“A Convenient Excuse”
THE Noted SVB report employees may struggle to find a work-life balance while remote, which could lead to “reduced productivity and/or significant disruptions to our business operations.” He also flagged online connectivity issues and cybersecurity threats as other remote-related risks.
But some workplace experts say blaming performance issues for remote work as the underlying cause of SVB’s recent failure is “a convenient excuse that ignores deeper organizational issues and doesn’t address root causes of the problem,” says Dan Schawbel, managing partner of the HR department. Workplace Intelligence research firm.
“Remote work by itself is not the cause of the performance issues,” he told CNBC Make It. On the contrary, “what probably contributed to the collapse of SVB was a lack of effective leadership, communication and management practices”.
Experts say a decline in employee performance has more to do with leadership than remote work. Working from home may change the technology of getting work done, but “a trusted leader can play on a park bench with a can and strings and create a great employee experience,” says Michael Bush, CEO of Great Place to Work, the global research and analysis company that assesses workplace culture.
The majority of SVB’s 8,500 employees work remotely across the US, including senior executives, FT reports – unlike financial giants like Goldman Sachs and JP Morgan who have championed returning to the office throughout the pandemic. . The Federal Deposit Insurance Corp, which took over SVB, told workers to continue working remotely, except for essential workers and branch employeesaccording to Reuters.
Remote work isn’t the only barrier to productivity
There is little data to support the fact that remote work has hampered productivity during the pandemic, as business performance soared throughout 2020, 2021 and most of 2022 based on the data. Great Place to Work of 30,000 global companies, 10 million leaders and nearly 40 million employees.
But an increasingly volatile economy with rising inflation, rising interest rates, income pressures and workers’ fears of job insecurity is having an outsized impact on engagement and performance, says Bush.
“Businesses have done very well through Covid and have started to stumble over the past seven to eight months as financial pressures mounted, but distance had nothing to do with it,” Bush says, adding that other financial institutions like Bank of America and American Express continue to be profitable while embracing remote work.
SVB may also have struggled to onboard new employees during a pandemic hiring spree.
Bush acknowledges that remote work makes it harder to onboard early career employees and new hires, but adds that companies have always struggled to onboard, even before Covid. He says it could take another four to five years for organizations to figure out how to effectively onboard new employees into a virtual environment, whether that means incorporating in-person training early on or investing in metaverse technology to improve the transition.
Bush says it won’t be surprising to see more executives point to remote working as risks to productivity, but it oversimplifies how companies should think about the future of their work policies. hybrid and remote.
SVB’s collapse may be the first to occur in the new era of remote working, but it’s worth noting that many other large companies failed even though the majority of their employees worked from a desk.
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