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

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 how the telework style of working will evolve in the future, what challenges SMEs face, and how they should respond, particularly keeping in mind a comparison with large corporations.

According to a survey by the Ministry of Internal Affairs and Communications, the telework adoption rate was 9.9% in 2011 (Heisei 23), but it increased year by year to reach 20.2% in 2019 (Reiwa 1) (Figure 1). Furthermore, due to the impact of the COVID-19 pandemic, the number of companies adopting it increased sharply. Although simple comparisons cannot be made due to different populations, a survey by Tokyo Shoko Research, Ltd. shows that at one point, 57.8% of all companies ("Currently implementing" + "Implemented after COVID-19 but since discontinued") practiced telework, and even after the state of emergency was lifted, 31% of companies continue to do so (Figure 2).

However, there is a large gap depending on company size; while up to 84.9% of companies with capital of 100 million yen or more were implementing it, the rate was 52.4% for companies with less than 100 million yen.

Additionally, after the lifting of the state of emergency, some companies have discontinued telework or reduced the number of days it is practiced. Since half of SMEs have stopped telework and returned to the normal pre-COVID working style, 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 way of life due to COVID-19. For example, with the introduction of telework, many people likely find that the crowded train commutes 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, especially values regarding work. For instance, if the relationship was previously "I exist because of the company and work," questions are arising in response to this major shift. People are wondering if, in reality, the company and work exist because of the individual. The number of people holding such questions is steadily increasing.

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

In this way, even people who did not quite relate to the term "work-style reform" before 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, and 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 childcare or nursing care 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 pointed out 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 for 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 not knowing the method due to a lack of specialized IT personnel. If we consider this the same challenge as "no personnel with IT expertise," it is noteworthy that while companies with fewer than 50 employees cited this as a challenge at a total of 16.5%, it was 0% for companies with 300 or more employees.

1. Working Hours Management

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

Regarding working hours management, I sometimes receive questions about how to manage the working hours of employees who are not right in front of me. It is understandable to feel uneasy 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, management of working hours is essentially indispensable. As a countermeasure, the use of email, telephone, and attendance management tools can be considered as methods for managing working hours. 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 certain rules or introducing management tools, it can be said that working hours management is fully possible.

However, even if such time management tools and rules are introduced, I hear voices expressing concern about whether employees are working without slacking off since they are not in the same space. To those voices, I would venture to say that employees who slack off will do so no matter how much they are managed. 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 premise that people are basically good. Trusting employees is particularly important as a prerequisite 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." To such managers, I always ask back: "What can you evaluate when they are in front of you that you cannot evaluate when they are not?"

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

By having a common understanding between the evaluator and the person being evaluated regarding what is required and what kind of work is expected, evaluation becomes possible even without being face-to-face, 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 and network environments," "insufficient preparation of software such as cloud services," and "difficulty in bearing the costs for introduction." For SMEs, which generally cannot be said to be sufficient in terms of funding compared to large corporations, it is understandable to consider investment in equipment and software for implementing telework as a burden.

However, there are quite inexpensive and high-performance PCs and software available, and subsidy systems have become more substantial following this COVID-19 crisis. Furthermore, rather than replacing everything with telework from the start, it is possible to avoid spending all the costs at once by proceeding with tasks that can be done within a possible range. 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 expertise." 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 specialized IT personnel.

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

What should be avoided is a situation where, because there are no IT personnel, the manager does 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 get 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 understanding is also important.

As described, there are more than a few 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 if countermeasures are implemented for each challenge, the introduction of telework is fully possible. There are also subsidies that can be utilized for this purpose.

Furthermore, an easy way to approach introduction is to start from where it is possible and within a feasible range—such as tasks that can be teleworked or the number of days telework is possible—and gradually expand. For example, rather than saying telework cannot be introduced because paperless operations are necessary but not yet achieved, one should work on going paperless in parallel while implementing 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 turnover, and recruitment of excellent human resources. Furthermore, considering the future progress of work-style reform, it is necessary for even SMEs to respond.

I hope that after the COVID-19 pandemic has subsided, SMEs will view this as an opportunity for growth and work on what they can do, so they can say they struggled a lot but their corporate structure became stronger during that time.

NIRA Institute "2nd Survey Report on the Actual Conditions of Workers Regarding Teleworking"