- According to Upwork CEO Stephane Kasriel, the shift to remote work in America needs to happen faster or there will be 'a major crisis.'
- Kasriel says the most talented professionals won't be willing to work traditional 9-to-5 job hours, and companies need to get on board.
- The number of US freelancers who found projects online increased 22 points in the past five years — from 42 percent in 2014 to 64 percent in 2018, according to Freelancing in America.
The freelance marketplace is exploding, as more companies seek to hire freelancers as a way to snag the best talent. Yet many companies still hold strong to the traditional 9-to-5 workday. According to Upwork CEO Stephane Kasriel, remote work will be the norm within the next 10 years, as younger generations take the management reins.
"Millennials will be the next CEOs and CXOs. Gen Z is going to take all of this as a natural way of working. They are flexible work natives. ... Younger generations will see the trade-offs in quality of life and think traditional models are ridiculous," says Kasriel, whose company recently IPO'ed at a valuation of around $2 billion.
CNBC recently spoke with Kasriel about the factors that are fueling remote work globally, when he believes companies will finally embrace this new work model and what the consequences will be if they don't.
How do you rate the momentum of the shift to remote work in America? For example, is it shifting faster or slower than you expected?
The shift to remote work in America needs to happen faster. You only have to look at the Amazon HQ2 debacle to see there's still too much fixation on and glorification of in-person, mega-corporate work. This is unsustainable and, if it persists, will lead to a major crisis.
More organizations should be built remote-first or at least move toward allowing remote work and policies that support it. Employees are pushing companies to break down time-and-place work barriers that are relics of the Industrial Era. Companies are also learning that, at a time when there are a record number of job openings, remote work helps hire by opening up access to more talent. Plus, it increases productivity, per a recent Stanford study.
Companies that aren't open to remote work need to change. Democracy is going to be really challenged if a remote-first organizational mentality doesn't happen in the next 10 years. You can't have a world in which 90 percent of a country is struggling because there aren't jobs where they are. Nor can you have a world in which people all have to move to where the jobs are. That's why responsible leaders should get ahead of the remote work trend. There's been gradual increasing pain, but there will be a major crisis. It's just a matter of time. And the companies that wake up first will be the ones left standing.
What is the largest factor that is fueling remote work globally?
As a World Economic Forum member and recent co-chair of the Future Council on Education, Gender and Work, I have the honor of participating in conversations about what the WEF calls the Fourth Industrial Revolution. The first two revolutions were about mass production. The third turned us into knowledge workers bound in offices. This revolution is about breaking free of geography. It is being driven by the technology to help us do that.
Fourth industrial revolution change is coming from both sides: People want better lifestyles, and businesses are in hiring pain.
People know that place-bound work no longer makes sense. Collaboration technologies, like Microsoft's Office 365, Slack, Google Hangouts and Atlassian, along with the ability to find work online via sites like ours, make it possible to work anywhere. The number of U.S. freelancers who found projects online increased 22 points in the past five years — from 42 percent in 2014 to 64 percent in 2018.
While technology is the main enabler, another major force is hiring pain and huge talent shortages. The most talented professionals are increasingly used to being able to call the shots and shape their lives as they want to live them rather than as traditional 9-to-5 work requires. This means companies who want access to them need to allow remote work.
What is your view on Yahoo, Bank of America, Aetna and IBM eliminating their work-from-home policy?
These remote-work policy reversals are extremely shortsighted. Forcing workers back into offices is archaic and a great way to lower the quality of your team. Top professionals will not trade the way they want to live to fit a company's policy. They will find new work with companies more open to remote work. The team members who are less motivated, lower performers are more likely to stay.
Companies that revoke remote work privileges not only risk talent loss, they signal that they are not a fit for future top talent, especially among younger generations coming of age at a time when flexible work is an option they're well aware of.
Reversing remote work policies is also the wrong thing for America. Big companies have social responsibilities. With so many areas of our country struggling, it's backward-looking for companies to make decisions that take away jobs from regions that need them most. That is exactly what these remote-work reversals do.
