, Education, IT Infrastructure... 'Three Missions' for Remote Work

Remote work is still an 'unfinished system.' Although NTT announced full adoption over a year ago, challenges remain.

Communication issues, the biggest concern when introducing remote work, were also confirmed at NTT. Yamamoto said, "In the most recent survey, employees cited 'communication with supervisors and within teams' as the area where productivity felt reduced." To address this, training was provided to managers on how to conduct one-on-one meetings and communicate with subordinates. They also implemented one-on-one meetings between supervisors and employees and took measures to create face-to-face relationships at the team level.

Regarding employee education, Yamamoto said, "New employee training is often conducted remotely immediately after joining, but after assignment to workplaces, they learn work through a hybrid of remote and face-to-face." Even with remote work, seniors and team members maintain daily communication to check how well new employees have learned tasks, provide guidance on unclear points, and offer support. He added that observing senior employees working in the office is also important, so a hybrid of face-to-face and remote is recommended.

Yamamoto said, "Surveys show that the age group with the highest frequency of remote work is people in their 30s, followed by those in their 20s," indicating demands from younger generations. However, they recognize the need for qualitative improvement in communication (relationships). He also noted that many young employees who spent their school years attending remote lectures during the COVID-19 crisis actively seek face-to-face and interpersonal relationships.

Yamamoto emphasized the importance of IT equipment introduction for remote work. When asked for advice to companies considering remote work after NTT's early adoption, he said, "Circumstances vary depending on work content and systems, but in our case, we recognize that IT environment maintenance, open communication, conversational management, and visualizing and sharing information and processes are key factors determining the success of remote work."

He stressed, "Currently, some tasks are difficult to perform remotely. However, we aim to increase the number of tasks possible to do remotely through DX promotion and other efforts."