[Special Feature: Working in the Post-Office Era] Challenges and Responses to Telework in Small and Medium-sized Enterprises

2020/12/07

As a Labor and Social Security Attorney, the author provides advice to small and medium-sized enterprises (SMEs) in the fields of management and human resources/labor relations. In the course of receiving various consultations, the number of inquiries regarding telework has surged since the spread of the COVID-19 pandemic.

Based on such consultations, this article examines the future of telework as a way of working, the challenges SMEs face, and how they should respond, particularly with comparisons to large corporations in mind.

According to a survey by the Ministry of Internal Affairs and Communications, the telework adoption rate was 9.9% in 2011, but it has increased annually, reaching 20.2% in 2019 (Figure 1). Furthermore, the impact of the COVID-19 pandemic led to a sudden increase in the number of companies adopting it. While simple comparisons are difficult due to different populations, a survey by Tokyo Shoko Research, Ltd. showed that at one point, 57.8% of all companies ("Currently implementing" + "Implemented after COVID-19 but since discontinued") practiced telework. Even after the state of emergency was lifted, 31% of companies continued to do so (Figure 2).

However, there is a significant gap based on company size. While up to 84.9% of companies with capital of 100 million yen or more implemented telework, the rate was 52.4% for companies with capital of less than 100 million yen.

Additionally, after the state of emergency was lifted, some companies partially discontinued telework or reduced the number of days it was implemented. Since half of SMEs have discontinued telework and returned to pre-COVID normal working conditions, it can be said that the hurdles for telework in SMEs are relatively high.

Next, let us consider the future of telework and work-style reform.

We are currently experiencing an unprecedented lifestyle due to COVID-19. For example, with the introduction of telework, many people likely feel that the commute on crowded trains and long hours at the office—which were previously taken for granted—have disappeared, and the time spent at home with family has increased.

Such changes in lifestyle bring about changes in individual values, particularly regarding work. For instance, if the relationship was previously "I exist because of the company and work," this major change has led to questions. Perhaps "the company and work exist because of me." The number of people holding such questions is steadily increasing.

Regarding telework, according to the NIRA Institute for Policy Studies' "2nd Survey Report on the Actual Conditions of Workers Regarding Telework" conducted in June this year, 46% of people want to practice telework after the COVID-19 pandemic ends, and 80% of those currently using telework answered that they want to continue it.

In this way, even people who did not previously relate to the term "work-style reform" are beginning to think of it as a personal matter by actually experiencing changes in their lives. As a result, work-style reform is expected to progress significantly in the future, triggered by COVID-19.

Companies that introduced telework triggered by the COVID-19 pandemic did so specifically for BCP (Business Continuity Planning). However, other benefits of telework include "improved productivity," "enhanced work-life balance," and "reduction in turnover due to childcare or nursing care."

Regarding "improved productivity," efficiency can be achieved by allowing sales staff to go directly to and from customer sites or by eliminating the need for business trips for meetings. Additionally, in the process of introducing telework, improvements in operational efficiency can be expected by reviewing business processes, such as going paperless and simplifying approval processes. Furthermore, "work-life balance is enhanced" by eliminating commuting time and enabling flexible working styles. "Reduction in turnover due to childcare or nursing care" is also achieved as telework makes it easier to perform these duties while working from home, leading to the prevention of resignations.

Thus, telework itself can be described as a measure that benefits both the company and the employees.

As mentioned above, great effects can be expected from telework, but several challenges have been identified for its introduction.

According to a survey conducted by the Tokyo Chamber of Commerce and Industry (Figure 3), excluding "no tasks suitable for telework," the top challenges when considering implementation are "internal systems are not in place (work management, labor management, evaluation, etc.)" and "insufficient equipment such as PCs, smartphones, and network environments (LAN, etc.)." Furthermore, "not knowing how to proceed" implies a lack of IT specialists to guide the process. If we consider this the same challenge as "no personnel with IT knowledge," it is noteworthy that while a total of 16.5% of companies with fewer than 50 employees cited this as a challenge, 0% of companies with 300 or more employees did so.

1. Working Hour Management

As part of "internal systems," the challenges often pointed out regarding telework are "working hour management" and "personnel evaluation."

Regarding working hour management, I am sometimes asked how to manage the working hours of employees who are not right in front of me. It is understandable to feel anxious about management since employees are not actually in the office, and management can become complex when considering working styles unique to telework, such as temporary interruptions for childcare or nursing care.

