Many big bosses in the U.S. want their employees to be back in the office as soon as possible, believing that sharing a real workplace will make them more creative and productive. But is there good evidence for this impulse? Or is it just "work nostalgia"?
The Work-from-Home War: What CEOs and Employees Need to Know
Jena McGregor
CEOs love data. Data is the driver of pricing decisions, strategic decisions, and entering new markets. But when it comes to telecommuting, conversations in executive rooms often sound more like personal opinions than facts. And, many of these executives want employees to return to their workplaces.
Last September, for example, BlackRock CEO Larry Fink said in an interview about curbing inflation: "I think if we can somehow get more people back to the office, we're going to see productivity go up." Disney CEO Bob Iger also called on employees to return to the office four days a week in an email earlier this year, saying, "Nothing can replace the ability to connect, observe and create with colleagues, and that ability comes from being physically together." ”
JPMorgan CEO Jamie Dimon, who has been a staunch opponent of fully remote work, said in 2021: "It doesn't work for young people, it doesn't work for those who want to fight, it doesn't work for sudden ideas, and it doesn't work for corporate culture." ”
Are they right? The truth is, it's hard for us to really judge. Workplace norms are changing rapidly, and collaboration software tools are constantly being updated and improved.
While working entirely remotely may be a matter of course for some jobs and employees, it can have an impact on the work of others. It's notoriously difficult to measure the productivity of white-collar workers. Much of the available data comes from employee self-report surveys or academic studies on specific jobs.
Brian Elliott, who led Slack's Future Forum research consortium and now advises executive teams on flexible working arrangements, said that in this regard, many CEOs are still obsessed with the office model of years ago. "There's still the CEO echo chamber effect (i.e., in a relatively closed cyberspace, if you hear similar echoes of your opinions, you think your views represent the mainstream, distorting your perception of general consensus)." He said.
Both sides of the opinion threw themselves into it with an almost fanatical attitude. Jonathan Levav, a professor at Stanford's Graduate School of Business, who co-authored a widely cited paper claiming that video conferencing was hindering creative generation, was surprised by the angry reaction from remote work proponents. "This has become a religious belief rather than a thoughtful discussion," he said. ”
With this in mind, Forbes spoke with academic researchers, corporate consultants, and business executives to understand what the data or their own evidence might reveal about remote work.
While some data seems to support executives' complaints that remote work undermines productivity, hurts younger employees, undermines creativity or stifles corporate culture, other studies suggest that remote work does the opposite, translating saved commute time into more working hours, retaining middle-aged employees who need flexibility to care for children or the elderly, and making it easier to build a diverse workforce without geographical restrictions on hiring. On many issues, "if you find one study, you can find another study that suggests the opposite." Elliott said.
But one conclusion is clear: hybrid work seems to win, with less experienced employees likely to be more vulnerable to the adverse effects of remote work, and employees are indeed very reluctant to work full-time in the office.
Beyond that, as with most things, the truth is complex and "highly individual," says Ethan Bernstein, a professor at Harvard Business School. "I find it confusing and disappointing that senior leaders will say, I knew this was going to be the case, because I knew it was going to be the case. I think their employees think the same way. ”
productivity
When the pandemic first began, CEOs seemed surprised at how efficiently people were working from home. Three years later, they issued a different warning that productivity was declining. (Meta CEO Mark Zuckerberg said in 2020 that telecommuting provides "more room to think" about the long term, making him "happier and more productive at work.") In 2023, Zuckerberg said that internal performance data analysis shows that engineers who work face-to-face "can get more done".)
So which is the case? Studies can be selectively singled out to point to any outcome. Stanford economist Nicholas Bloom recently wrote a working paper reviewing existing research that showed that fully remote work seemed to reduce productivity by about 10 percent on average, causing an uproar. However, the review also found that "for hybrid work – that is, well-organized hybrid work that is often overlooked in many studies – [the impact] appears to be smooth or even slightly positive." ”
Still, there's a lot of subtlety in the numbers before CEOs start waving Bloom's papers and rallying everyone back to full-time work at the company. Bloom said the studies reviewed often involve low-wage laborers performing repetitive tasks that can be objectively measured, such as call center agents or data-entry workers in India, which may not generalize to the overall workforce.
