For this piece, I teamed up with my friend and former co-worker, Kat Orekhova. Kat is the CEO of Vareto and invests with Evening Fund. I consider her to be one of the most interesting thinkers on the future of work and organizations. We decided to work together to discuss trends we were seeing in startups and DAOs. I hope you enjoy it.
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The Future Came Faster Than Expected
On March 11, 2020, Twitter announced that it was closing its offices and that employees would be required to work from home until further notice. Within 48 hours, the rest of Silicon Valley went through the five stages of grief, and finally arrived at “acceptance.” Everyone in the Bay Area, and soon workers around the country, found themselves working from home. As weeks passed, it became clearer and clearer that COVID would become “the new normal” and that new normal meant opportunity.
Venture capital firms pounced. The long prophesied “Future of Work” was coming ten years early. Startups for teams and events became all the rage. New tools promised to keep teams in sync! Or to provide all the benefits of in-person culture over a new chat app! The gold rush was in full effect.
Two years later, we can see that the VCs were right about one thing: the future of work arrived in a big way. Teams are remote first. The talent vortex of Silicon Valley has gone global. But on other, more important, counts – we got it wrong. Slack is great. Zoom is great. But we did not have a tooling problem. We had a “people problem.”
Spurred by the pandemic, people have rethought their relationship with work and their relationship with their colleagues. If organizations want to retain and support their employees, they need to rethink their relationship with the people of their company. The future of work is not about tools. It’s about people.
Here are 3 lessons about the real future of work that we’re seeing up close:
1/ Career paths are changing. People want to do briefer stints with more emphasis on personal satisfaction and learning opportunities. Tech companies who embrace this will have a competitive advantage.
The “Great Resignation” might be better termed, “The Great Reshuffle.” People in tech are still interested in working, but they are switching roles with greater frequency and higher intention than ever before.
Gone are the days when people would join a company and get a pension after staying there for 20 years. Nowadays, it’s more common to see resumes with 2-3 years experience at each company, and the average tenure continues to decline.
Employers have generally resisted this change by focusing on increasing retention. For example, it’s become common during the past decade for managers to offer “support” to their team members by encouraging them to take time-off to restore their mental health, prevent burnout, and ensure their ability to stick it out in their current job for years to come.
But in most cases, burnout is not characterized by being physically tired but is instead closer to emotional exhaustion. When we are burned out, we lose a sense of accomplishment and meaning. We become cynical and critical. Ultimately, we stop caring about our work and we resent being forced to act like we care. But the solution isn’t just more sleep or a week on the beach. The solution is real, meaningful change to the type of work that we are doing and the way that we are doing that work. And that often means a job change.
As Professor Wrzesniewski puts it, we need to do some “job crafting”— the act of redesigning the specific work you do to match your personal strengths and values and thus amplify the sense of meaning you get from your job. And we need to do this not once, but on a regular basis.
It’s not just philosophical: people are taking action. They aren’t satisfied with staying in a burnout job situation, no matter how high the pay. They want to explore new opportunities and new experiences. No wonder over 20% of tech workers left their jobs in 2021.
Employers need to stop fighting this shift. Rather than thinking about “fighting churn,” or retaining employees for as long as possible, they should start equipping themselves to welcome a more fluid labor force. Companies that are able to embrace this change will have a competitive advantage in the hiring market and increased productivity of their workforce. To do this, companies will need to think differently about developing and supporting their employees.
They might be wise to consider the model of consulting firms like McKinsey. McKinsey invests heavily in its analysts and associates while expecting many to move on to other firms after 2-3 years. But, by ensuring that these employees develop skills and have a great experience with the firm, many McKinsey alumni later become clients, channel partners, or return back to the firm. This focus on long-term investment will become critical for companies.
Another example to look at is Rippling, which intentionally (acqui)hires founders (50+ to date) and crafts jobs that give them autonomy over specific projects and product lines. By creating roles that utilize their entrepreneurial strengths and play to their interests, Rippling is able to acquire amazing talent in bulk. Rippling expects most of these folks to leave in 2-3 years (likely to start another company), but surprisingly a number have stayed because “they enjoy both the financial security and the autonomy that they cherish." Details.
[A step even further afield comes from Decentralized Autonomous Organizations in the cryptocurrency space. These organizations, like Gnosis, have no pretense of scaling themselves. Instead, they use their treasuries to incubate and spin out new projects. This allows them to harness and benefit from the energy of fully engaged founders whose incentives are structured to align with the investing company’s vision. ]
Looking ahead, tech companies need to get comfortable hiring people who only intend to work in that role for 1-2 years rather than become a “lifer”, and then proactively helping them find their next gig, whether it’s internal or external. It means supporting their career growth by ensuring they are working on projects that help them gain new skills and experiences. Forward-thinking startups like Vareto go even further by offering leadership and strategic communication coaching to all employees, a benefit historically offered only to executives at established companies.
Companies that successfully do this will reap the rewards. First, while retention is declining on a macro level, it will be better at these companies relative to the market as a whole. Second, company culture will be better, leading people to be more willing to give that little bit of extra effort to make their work great.
