From the Den to the Cubicle: Companies End Telecommuting

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By Kevin Gillihan
Senior Associate
Jones Lang LaSalle

The news of Yahoo! and Best Buy ending their telecommuting policies garnered a lot of attention over the past few weeks, both positive and negative, and has put the long-accepted concept of Results-Only Work Environments back into the spotlight.

A Results-Only Work Environment (ROWE) is the philosophy that employees should be paid for their results, not the amount of time they spend working in the office. ROWE has become extremely popular, especially in the tech industry. But, what happens when the results don’t live up to the company’s expectations?

Yahoo! CEO Marissa Mayer — arguably the most scrutinized executive in Silicon Valley, if not the country — has seen a lot of backlash for her decision to take employees out their dens and back into their cubes. Mayer is known for making decisions driven by raw data, and the data has shown that employees just weren’t getting enough work done at home. tech workers are known for their entrepreneurial spirit, which might explain the massive number of Yahoo! employees working on side projects, putting in fewer hours and disappearing from the company radar.

Best Buy, the originator of ROWE back in 2005, also decided to scale back its telecommuting program. This strategy was once believed to be a Best Buy employee’s right; now it’s approved on an employee-by-employee basis.

Obviously, for these companies and others making a similar decision, bringing employees back into the office will drive demand for more office space. More importantly, it will increase the need to build out high-quality and collaborative workplaces. Companies that choose to eliminate the work-from-home option need to compensate in other ways. We are seeing office space build-outs that center around open, highly collaborative lounges and kitchenettes, with some going as far as keeping a fully stocked kitchen and bar. The goal is to create a fun culture where people want to be in the office and have no issue with working long days or staying after hours.

It is important for such companies to view the cost of office space not as a bottom-line expense, but as an investment in its culture, recruiting efforts, employee retention and productivity. Although a non-ROWE practicing company may take more space and build out a higher quality office, if it is viewed as a value add, the results may continue to justify requiring a physical presence at the office.

Is this the end of working from home? I am sure that many companies will be monitoring Yahoo! and Best Buy closely in the months to come. But one way or another, the ROWE trend will continue to have an impact on the office space market.

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