He noted that the studies also covered a variety of management styles. Elliott said some reports looked at employees under atypical 2020 conditions, when children attending classes online were around, or vaccines were not yet available, which may have influenced the results.
Bloom also noted that companies that work fully remotely will save on real estate costs and have other natural advantages, such as lower employee turnover or access to global (lower-cost) employees, offsetting potential declines. "It's like saying I'll never buy a Toyota because Ferrari will go faster," Bloom said. That's true, but Toyota's price is one-third that of a Ferrari. Fully remote working may reduce productivity by 10%, but if costs are reduced by 15%, it is actually a very profitable thing to do. ”
At the same time, even a little face-to-face time each week can mean different results. For example, in an earlier study by Bloom at Stanford University, a group of remote call center agents worked 13 percent more efficiently just one day a week at the company.
Raj Choudhury, a professor at Harvard Business School, found that government patent officers could work from anywhere, but they were more productive by being present in person several times a year. Another company conducted a randomized trial of office workers comparing full-time in-person workers with twice-weekly remote workers and found that hybrid workers had zero or only a slight positive impact on metrics such as productivity, performance reviews, or promotions
"In fact, flexible ways of working will remain, but it will require new management practices." For example, Chowdhury says, have regular out-of-team gatherings or find ways to coordinate employee attendance so they don't have lonely video conferences in the office. "There is good hybrid work and there is bad hybrid work."
creativity
Along with productivity, innovation has become one of the most common reasons for management to ask employees to return to the office, as they believe that unexpected encounters with colleagues while queuing in hallways or cafeterias inspire creativity. For example, Robert Thomson, CEO of News Corp, said in a January memo that "spontaneity and contingency in a dynamic office environment are critical in creation and iteration." ”
What's the problem? Experts say it's unclear how many random pantry meetings will inspire innovation. Long-standing research has shown that people don't often talk to colleagues sitting 30 feet away, even when technically such opportunities arise. And the review of studies shows that people are more likely to generate more novel ideas without collective brainstorming.
At the same time, open-plan office initiatives — the ones bosses set up to foster employee engagement — can backfire. Bernstein's research shows that open office reduces face-to-face communication by up to 70 percent due to employees using headsets, avoiding eye contact, and following the body language cues of colleagues. "The norms spread very quickly," he said. "If you interrupt someone, they'll stare at you."
But other studies have found that face-to-face work also has creative advantages. The researchers looked at anonymized phone data and found that face-to-face meetings by employees at different companies increased patent citations, suggesting that innovation "ecosystems" like Silicon Valley can indeed make a difference. Levov's research caused outrage, and in one experiment, he found that fully remote teams that designed new products through video conferencing tools were less productive than those who worked in-person. "People's physical experiences affect the way they perceive." Levav said.
Once again, hybrids seem to be a big help. In another study, Chaudhry found that teams that worked together 25 to 40 percent of the time had the most innovative work outcomes and were better than those that spent less or more time in the office.
Chaudhry said: "But it doesn't have to be weekly. He notes that employees only need to gather for a few days a month to see the impact. The truth is, the vast majority of people now work and work with people across the country and around the world, and you can't bring them all together. ”
guide
One of the most common concerns about remote work, and one of the most common reasons to get people back to the office, is its impact on new or younger employees.
