Was remote work to blame for Silicon Valley Bank collapse?
From risky investments to lack of regulatory oversight, the collapse of Silicon Valley Bank was attributed to any number of factors. Now add remote work to the blame game.
“When Silicon Valley Bank imploded, most of its 8,500 staff were still working remotely,” The Financial Times reported, emphasizing the institution’s “total embrace” of WFH. “Some people worked from Miami, some moved to Las Vegas or a cabin in the woods and did the digital nomad thing,” a former banker told the paper, which noted that the CEO worked at times from Hawaii, while other executives of the California-based bank were based in New York, Florida and Washington, D.C.
It’s not the first time remote work has been blamed for everything from a decline in employee productivity to mass layoffs to the economic slowdown. In an interview with Fox News, BlackRock CEO Larry Fink even suggested that WFH was responsible for inflation — despite evidence that it has actually decreased it.
“Remote work tends to reveal a lot of problems that already existed,” said Robert Longley, a Massachusetts-based corporate consultant who specializes in remote work trends. “It’s much more convenient to blame something like remote work than taking responsibility for risky business practices in general.”
Longley pointed to data linking the return to the office to a plunge in worker productivity, versus companies such as PwC that went all in on WFH that are “quietly watching from the sidelines as the competition flounders. Remote work is not a problem — bad policies around remote work are the problem.”
Calling SVB’s remote work policy “a convenient target,” Otto Berkes, CEO of Arlington, Virginia-based recruitment and training service HireRoad, offered that “bad planning can happen whether or not people are physically together. The real question is whether people were asking the right questions and having the needed discussions — in person or otherwise.”
As Doug Dennerline, CEO of California-based performance management software firm Betterworks, said of SVB’s collapse: “This was not a remote work problem — it was a failure to bring employees together in meaningful and transparent ways that built up over time.” He added, “Communication and alignment with managers and teammates is no doubt tougher in a remote work environment, but without the right tools to support conversations, constructive feedback and goal setting, it’s impossible to build a connected culture.”
Companies with a remote work arrangement are not “less-than,” he emphasized, nor should they be considered part of a so-called “start-up culture.”
“The idea that remote work makes it harder to challenge management should reflect more upon the organization’s manager-employee relationships than the office or lack thereof,” he said.
Yet, as the pandemic wanes, many employers continue to push for a return to the office, seeing remote setups as a necessary evil during the thick of Covid but an idea that’s on its way out.
Sara Causey, a staffing and recruiting consultant based in Oklahoma, believes WFH will continue to be the fall guy for struggling businesses — and an excuse for making employees come back to the office. She said she has experienced “tremendous resistance from employers if you so much as hint that opening up a role for remote work would be a good choice,” adding, “At the risk of sounding pessimistic, I think as layoffs continue and unemployment rises, employers will feel emboldened to demand RTO. Some companies will stay hybrid or WFH, but I believe a majority of roles will be pushed back to the office for in-person work.”
Asker Ahmed, founder and director of iProcess Global Research in Dallas, which provides biospecimens to medical and pharmaceutical researchers, noted that not all businesses are designed for long-term remote work. “Companies have to be strategic about positions that can be remote and the levels of productivity for these positions,” he said. “When companies identify remote work as a risk, it may be time to reevaluate the structure.”
Businesses facing hard times are sure to see a remote workforce as a contributing factor, in turn leading other companies to reconsider their own WFH policies, he said. That, he predicted, will lead to eventual shift toward more hybrid or fully in-office arrangements in the coming months.
Harman Singh, director at Cyphere, a U.K.-based cybersecurity services firm, also acknowledges the downside in remote work, calling it “a necessary tool for so many businesses in order for them to remain competitive and successful” but one that “comes with risks.” Potential pitfalls include communication issues and lack of collaboration, he noted.
Still, such issues are ultimately on management to resolve, he stressed. “Remote work cannot be a scapegoat for every struggling or failing business.”