Allstate has about 57,000 employees and 82% of those in the US work remotely. The insurance company sold its sprawling Illinois headquarters last year and shed half of its office real estate overall, saving hundreds of millions of dollars annually.
At a time when many executives are frustrated that employees aren’t spending more time in the office, Allstate CEO Tom Wilson says the remote arrangement is working well for his company. “We decided to jump into the water and see where it goes,” he said during a session at the recent Aspen Ideas Festival. “Our employees decided they wanted that and we’re finding a way to make it work.”
Charter’s Kevin Delaney moderated that session with Wilson and Joanne Lipman, author of Next! The Power of Reinvention in Life and Work. Here are excerpts from Wilson’s comments, edited for clarity and space, explaining the remote-work arrangement, challenges with it, and what he has learned to do differently as a result:
How Allstate went from about 20% permanently remote pre-pandemic to 82% now:
We went through a process where we top-down said certain departments need to be together. Our investment department, the traders, they need to be together. We just know they need to be looking at each other, looking at their screens. But there’s a lot of other people who don’t need to be together.
We then gave people choices from that. And of the people we gave a choice, 95% said they wanted to work permanently remote, they didn’t want to come into an office.
We also didn’t declare we had a headquarters. It was in suburban Chicago. The mayor of Chicago really wanted us to say Chicago was our headquarters. And we’ve resisted that. We’ve said we’ll always have a big presence there, but we don’t have a headquarters because I don’t know what a headquarters is anymore. A headquarters used to be the center of power. You came there to get noticed and be seen by people and move up. And we don’t have one of those anymore.
Recognizing the limits of executive power to enforce a return:
I don’t think I have all the answers, and if I did, our people wouldn’t necessarily follow me anyway. A bunch of my friends in New York who run financial services companies made this declaration: ‘You will be in the office.’ And nobody came in. Shows you what power you have as a CEO: like zero. So go with the flow, treat employees as customers, treat them with respect, and then they’ll come with you.
How to make remote work feel meaningful:
We’re thinking about the whole work experience. So not just what happens in the office, but how do we make that remote experience better. There’s some really good things here. I used to have to go around the country and do town hall meetings with 500, a thousand people, to try to get our employees. Now we do a Zoom call, we get 20,000 or 30,000 people on the call at once. It saves me a bunch of time, saves them from having to come for a meeting. If I’m boring, they can click off. It’s just better.
We took those meetings and now we had Arthur Brooks come in and talk to our employees just about happiness. Chat went crazy. You couldn’t believe how excited people were.
So there are ways you can think about outside the office. How do we make that experience rewarding?
How to strengthen organizational culture with remote work:
This is going to raise the bar because culture can be transmitted physically. Culture is just like you walk into a building, you walk into an office, it just becomes part of you. In this hybrid world and with the pace of change, whether that’s pace of change on the diversity of your workforce or pace of change with AI and the other stuff, culture becomes a higher bar. And I don’t think as a management science, we have good processes around culture. If you ask people what the definition of culture is, it’s sort of like pornography: you know it when you see it. We tried to develop our own answer, to come up with four components of culture so that we can actually measure it and see if we’re making a difference.
What good managers look like in this new world:
First and foremost it’s that you care a lot for your employees. Second, that you’re really clear about where your company’s going. Here’s our purpose, here’s what we’re trying to achieve, here’s what you want to do.
Remote work raises the bar on decision clarity. It used to be you could walk out of a meeting and if it wasn’t so clear, there’d be a meeting after the meeting. Or somebody walked by your office: ‘What did you say over here? I didn’t understand it.’ But now you click off Zoom and then they go off and you don’t see them for three days. I’m finding it’s harder for me to be clearer and more specific and it takes extra work.
The same thing is true on feedback. If you’ve read Reed Hastings’ book on feedback, on what they do at Netflix—it’s a lot more aggressive than we do, let me just put it that way. But they have really high margins and their people add a lot of value. So obviously it does work for them. But the idea that you’re really crisp and blunt with people so that when they walk out of that meeting, they’re not wondering, do they like me or not? You’ve got to be really clear. So it changes what we have to do. For us, those two elements, when we look at culture and we break it into parts and we break it into processes and say, what are we going to measure? Decision clarity and feedback are two things we’re working really hard on.
On the impact of remote work on diversity and inclusion:
It’s huge. Our diversity hires are up 30% since we went remote. Let’s say you’re a mother who wants to work, but you have two kids in school and you want to be able to take them to school and pick them up at school. But you still have time, you want to work during the day. If you had to drive 22 miles to come to our office, drive 22 miles back to school, you couldn’t work for us. And now you can. Our office was in the northern suburbs of Chicago and Chicago gets whiter and less diverse the farther north you go. So people from the south side didn’t come work for us.
Now the challenge we have—all these things come with challenges—is then you get them spread everywhere. So you’re like, well then what’s your opportunity to actually be able to get them to come back physically and have some connection and not be isolated? We’ve had seven talent centers around the country—do we ring fence it and say, look, you’ve got to live within 50 miles of one of our talent centers because it’s at least some place you can come or can we create pods? If we have two people in Des Moines, we’re not going to have 2,000 square feet of space for them. So it’s complicated, but there’s a real benefit to society.
Read a fuller transcript with Wilson’s comments, including discussion of productivity and the drawbacks of remote work. Watch the video of the session with Wilson, Lipman, and Delaney from the Aspen Ideas Festival.