However, even in telework, working hour management is essentially indispensable. As a countermeasure, the use of email, telephone, and attendance management tools can be considered as management methods. If there are few employees, they can report to their supervisors via email or phone at the start and end of work; if the number of employees exceeds a certain level, attendance management tools can be used. By establishing rules or introducing management tools, working hour management is entirely possible.

However, even if such time management tools and rules are introduced, I hear voices of concern about whether employees are working without slacking off since they are not in the same space. To those voices, I would say that no matter how much you manage them, employees who slack off will slack off. This is the same whether they are teleworking or in the office. Strengthening management further will only lead to them finding new loopholes to slack off. Rather than worrying about that, it is fundamentally necessary to trust subordinates and employees—to stand on the principle that people are basically good. Trusting employees is a prerequisite that is particularly important for telework.

2. Personnel Evaluation

I also hear voices saying, "If employees are not in front of me, I cannot see their work performance and therefore cannot evaluate them." I respond to such managers by asking, "What can you evaluate when they are in front of you that you cannot evaluate when they are not?"

To begin with, many SMEs do not have formal evaluation systems. In such companies, the president often makes comprehensive judgments (!) for evaluation, and there are frequently no rules or established procedures. While a sophisticated HR system like those in large corporations is not necessarily required, it is important to clarify what should be evaluated when work is not face-to-face, as in telework.

By having a common understanding between the evaluator and the evaluatee regarding what is required and what kind of work is expected, evaluation becomes possible even without face-to-face contact, and employees can work with peace of mind.

3. Cost

Next, many SME managers cite a lack of funds as a challenge, such as "insufficient equipment like PCs and smartphones or network environments," "insufficient software like cloud services," and "difficulty bearing the cost of introduction." For SMEs, which generally do not have sufficient financial resources compared to large corporations, it is understandable to view investment in equipment and software for telework as a burden.

However, there are quite inexpensive and high-performance PCs and software, and subsidy systems have become more robust due to the COVID-19 pandemic. Furthermore, rather than replacing everything with telework from the start, it is possible to avoid spending all the costs at once by proceeding within a possible range starting from tasks that can be done remotely. In this way, it should be possible to introduce it without incurring significant costs.

4. Shortage of Human Resources

As mentioned earlier, 16.5% of companies with fewer than 50 employees pointed to a shortage of human resources, stating they "do not know how to proceed" or "have no personnel with IT knowledge." In contrast, not a single company with 300 or more employees cited this as a challenge, showing that the smaller the company size, the more challenges they face regarding IT specialists.

It is certainly difficult for small companies to hire IT specialists. However, it is possible to consult with experts without hiring them directly. For example, by using the Ministry of Health, Labour and Welfare's Telework Consultation Center or the Ministry of Internal Affairs and Communications' Telework Manager Consultation Project, one can receive free consulting and information.

What must be avoided is a situation where, due to the lack of IT personnel, managers do not sufficiently consider the introduction of telework, and it is never implemented. Unless IT is their core business, not many SME managers are well-versed in IT. Even when I explain the necessity of telework and the IT required for its introduction to the presidents of companies I support, some do not quite grasp it. It would be fine if they at least thought to consult externally, but if they do not realize that, no consideration will be given at all. In that sense, the manager's level of IT literacy is also important.

As described, there are many challenges to introducing telework in SMEs, and the hurdles are relatively high compared to large corporations.

However, it is not impossible to introduce, and I believe that by implementing countermeasures for each challenge, the introduction of telework is entirely possible. There are also subsidies that can be utilized for this purpose.

Furthermore, an easy way to approach implementation is to start from where it is possible, such as tasks suitable for telework or the number of days telework is possible, and gradually expand. For example, rather than saying telework cannot be introduced because going paperless is necessary but hasn't been achieved, one should work on going paperless in parallel while practicing telework.

It goes without saying that many SMEs are currently facing great hardships due to the COVID-19 pandemic. However, I believe that people and companies can learn from any event and can progress even during times like these. By introducing telework, it is possible to strengthen the corporate structure through improved productivity, prevention of resignations, and recruitment of excellent talent. Furthermore, considering the future progress of work-style reform, it is necessary for even SMEs to respond.

I hope that SMEs will take this as an opportunity for growth and work on what they can do, so that after the COVID-19 pandemic has subsided, they can say that although they struggled greatly, their corporate structure became stronger in the process.

NIRA Institute for Policy Studies, "2nd Survey Report on the Actual Conditions of Workers Regarding Telework"