2/ The shift to international, distributed teams means resumes matter less and portfolios matter more.
The continuing debate over whether New York, Austin or Miami can lay claim to being the “next Silicon Valley” obscures the real shifting dynamics of the market – physical location is no longer the relevant factor in building teams. This shift means that the market for talent has suddenly become global.
As a result, the structure of the market has also changed. Previously, hiring managers were primarily searching in a single location and were hence able to leverage signals such as target schools and stamps from large, successful firms. Now that hiring is expanding internationally, this model no longer works. Most US recruiters and hiring managers, for example, do not know the best computer science programs in Armenia, Nigeria, or Indonesia. As a result, they can’t use credential shortcuts and must instead put more emphasis on competency evaluation and demonstrated impact in prior roles.
Employees of all skill-sets – not just designers – will cultivate portfolios that display their talents and past projects directly. Many engineers already do this through working on open source or side projects. Data scientists are doing it by including GitHub links or Medium articles with their resumes. Especially in our current hyper-competitive hiring market, companies would do well to restructure their recruiting to seek out talent that has demonstrated competency. These potential hires have already displayed a predilection for building that sets them apart from their more traditionally credentialed peers.
As traditional gatekeeping like “target schools” begins to disappear, employers will need ways to assess competency at scale. Startups such as Byteboard are building tools to support asynchronous, “real world” interviews. In the web3 space, projects like Rabbithole pair education with competency certification for potential employers. The road will be bumpy, but ultimately, we believe this shift in the hiring landscape will lead to a more fair and more meritocratic labor market.
But a word of warning: if tech companies are hoping to benefit from cost-savings from hiring employees in other countries, they are in for a surprise. While we’re still years away from compensation parity across borders, early evidence shows that rates are rising quickly for top talent in many geographies, outpacing even the recent inflation and general 9% increase in engineering salaries in the US since the start of 2020.
3/ To be most effective in a remote-work environment, the best tech companies are crafting culture explicitly rather than letting it be defined implicitly.
With remote, distributed work becoming more common, leaders are no longer in their corner offices or dedicated conference rooms flanked by their lieutenants. It’s hard to be intimidated by a CEO whose toddler or puppy keeps interrupting their calls. When we can see beyond the curtain, it turns out we’re all just human.
Traditional, social markers of power are being phased out. For example, taller people are no longer able to leverage their physical presence to command a room. And people who had previously dressed to the nines to maintain their power status are relieved to skip the uncomfortable shoes and make-up, and just use Zoom’s “touch up” feature instead. Indeed, Zoom has become the great equalizer.
While research suggests that video calls can amplify the challenges women face in the workplace by prioritizing outspoken men that are comfortable with dominating a conversation, the shift toward remote work also means increased use of asynchronous communication tools such as Slack and Notion. There is early evidence that this might help invert traditional power structures by giving everyone greater opportunity to express ideas, while also providing a record of who said what and when. Having an audit trail makes it easy to give credit where it’s due and hold people accountable when their behavior falls short of expectations.
With companies going remote, culture is no longer driven purely from the top, nor is it implicitly revealed in water cooler moments in the office.
When your entire company is in the same physical space, you sense the vibe and you notice things such as impromptu chats by the desks, the number of people wearing company swag, and how one of the teams celebrates a launch moment with cake and champagne. You have not been explicitly invited to these “events,” yet by virtue of just being present in the office, these peripheral sights and sounds tell you something about the company culture.
With meetings now happening over Zoom, our peripheral vision is much narrower. We are either in the Zoom meeting or we aren’t. In fact, when people join a remote-first company and show up for day 1, they have no frame of reference for how they should act around others. The company must invite them into the right virtual spaces (Zoom meetings, Slack channels, etc.) and be clear about which spaces are meant for “work” and which are there for “social bonding.” When done right, company values will then dictate how people act in these virtual spaces: how they communicate, disagree, make decisions, celebrate wins, take time off, and just about every other aspect of working together.
Some people resent this move towards remote work, and indeed, there are many challenges. Zoom just doesn’t match the signal density of physical interaction.
This problem is further compounded in DAOs where a cultural tendency toward anonymity makes it even more challenging to read cultural cues. Who is this stranger with a pixel-art NFT profile picture that I am trusting to build our core infrastructure? How do I interact with them?
And even for those who prefer remote work because they appreciate skipping the daily commute, there is often frustration at the extra documentation and thoughtfulness that remote work requires. It feels like extra effort to have to decide how many hours they’ll dedicate to “social” meetings versus “get-stuff-done” meetings. Or deciding how best to organize slack channels for optimized communication.
It’s true: being intentional about how time is spent and how we communicate is inherently more work. But the evidence suggests that, for many teams, this leads to greater productivity, reduced bias, and overall better work environments.
The future has its challenges, but it is undoubtedly bright.
What do you think?
We’d love to hear your thoughts on the Future of Work.
Loved reading this piece! Thank you