Tag Archives: future of work

Is It Time To Get Rid Of The Open-Plan Office?

Well conducted research is beginning to appear and it does not look good for the open plan office…

By Monkey Business Images/ Shutterstock

The open plan office is the badge of the thoroughly modern work space. It’s as much a part of the office of the future as unlimited free snacks and Fussball tables in the common room.  But research is starting to pile up that it is doing more harm than good.  A lot more harm than good.

By 2014, seven out of every ten offices were open plan according to reporting in the New Yorker.  Gone were the sea of cubicles that inspired Dilbert’s creator.  Instead the typical office looked more like an aircraft hangar full of desks.  The theory was the removing physical barriers removed barriers to collaboration and communication. 

Oh, and there was the no insignificant bonus that they cost a lot less to build and fit out and employees and their work were easier to monitor.  While that theory has logical appeal there was surprisingly little empirical evidence to back it up. The research that did exist was based largely on self-reported questionnaire responses and attempted to measure largely intangible outcomes like employee satisfaction.

Open Plan – does it actually work?

Now however, well conducted research is beginning to appear and it does not look good for the open plan office.  In July last year, the Harvard Business School conducted a large study with a first of its kind methodology.  The researchers decided to use wearable technology such as movement sensors, cameras and microphones embedded in badges to accurately measure whether open plan offices actually did increase collaboration and communication.  The devices were deployed in two different company headquarters before and after a shift to an open plan design.

To ensure robust data, the researchers ensured the devices were deployed over a long time frame and measurements were taken at the same points in the business cycle.  There was no point comparing an end of quarter rush to a start of quarter quiet period.

The results were extraordinary.  Rather than increase face to face collaboration and communication, the shift to open plan massively decreased it.  People talked face to face 70 per cent less in an open plan office than in the normal office space that had preceded it.  The researchers speculated that the open plan triggered a natural human withdrawal response to large groups.  People have a fundamental desire for privacy and the open plan violated that.  Workers stopped talking in person and IM and email traffic surged by 50 per cent.

Perhaps more importantly, from a bottom-line perspective, the change also decreased productivity and work quality in both of the studied companies.  Other studies have estimated the value of this impact to be in the region of a 20 per cent decrease in productivity.

This new research adds quantitative weight to something more traditional studies have been highlighting for the last couple of decades.  Such studies have found that open plan offices had a negative impact on job satisfaction, attention spans and creative thinking, have dramatically increased levels of stress, conflict and staff turnover and significantly increased sick leave.   

And all of that is before we consider the cost of distraction.

Lack of Privacy

A 2013 study of open plan offices revealed that nearly half of the surveyed workers said the lack of sound privacy was a significant problem for them and more than 30 per cent said the same thing about visual privacy.  The same researchers in a previous study concluded that the loss of productivity “due to noise distraction” was doubled in open plan offices. 

It’s not surprising then that the Information Overload Research Group a non-profit consortium of business professionals, researchers, and consultants, estimates that distraction wastes 25 per cent of knowledge workers’ time and is costing the United States economy almost one trillion dollars a year.

Clearly the answer is to put the walls back in.  It might not create any net gains but at least it would reclaim the ground lost by the disastrous detour into communal office space. However,  if you really want to increase productivity, keep the talent happy and retain your best staff then the evidence is now suggesting that you should delete the office altogether and let employees work from home. 

The Worst of Ideas

A recent very large randomised controlled study on a Chinese call-centre operators, for example, found that working from home increased productivity by 13 per cent.  Nine of those percentage points were from working more minutes per shift and four per cent from more calls per minute.  

Home based workers also reported feeling more satisfied and the attrition rate halved. Working from home is not for every employee or every type of job but at least there are upsides and the good news for the CFO is that it saves even more on floorspace costs than the open plan office. 

