As remote work grows, office needs reexamined

There's a trend sweeping through the U.S. auto industry, and it's threatening to do to the cubicle what the crossover did to the sedan.

Several automakers — including Ford, Daimler and Toyota — say they've been so impressed with how efficiently some of their U.S. employees have operated while they have been forced to work remotely during the COVID-19 pandemic that they are now thinking about extending the arrangement, perhaps even making it permanent.

Such a dramatic shift in the hidebound world of office work could bring with it myriad effects to the way large companies, including automakers, manage day-to-day operations: their hiring practices, staffing levels, company culture and even their needs for commercial real estate.

"Work-from-home is something that we had tested and tried on a very small basis" pre-COVID-19, said Bob Carter, head of sales for Toyota Motor North America and a member of the automaker's top management team on the continent. "I'll admit that maybe my management was a little bit old school, where I was a little reluctant," he said. Carter was concerned that "in a work-from-home environment in operations, we're going to lose a lot of this efficiency that we're famous for. But I can tell you proudly that our people have really stepped up."

While remote work presents challenges, such as building and maintaining a strong company culture, executives say the potential for improving morale, talent acquisition and efficiency makes it worth exploring further.

Carter said, for example, that Toyota had experienced a measurable productivity increase from its 300-person call center in Plano, Texas, after employees there started working from home.

"Work-from-home works extremely well for some of our associates," Carter said.

Last week, Ford said it planned to survey some 30,000 nonmanufacturing employees in the U.S. about their preferences on where to work beyond September, when the automaker had planned to recall those workers who had been working remotely since the virus swept through the industry and the nation in March. Ford said it will ask its employees whether they would like to continue to work remotely, return to their previous work site or do a mix of both.

"As we make plans to bring back the remote work force, many team members favored these new ways to work and found them empowering, flexible and cost-effective," Ford said in a statement. "This flexibility allows Ford to continue prioritizing safety actions such as sufficient PPE for all of the place-dependent work force who have already returned, as well as for those who would be returning later this summer, and prioritize the modifications needed to additional facilities to ensure the proper social distancing protocols are in place."

Last month, Mercedes-Benz USA CEO Nicholas Speeks ordered the German luxury automaker's 875 employees at its Atlanta headquarters to continue to work remotely for at least the rest of 2020 and perhaps beyond.

"We are able to function effectively, and it gives people an opportunity" for better work-life balance, the CEO told Automotive News. He described the work-from-home policy as a trial without a firm expiration.

"We are going to see how that goes," Speeks said. "It gives us an opportunity to try something different."

For automakers such as Toyota, having thousands of employees suddenly forced to work from home because of the pandemic seemed like it could have led to disaster. But as the weeks went on and the work continued to get done, executives started to study what it could mean over the longer term.

In an extended interview in May, Toyota Motor North America's Chris Reynolds, who oversees the Japanese automaker's manufacturing and human resources functions, said remote work had shown "a lot of potential" to broaden the talent pool from which the company draws its employees — including those at its headquarters in Plano, which opened in 2017.

"If we're now working from home and can do things virtually, do I care whether you're in Plano, Texas, or Detroit, Mich.? I may not, depending on the job, as long as you can get to Plano periodically to meet with your team," Reynolds told Automotive News Publisher Jason Stein as part of the "Congress Conversations" series.

"I think there's a lot of potential here, where we can see, not just for Toyota but for many other companies, a broadening of the geographic footprint of our talent, which means more talent, which I think also means better talent. I'm actually looking forward to the upside, which is, I may have access to more talent than I did."

The trend toward a wider embrace of remote work extends beyond automakers. Last month, Twitter CEO Jack Dorsey told the social media company's employees that they could continue to work from home "forever" if they so chose. Service providers, suppliers and even auto dealers nationwide have also had to transition portions of their staffs to work remotely because of the virus, and they have seen some success.

"I think we will not be returning to the way things were," said Katee Van Horn, CEO of VH Included Consulting and Coaching and a former HR executive with a Fortune 500 company. "A lot of companies are seeing returns from a productivity perspective and an employee-happiness perspective."

Van Horn said the technology that enabled remote work grew exponentially better in just the past several months, allowing workers to more fully participate in and contribute to their jobs, regardless of their physical location. She said the implications for the broader economy could be huge over the long term, in terms of compensation, real estate values and quality of life, for starters.

"I'm sure there will be good and bad things about it, but it's similar to the electronic revolution, where you have this mini computer that you now carry around in your pocket that you can access anything that you want anytime," Van Horn said. "I think there are going to be some major shifts from a financial perspective, and that's going to be interesting."