In 2021, Ken Griffin, founder and CEO of Citadel, said: "For our youngest employees, I am very concerned that the loss of their early career opportunities will cost us dearly decades to come. ”
In this area, concerns seem to be more generalized. In a study of pre-pandemic workplaces, Emma Harrington, an assistant professor at the University of Virginia, found that software engineers working in the same building as their teammates received 22 percent more code feedback than colleagues who worked in other buildings. When the pandemic raged and offices were closed, the gap in the number of feedback received between the two groups of employees largely disappeared. "It seems that perhaps more junior employees are more willing to ask for additional feedback and suggestions when working face-to-face," she says. ”
At the same time, proximity bias – the idea that proximity to colleagues gives you an advantage – persists. For example, a 2021 survey of 800 business executives conducted by the Institute for Human Resource Management found that 42% said they sometimes forget about remote workers when assigning tasks.
Kimberly Elsbach, a professor at the University of California, Davis, has long studied "working time bias," the career advantage of people who work in offices. Her 2010 research found that when people are seen in the office, they are perceived as more reliable and dependable even if others are ignorant of the quality of their work, and if they are seen outside of working hours, they are also perceived as more engaged and engaged, "subjective traits" associated with career advancement.
Unless performance reviews are more objective, Ellsbach says, "our research clearly shows that you are at a disadvantage in these important cognitive aspects." ”
Still, Elliott notes that while the impact of telecommuting on less experienced employees is a real concern, studies like Harrington's also show that distributed teams—groups of employees who actually work in the office but work in different buildings—suffer the same fate. "It's not just because it can be more difficult to mentor employees remotely, but because we didn't have a good system in place for mentoring and development in the first place, especially for younger employees," he said. ”
"In-person mentoring makes it easier for people to get into the habit of helping each other," he said. What most workplaces need is a way to bring people together, at least in training and non-workplaces, and better mentorship programs: "If you consciously build a process around it, you're going to get better results, that's inevitable." ”
corporate culture
In the early days of the pandemic, when managers were concerned about the impact of remote work on corporate culture, many scheduled virtual happy hours or VR headset games, but for many employees, this only added to Zoom fatigue. CEOs complained about the impact on corporate culture, with then-Starbucks CEO Howard Schultz writing, "While we built interactive connections and screen skills during the pandemic, we lost real human connection at headquarters." ”
Corporate culture is a tricky thing that is difficult to explain with simple definitions. Technically, it's a norm or value shared by the company, but many employees see it as synonymous with work-life balance, or related to how vicious their boss is, or to the amount of fun benefits available. All of this is difficult to measure.
An alternative indicator of corporate culture might be how people feel connected to their colleagues, but the results are also mixed. Microsoft studied the work habits of about 60,000 employees before and after they switched to remote work — comparing email, video calls, calendars and other digital communications — and found that the percentage of time they spent working with teams in other parts of the company dropped by about 25 percent. At the same time, MIT researchers analyzed email network traffic at schools and found that during the remote work pandemic, communication between different research units decreased, resulting in fewer "weak relationships." This improved when hybrid work resumed.
But many, as well as many companies that stick to remote work arrangements, say it helps the culture or has no impact on it. Earlier this year, Slack's quarterly survey of more than 10,000 knowledge workers found that those who work remotely or hybridly are more likely than those who work full-time at the company to say their culture has improved over the past two years, a 57 percent increase. Review platform Yelp, which has closed all but one US branch, released a breakdown in February that found no significant change in the percentage of new hires who said they were connected to the team between 2019 (95%) and 2022 (94%).
At Atlassian, a software company that doesn't require shifts, 40 percent of employees live more than two hours from the office. The company conducted an analysis to find out how many gatherings remote employees need to get together to feel more connected with their colleagues.
They found: Internal surveys showed a 27% increase in the level of connection felt by remote employees attending in-person team gatherings; The survey also showed that three meetings per year is the best frequency to prevent loss of contact. In this internal survey, employees who regularly attended office parties did not improve their sense of connectedness scores.
Annie Dean, Atlassian's head of managing teams spread across locations, said: "Whatever the reason, we always use the workplace as a lightning rod, and the way we work is where the real crisis lies. ”
This article is translated from
https://www.forbes.com/sites/jenamcgregor/2023/08/19/the-war-over-work-from-home-the-data-ceos-and-workers-need-to-know/?sh=7480d60a6afa
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