Is Yahoo’s Ban on Telecommuting Brilliant or Blunder?

Yahoo’s recent decision to ban telecommuting has created quite a buzz.  Reactions have ranged from outrage to praise.  You could almost hear the huge sigh of relief expelled from managers worldwide who hate the concept of workers working from home and can’t give up the anachronistic style of management by walking around.  

Time will only tell if Marissa Mayer’s decision will lead to her induction into the CEO Hall of Fame or Den of Shame. (Remember former CEO “Chainsaw” Al Dunlap?) But as an outsider looking in, the decision is rife with pitfalls and consequences and lots of bad examples of how to communicate with your employees.

Like many other observers, I don’t have inside information to the discussions and strategies leading up to this decision. All I get is what I read in the news and on blogs. In that vein, let me first say that I believe the announcement was likely taken out of context and subsequent responses were exaggerated, often to fit personal agendas. Regardless, nearly everyone agrees that the impact at Yahoo will be significant. Whether that impact is good or bad remains to be seen.

Now let me move on to my take on this decision.

First and foremost and most curiously, if face-to-face interaction is so valuable and productive, why was a memo sent? Why wasn’t a meeting of managers called to announce, explain, and discuss the decision?  Why weren’t the people most affected by the decision contacted prior to any memo being circulated, confidential or not?

While creativity may be enhanced by face-to-face collaboration, the potential loss of key talent and acquisition of new talent comfortable with going to work each day may overwhelm any advantages gained by ending telecommuting.  Even if the strategy turns out to be the right one, the tone of the message was harsh and cold.  It read like a mandate, not a hard-to-swallow but necessary “Win One for the Gipper” rally the troops speech.

The decision was also interesting considering the new-Mom status of CEO Mayer. With 50 percent of the workforce now women, many working Moms and parent caregivers depend upon flexible, more compassionate, less autocratic leadership styles and work environments.  Many of the most successful recruitment and retention efforts succeed based on the flexibility that telecommuting offers.

Yahoo recruits mostly college grads.  Well over 60 percent of college students are female. It is even higher in many graduate programs.  This decision paints Yahoo as a non-worker-friendly, non-family, non-work-life-balance workplace. That image excludes an even larger demographic necessary for recruitment. I assume that message wasn’t the intent and consideration for the impact on women, young workers, and college grads was given adequate scrutiny. But if it was, the message certainly wasn’t communicated clearly.

In coming weeks and months, it will be interesting to watch overall employee engagement. Will incumbent employees react positively to this definitive decision or view this dramatic change in policy as a last act of desperation from the captain of a singing ship? Some observers have even intimated that voluntary downsizing – employees leaving the company in response to the policy – might be behind the decision.  This change could very well cause employees to quit before they are terminated, eliminating expensive severance packages and prolonged employment of disgruntled employees.

 I’m also curious to know what type of innovative breakthrough Mayer is looking for that might be gained by forcing employees to “work side-by-side.”  Few could argue with the comments by Yahoo EVP of People and Development Jackie Reses that “some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings.” If occupying the same space is a requirement for collaboration, does that mean that Yahoo will be consolidating their 20+ global offices in California and requiring all its employees to travel regularly or move closer?

Yahoo needs a big bodacious breakthrough and maybe on-site collaboration is the right catalyst to jumpstart innovation.   But employee performance and productivity must be aligned with a strategy.  What is Yahoo’s strategy? Better yet, what is its purpose, its unique proposition?  Who is Yahoo and what does it do?  If its goal is to be a better Google, Yahoo will lose. With three CEOs in a twelve month period, you have to ask – what is its business model?  Does it even have one? You can’t expect employees to meet expectations if the only goal is inflating its stock price. If Mayer is looking for its workers to come up with the next great idea to save the company, banning telecommuting has as much chance of succeeding as rearranging the deck chairs on the Titanic.

Reses’ memo continues, “speed and quality are often sacrificed when we work from home.”  Maybe that’s true in some roles.  But imposing this policy for all types of work just doesn’t make good business sense. It also flies in the face of recent studies on the value of telecommuting. In 2012, the Bureau of Labor Statistics conducted a survey concluding that telecommuting has “become instrumental in the general expansion of work hours, facilitating workers needs for additional work time beyond the standard workweek, and/or the ability of employers to increase or intensify work demands on their salaried employees.”

While creativity and innovation may flourish when engineers and marketing people interact face-to-face, a no-telecommuting policy may have a negative impact on more functional jobs like finance and accounting. It might reduce productivity and performance by lowering morale and limiting the pool of talent that the company attracts and retains.

Yahoo’s decision to ban telecommuting offers many valuable lessons for companies considering a significant policy change.  What do you feel are the most valuable take-aways for CEOs and HR when making significant employee policy changes?


Ira S Wolfe