So much has changed in our lives over the past year as a result of Covid-19. One area to experience many changes has been the work environment.

“For the first time many of us were forced to work from home, which proved to be challenging for employees and employers alike,” says Helene Vermaak, Business Director at corporate cultural experts The Human Edge.

There is no doubt that by living through this pandemic we are forming part of many trials that we will hear about for years to come and hopefully learn from too. She says that one of these is the social experiment: what is the impact of a work-from-home (WFH) workforce on measures of corporate health like culture, engagement, morale, etc.?

The Human Edge’s US partner, VitalSmarts, recently conducted a study with 212 senior leaders and 2,037 front-line employees. The study has revealed that leaders who have ignored the potential impacts of WFH have put their organisations at substantial risk.

On the other hand, commitment, engagement, and teamwork are stronger than ever in organisations where leaders are proactively engaging employees in spite of WFH.  Vermaak says, “These results are not surprising and we are seeing the same trend in South Africa.”

The study shows that organisations where leadership has done little to address the new WFH dynamic are at risk of:

  • Employee turnover
  • Sinking productivity
  • Weakened employee commitment and connection
  • Strained team performance and teamwork
  • Lower employee engagement and morale
  • Weakened employee/manager relationships

When it comes to overall culture health the study revealed that employees in organisations where leaders have done nothing to improve or preserve the culture, are 200% more likely to report feeling substantially less committed to the organisation.

But the greatest cost of inaction is to social capital – a measure of people’s willingness and ability to work together to get things done. According to the study, social capital is deteriorating greatly in organisations where leaders have taken no action to preserve the culture. In other words, employees in these organisations are much less likely to respond quickly to colleagues’ needs, suspect one another’s motives, focus on their own narrow interests and do as little as possible to avoid being fired.

The data also revealed some positive findings with regards to WFH – leaders who are implementing simple culture interventions are avoiding the hidden costs of WFH and even seeing a culture and commitment boost. Simple interventions like the below are helping employees to feel more committed since having to WFH:

  • Offering virtual training (at least as consistently as was offered prior to COVID)
  • Implementing new tools and technology to facilitate connection
  • Providing counselling or psychological services
  • Fun, off-the-wall, virtual events (such as – virtual dance parties, online cooking contests, etc.)
  • Ask for input on needs in company-wide and one-on-one meetings
  • Changing of work hours or implementing a flexi-time policy
  • Keeping business meetings focused, scheduled appropriately and with clear action and follow-up steps
  • Scheduling non work-related meetings for team members to connect

A key finding of the study is that leadership matters more than location. If leaders invest in increasing social capital, they can largely offset the cultural downsides of WFH.  Where leaders proactively build a sense of connection during WFH the study found that social capital is substantially higher:

  • Employees are 60% more likely to respond quickly to requests from each other
  • Employees are nearly three times more likely to give one another the benefit of the doubt rather than taking offense
  • They are nearly three times more likely to sacrifice their own needs to serve a larger team goal
  • And are, over twice as likely to take initiative to solve problems rather than waiting to be told

Joseph Grenny, co-founder of VitalSmarts, says this study provides both a warning and a roadmap for leaders trying to navigate a new WFH landscape. “For decades, studies of corporate culture have concluded that the further two people were apart physically, the lower their estimation of one another was likely to be,” says Grenny. “These latest findings suggest otherwise—distance isn’t destiny. At the end of the day, the necessary condition to a productive social system is leadership not location. The forced WFH experiment of 2020 suggests it is possible for leaders to create strong social capital without physical proximity and doing so is absolutely vital.”