The open plan office was a bad idea implemented for spurious reasons with an inadequate evidence base.  And it turns out to be a terrible idea.  All we need now is management teams brave enough to admit that and move towards work structures the evidence says significantly improve rather than degrade productivity.

Is The Gig Economy Changing The Way We View Work?

The ‘gig economy’ is just a hipster way of describing people who contract their labour rather than being full time employees. But is it changing the workplace?

By LightField Studios/ Shutterstock

We are constantly told that the ‘gig economy’ is about to destroy the workplace as we know it. We apparently have entered a brave new future where workers are no longer tethered to a business and lack the protections of employment laws written in a bygone and largely irrelevant era.  But the evidence tells a very different story.

The ‘gig economy’ is just a hipster way of describing people who contract their labour rather than being full time employees.  In that sense, gig workers have always been part of our economy.  Most tradespeople, for example, run their own businesses and contract their labour to multiple employers, often simultaneously. 

Recently however, contracting or ‘gig working’ has bled more and more into jobs previously occupied by full-time employees.  Taxi drivers are the most obvious modern example.  Formerly a driver worked for a company who owned and serviced the car.  The driver worked for a wage or for a percentage of the fares collected.  With the advent of Uber, the car is owned and serviced by the gig worker and they get to keep a much bigger (in theory) proportion of the fares earned. And it doesn’t stop there.  Gig workers are doing a similar thing when they turn their home into a hotel and themselves into hoteliers using AirBnB.

But for all the headline-grabbing hoo-ha about Uber, AirBnB and Lyft etc., gig workers using electronic platforms still only account for about 1 percent of the workforce. If we include contractors, temps and on-call workers of any description in the definition, about 10 per cent of the US workforce is part of the ‘gig economy’.  And that percentage has not moved at all since 2005.  The overwhelming majority (90 per cent) of workers had full-time jobs in 2005 and they still do.

The introduction of electronic platforms like Uber, Lyft and AirBnB may not have changed the overall numbers but it has changed one very important aspect of contracted labour, the age of the person doing the work.  Between 2005 and 2017 the percentage of ‘gig workers’ aged 35-44 dropped from a quarter to a fifth.  Meanwhile the percentage aged 55-64 increased by 25% and the numbers aged over 65 almost doubled.  Today’s ‘gig workers’ are increasingly older workers who in earlier times might have been receiving a government pension or living out their golden years on their savings. The reality couldn’t be further from the youth culture branding of the digital platforms.

Gig platforms may be growing but they are largely not replacing more standard work patterns. The JP Morgan Chase Institute (JPMCI) tracks payments to the bank accounts of workers in the ‘gig economy’ (via the platforms that arrange the work).  Their data shows that, for most of those workers, gigs are sporadic and are usually a second job done in a household where another member has a fulltime job.

And far from suffering lesser conditions, data from the US Labour survey shows that the group of gig workers growing fastest (those over 50) had the highest weekly earnings and greatest level of health insurance and retirement coverage of any age group.  All of those measure increased significantly between 2005 and 2017. 

The same survey did however identify a different and more concerning trend for younger workers when compared to its 1995 results.  There is an undeniable decline in work conditions for workers in general.  There is less job security, fewer opportunities for promotion and the increasing probability that their job will be outsourced to a company paying lower wages and offering less benefits.  This is increasingly being driven by the deliberate creation of ‘contracting’ roles which in reality are being performed by people who on any reasonable measure are full-time employees.  The contractor status gives the employer much more flexibility but destroys job security for the employee.

There is a lot of spin associated with the story of the gig economy and it is probably driven by tech companies which have a lot to gain by us believing they are much more important than they are.  The reality is that gig work is not increasing.  All that is changing is the method of arranging it and the age of the people doing it. 

But all the noise about the gig economy hides a more important story.  Full-time job security is declining and with it, people’s overall earning capacity and sense of worth and well-being.  We need to care less about the marketing spin emanating from the ‘gig economy’ and more about the very real declines in job security. 


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