Editor’s note: WRAL TechWire contributing writer Jen McFarland has 20+ years working in IT with experiences across a range of tools and technologies. She wants to help small businesses and teams design, improve, and maintain the technology that helps them succeed. In 2022, she incorporated Marit Digital.
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RALEIGH – Tell me again why it’s critical that I come into the office every day.
Prior to the pandemic remote work represented a scant 2.6% of positions. Today, those performing at least some work from home make up 20-25% of the workforce; at least 10% are fully remote.
Make no mistake, some jobs need to be in-person, some people want to go to an office, and some companies feel being in-person is a cultural necessity.
But as we continue the push-and-pull of return to office, there remain many failures of companies to understand employee motivations and provide for evolving lifestyles.
Jen McFarland
Listening to Employees
The pandemic let the cat out of the bag: remote work allowed millions of workers previously unrealized levels of flexibility.
At the Raleigh Chamber of Commerce Women’s Leadership Conference this spring, an impromptu poll of attendees showed just how significant this shift has become. Among the five options deemed “most important,” the topic of work flexibility came in second at 37%, a mere 2 percentage points behind “culture” (which I would also argue is tied very tightly to work flexibility). Other items like compensation, benefits, and advancement all trailed significantly.
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It’s not just women who want this flexibility. A recent survey by Checkr of in-office workers showed that, if offered, 52% of women and 46% of men would immediately accept a full-time, remote option. Survey responses also showed that 45% would take a pay cut for a full-time remote job. Regardless of the compensation aspect, data frequently points to work-life balance as a key to greater retention, increased performance, and customer satisfaction.
There’s also the reality that three years in, the tools and technologies born of forced remote work are now often ubiquitous. Employees find little value in commuting to an office where they join video meetings.
The Argument Against Remote Work
The arguments against remote work remain clear for the leadership at many companies. Topping the list is the idea that remote workers are just less productive. An analysis by economists at the Federal Reserve Bank of New York studied a call center for a Fortune 500 company in which remote workers handled 8-12% fewer calls than their in-office colleagues. But the reasons for this difference are unanswered.
“It’s possible that any worker would be less productive at home,” said paper authors Natalia Emanuel and Emma Harrington in a related blog post. “Yet it’s also possible that less productive workers chose remote jobs.”
But this analysis simplifies a complex dynamic. First, remote workers are less likely to be promoted and, in some cases, also get paid less, providing inherent differences in motivation.
Secondly, for all the data on reduced productivity, there are results showing the opposite. An assessment of multiple studies from Goldman Sachs shows remote work impacting productivity anywhere from -18% to +13%. As the report concludes, “The lack of consensus is likely driven by differences in how the studies measure productivity and the types of tasks and industries they study.”
Likewise, any comparison of remote work before and after the pandemic is inherently flawed. The pandemic introduced new technologies and procedures that have supported this new normal and improved productivity. It also allowed workers the option of avoiding commutes or moving to areas with a lower cost of living. The motivations of workers to take remote positions are not the same in 2023 as they were in 2019.
Management Motivations
If productivity is a red herring, what are the underlying motivations for companies to fight for a return to the office?
A big one is the issue of real estate. According to Goldman Sachs, occupancy rates by commercial tenants have only dropped 4% in the past 3 years. Many office leases are longer-term, typically between 4-7 years. That means that we’ve likely only begun to see the impacts of companies dropping their leases post-pandemic. Approximately 17% of these leases are scheduled to expire by the end of 2024. Coworking spaces have become more popular and have absorbed some of the expanded inventory, but that won’t continue. It remains to be seen how the market will respond to such a significant shift.
Office vacancy rates if WFH stays elevated.
Source: Goldman Sachs Global Investment Research
Another incentive for leadership to return to the office is the shift in the culture that comes with a remote team. A remote team requires more work. When you’re no longer in the office, the opportunities for natural interactions and team building are no longer inherently provided by proximity; they now require extra effort and specific action. It may mean scheduling interactions or attempts to create the digital water cooler. For many, the scheduling of these interactions – which are non-revenue generating – seems like a waste and an endorsement to slack off, despite the fact that they happened spontaneously in the office.
And there’s the entropy of change. We’re creatures of habit. It’s difficult for some employers to consider the impacts of the shift away from the office, a concept as old as businesses. In recent years, many companies invested in “cool” office spaces, the ones with pool tables and fancy coffee machines. It’s hard to accept that piece of the culture – often representing a significant cost – no longer resonates with employees.
Coworking in Triangle is far from dead: ‘Digital nomads’ & more flock to providers
How to Get Back to In-Person
If companies truly believe they need their employees in the office they’re going to need to start by motivating, rather than threatening them. The current strategy from the big companies seems to be more of the latter, with negative comments from big-name leadership like IBM’s CEO Arvind Krishna, JPMorgan’s Jamie Dimon, and Elon Musk claiming that working from home is “phoning it in.”
Companies who want to have their staff in the office – whether full-time or hybrid – need to make sure that their communications convey trust in the employee. If the whole reason for making your staff drive into the office is because you don’t trust them to be at home, the relationship is designed for failure.
The biggest challenge, in my opinion, is for the company that wants to offer a hybrid solution. These companies must truly embrace both options and ensure they do the hard work of connecting the employees whether they’re in the office or at home. It’s also important to build a culture and procedures that don’t penalize those who do take advantage of remote flexibility more than others. If everyone is tracking the hours their colleagues are in the office, it will breed resentment and frustration. Companies will have to normalize both home and office as acceptable for their teams.
We’re far from finding stabilization on this topic. Factors including the tightness of the labor market, available commercial real estate, and the political forces on businesses will no doubt all continue to impact the options for employees. Regardless, companies will need to make the effort to listen and respond to employees on the issue of workplace flexibility. That cat is not going back in the bag.
