WFA drives down attrition at Spotify

Music streaming giant Spotify began talking about remote work and working from anywhere (WFA) before the COVID-19 hit. Back in early 2020, Spotify’s executive team set the goal of being fully distributed by 2025.

The pandemic brought an opportunity to accelerate these plans, and Spotify announced a working from anywhere policy in February 2021.

According to a company blog post, this model is “a new way of collaborating that allows Spotifiers to work from wherever they do their best thinking and creating”.

This means that Spotify gave its employees the opportunity to choose whether to work from home or in a remote location.

However, the music streaming company went further and enabled its workers to choose where they wanted to live globally; this is what different WFA models from remote working approaches.

In a another post, VP of HR, Alexander Westerdahl, wrote: “We will also introduce more flexibility when it comes to what country and city each employee works from (with some limitations to address time zone difficulties, and regional entity laws in the initial rollout of this program).”

The idea is that employees can live and work anywhere in the world, so long as Spotify has some kind of operations in the country. To help, Spotify has expanded its European presence beyond Sweden to include Germany, Spain, and the Netherlands, as reported by Fortune.

For employees that move within their country away from an office hub, “we will support them with a co-working space membership if they want to work from an office”, wrote Westerdahl.

As part of this, Spotify has also adjusted its salary bands so they are no longer location specific.

The benefits of WFA for Spotify

Now, almost 18 months into living and breathing WFA, Spotify has reflected on the model’s impact on the business and employees.

First of all, it is clear that Spotify employees took advantage of this working approach. According to Fortune, 2% (or 150) of Spotify’s 6,500 employees chose to move and work in a new country, while almost double that moved within the US.

In addition, Spotify has experienced lower turnover as a result of the policy. Attrition rates in the second quarter (Q2) of 2022 were 15% lower than in Q2 2019; this is particularly impressive given Europe and the US have been experiencing a ‘Great Resignation‘ for the past year.

Another benefit has been diversity. This was a major aim of Spotify’s decision to embrace WFA: Westerdahl wrote in the blog post that “by experimenting and unlocking all talent we also enable diversity and inclusion, and making new jobs and markets available”.

Now half of Spotify’s hires came from outside its US hubs in New York City and Los Angeles. Also, women in leadership grew from 25% and 42% between 2019 and 2021, while the number of Black and Hispanic employees increased from 12.7% to 18% in the same period.

Katarina Berg, Spotify’s CHRO, shared with Fortune that this should show employers the benefit of embracing the right remote or distributed working model for them.

She stated: “If you decide that you trust your people, and you took a long time to find them, and you want to treat them well and they want to be with you, it doesn’t matter where they work.

“Work is something you do and not a place you come into. As soon as we cracked that code…it was quite easy to do this.”

Spotify’s HR team is now looking at the impact of WFA on collaboration and productivity with the help of the Stockholm School of Economics. They are planning to publish full findings, so watch this space if you’re considering a WFA model.

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