You had mentioned that the concept of the workplace is "dead," yet organizations in this country haven't changed how they operate inside their four walls since Henry Ford created the 9-to-5 workday. Why are they so slow to change?
This brings to my mind the fable of the boiling frog. If a frog is suddenly put into boiling water, it will jump out. It senses danger immediately and takes action to save itself. But if a frog is put into water that is slowly brought up to a boil, it will perish because the change is so gradual, the frog doesn't perceive danger until it's too late.
This is the situation we are in with organizational change. Without having reached a boiling point, it's easier for companies to do more of the same than to revisit their assumptions. So they keep conducting painful searches to find people who can drive into their offices and sit, unnecessarily, bound by four walls. Meanwhile, local costs of living are going up. Commutes are increasingly painful. And every year, things keep getting a little bit worse. But because there hasn't been a major crisis, organizations having trouble finding the people complain but don't jump into action. Just because something is gradual does not mean it's okay not to rethink it. People need to wake up.
When do you think companies across America will finally embrace this change?
Within the next 10 to 15 years, because of generational shift. Millennials will be the next CEOs and CXOs. Gen Z is going to take all of this as a natural way of working. They are flexible work natives. Many baby boomers will be out of the workforce, and Gen X will be starting to move out as well. Younger generations will see the trade-offs in quality of life and think traditional models are ridiculous. This is similar to how digital natives changed the way we use technology. As younger generations take management reins, remote-work and flexible-work models will just be the norm to them. They'll hire more remote people and empower their teams to work that way. Research points in this direction, too. Five times more hiring managers expect more of their team to work remotely in the next 10 years than expect less.
What type of companies do you see getting disrupted if they don't soon embrace remote work?
Fortune 500s are seen as somewhat invincible — they're far from it. When the F500 list first came out in 1955, they had an average lifespan of 75 years. The average lifespan of an F500 company today is less than one third that — 15 years. Only 12 percent of the original F500s remain on today's list. It's easier for smaller, younger companies to evolve so it's even more critical for F500s to embrace remote work if they want to prolong their lifespan.
Agencies and traditional staffing firms are also ripe for disruption. Companies that hire via online marketplaces or build flexible remote teams can access the same quality talent at much faster speeds and usually with lower overall costs than they'd get via these traditional sources since they're going direct to the talent. The majority (90%) of hiring managers are open to working with freelancers rather than through a staffing firm, according to Future Workforce Report. Staffing firms that evolve will do better than the ones avoiding change and agencies themselves can move online to create a more distributed model.
What are some tips you could offer giant companies about how to best manage a remote workforce?
The single most effective change a company can make is to take a remote-friendly approach. Don't just tolerate remote team members as add-ons. Assume everyone is or may be remote at any time. Kill conference calls. Prefer video calls. And on video calls, allow the remote folks to interrupt.
One extreme is to ask the local folks to also take the video call from their desks rather than a conference room, this way everyone gets the same remote experience. Every company should support its most productive workers in living where they want. If you need a place to start, start with your most proven people who have the strongest voice in the company so that they can help effect further change.
You should also train your managers on remote team management. It will be the key management skill of the 21st century. Create consistency with communication and context setting. Establish processes and support tools for remote teams. And rely on collaborative technology but invest in in person time still, which will always be important.
You joined Upwork, formerly oDesk, in 2012. That was a big leap for you after PayPal. Had you already started seeing the shift toward remote work back then?
I've had to move a lot in my life. Moving is a major change and forces trade-off decisions. oDesk's vision to free work from geographic boundaries resonated deeply with me when I heard there was an opportunity to join. I reflected on the fact that I had moved twice from Paris to California for job opportunities (and the second time, with a family, which is even more challenging), when the jobs that I was hired for could really be done from anywhere. It struck me that most people would not be willing to physically move to another location, and as a result, great talent was being underutilized everywhere, while at the same time great companies were struggling to find talent locally. I saw that eventually more and more work would be done remotely as technology was clearly evolving to make it possible.
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