'Remote work isn't so good' air travel implications

[Melburnian1]

There's a lengthy USA-sourced (Dow Jones) article on 'The Australian' website on Sunday 26 July about how many companies are beginning to think 'remote work isn't so good after al.'

This is a small extract:

'...Now, as the work-from-home experiment stretches on, some cracks are starting to emerge. Projects take longer. Training is tougher. Hiring and integrating new employees, more complicated. Some employers say their workers appear less connected and bosses fear that younger professionals aren’t developing at the same rate as they would in offices, sitting next to colleagues and absorbing how they do their jobs.

Months into a pandemic that rapidly reshaped how companies operate, an increasing number of executives now say that remote work, while necessary for safety much of this year, is not their preferred long-term solution once the coronavirus crisis passes.

“There’s sort of an emerging sense behind the scenes of executives saying, ‘This is not going to be sustainable,’” said Laszlo Bock, chief executive of human-resources start-up Humu and the former HR chief at Google. No CEO should be surprised that the early productivity gains companies witnessed as remote work took hold have peaked and levelled off, he adds, because workers left offices in March armed with laptops and a sense of doom...'

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I interpret this as a 'plus' for air and other travel (eventually) when State borders open and when we are able to travel internationally.

This doesn't mean demand in say February 2021 won't be lower than it was in February 2019.

But I just can't see working at home being satisfactory, productivity-wise, in the long term. Also, mankind has a need to connect with others. Missing those small signs in an office or factory meeting that one can't pick up on WebEx or Zoom is another reason why intrastate and interstate, plus international, travel will be important.

I wouldn't suggest rushing out and buying USA (or Australian) airline shares but by the same token, there's some guarded reasons for optimism that work travel won't be dead once it's permitted. (I speak as a Victorian: people in NSW can already travel in most cases to Queensland).

 

[trooper]

I don't see the connection between the downsides mentioned in that extract...and the resumption of business travel... I am certain the extract you posted is right about the need for human contact for certain purposes within organisations, locally ...but whether a similar need for such contact will be seen to outweigh the expense of travel is I think something we can't predict yet. Zoom etc may be seen as "adequate" for many purposes that used to involve travel. Time will tell.

 

[kookaburra75]

I don't see the connection between the downsides mentioned in that extract...and the resumption of business travel... I am certain the extract you posted is right about the need for human contact for certain purposes within organisations, locally ...but whether a similar need for such contact will be seen to outweigh the expense of travel is I think something we can't predict yet. Zoom etc may be seen as "adequate" for many purposes that used to involve travel. Time will tell.

It's interesting reading through the different viewpoints. We've been working mainly off-site/from home for the past five years, with contact back in the office when required. It suits the mix of people we have; including women returning from maternity leave etc - and it's efficient being a small start up. The sort of work we do selling SaaS products and supporting professional services doesn't need us to be fixed locations, or even on client site all of the time. We have a connection to a UK business and an office in Ottawa, so 'remote' working is sort of our 'norm'. Certainly our sales effort has been taking a hit as we can't get on a plane to sit in front of people to make the pitch - and that was the bulk of our travel spend. But then, no-one would want us in their office anyway, so we've worked out new ways of making people open their wallets.

In an article in the recent edition of the AFR, How much time do you really need to spend in the office? (subscriber link), the panel members felt 20% of time in the office was about right, to tackle the problems where people needed to interact more closely - and I'd agree. The opening paragraph:
"Business leaders around the world are coming to the conclusion they don't need all office workers to actually be in the office to achieve their revenue and profit targets. The giant working-from-home experiment has shown that staff can be just as productive – if not more productive – working remotely. And the majority of employees, it seems, can be trusted"
sums it up, especially the last few words "... can be trusted".

Likewise, I've been swapping notes with contacts in other businesses as well as our client base. Looking at the article that Melburnian1 posted, I think at the heart of it is a lot of middle managers who haven't been able to change their way of thinking to suit the times - the ".. it will all go back to normal soon.." approach. I'm seeing quite a few middle managers whose power rests in controlling people by having them there at their beck and call, lost in the current situation. That includes jetting around to hold a single meeting interstate, usually with a few extra people in tow to show off their power. Will that lot be able to start getting back onto flights? I think for a lot of organisations, the simple fact they have been able to maintain or even improve productivity in some cases without having to spend a lot of money on travel, will mean future travel budgets are going to get cut as organisations try and undo some of the damage from the current situation.

Interesting times.

 

[Melburnian1]

...Interesting times.

If trooper's and kookaburra75's sentiments prove 100 per cent (or even 60 per cent) correct, that's very worrying for QF, VA 2.0, ZL and a host of international airlines like SQ, CX, UA and so on. It would almost certainly mean VA 2.0 would be hard pressed to ever make what its owners would consider an acceptable return on the Bain Capital employed (although 2.0 has yet to get through the creditors' meeting and any possible post-event legal action).

The jury is out as to whether my relative optimism is justified.