still need offices?
Corporate workplaces remain an indispensable tool in maximizing talent.
Supporting a Multiverse of Work will present huge challenges to organizations, not to mention their landlords. It is worth asking the question: Is it really necessary, even if employees want it? Why not save cost by reducing offices to mere skeletons, or eschew them entirely? After all, many workers were surprisingly productive when COVID-19 forced many of them to work entirely remotely for a year or more. CFOs counting the cost of empty offices are asking whether extensive portfolios of prime office space are really needed.
Productive during the pandemic? To answer this question, a clear-eyed examination of the effectiveness of remote work is in order. Much is made of employees’ perception of their own performance. Overall, a strong majority of them report working effectively during the pandemic. According to GWA’s survey, 68 percent say they have worked successfully while at home, with 70 percent of their managers agreeing that remote work has had a neutral or positive impact on team performance.16 But this success is uneven.
Younger workers, for example, are having a more difficult time than their older counterparts. Only 59 percent of Millennials and 44 percent of Generation Z feel successful working at home.17 Similarly, half of younger respondents to a Gensler survey feel it is harder to avoid distractions at home than at the office.18 This is not altogether surprising given that these younger workers are demographically more likely to live either with roommates or young children. By definition, they are also at earlier career stages, and many have not yet built the kind robust professional networks that underpin career success.
"Those who worked in non-work specific areas at home had a better experience in the office overall.”
Generation is only one dimension that correlates with the effectiveness of remote vs. onsite work. For many workers, the setup of the home office is simply inadequate for working effectively. According to a Stanford University survey, only 65 percent of American workers have an Internet connection that is reliably fast enough for video conferencing.19 The remaining 35 percent require another solution—either a corporate office or a tech-enabled third place like a coffee shop or coworking location—to be effective.
The type of home office setup is another key driver of effectiveness working remotely. According to Your Workplace of the Future, a report released in January 2021 by Leesman, this makes all the difference vis-à-vis working in an office: “For those who work from a dedicated office at home, the home provides a better experience than the office” – an issue we will return to later in order to understand why this is the case. However, Leesman also note that “In contrast, those who worked in non-work specific areas at home had a better experience in the office overall.”
Finally, as the pandemic wore on through the latter half of 2020 and into 2021, evidence emerged that perceived improvements in productivity and collaboration eventually either disappeared or reversed under an enforced 100-percent remote working model.21 Corporate executives also began to notice the deleterious effects of constant separation from coworkers, and an increasing number say they will encourage or mandate in-office work when conditions allow.22,23 20
Academic investigation In addition to self-reported productivity during the pandemic, evidence from academic literature suggests that, within certain parameters, remote work can be at least as productive as working in the office. In a landmark study conducted by Stanford University researchers and published by the National Bureau of Economic Research, CTrip, a Chinese travel company, conducted a randomized, controlled study of workers in its Shanghai call center. The results of the nine-month study, fielded in 2010-2011, showed a 13 percent increase in productivity among those who worked from home 4 days per week (with the 5th day being in the office) compared to those who worked all 5 days in the office.
Again, there is more to the story. At the end of the study, workers were allowed to choose whether they wanted to work remotely or in the office. About half of each group chose to switch, and the subsequent increase in productivity across the entire team was 22 percent.24 This indicates the importance of the office to the productivity of a meaningful portion of CTrip’s workforce. Furthermore, some who elected to work in the office may have been motivated a small but significant “promotion penalty” effect discovered by the researchers: Those in the initial group chosen to work from home were less likely to be promoted than their in-office colleagues.
The preponderance of the evidence suggests that remote work is beneficial within limits but can be “too much of a good thing” when it goes beyond them.
Additional limitations of these findings should be noted. First, call center work is consistent and repetitive. This lends itself well to productivity analysis but is far from representative of most knowledge work. It is also worth emphasizing that study participants who worked from home were subject to strict standards, including a physically and technologically adequate work setup and an absence of interruptions at home.
Other research provides additional support for a blend of remote and onsite work. In 2007, the Journal of Applied Psychology published a meta-analysis of several earlier studies on remote work. The analysis found overall increases in job satisfaction and performance among remote workers, which they attributed to higher perceived autonomy and lower work-family conflict. These effects were mitigated, however, by a negative impact on supervisor-coworker relationships when remote working exceeded 50 percent.25
The preponderance of the evidence suggests that remote work is beneficial within limits but can be “too much of a good thing” when it goes beyond them. Much of this research was conducted before the era of collaboration tools like Slack, Zoom, and Microsoft Teams. It is reasonable to think, however, that while technology might expand the appropriate boundaries of remote work, it cannot eliminate them. Furthermore, the boundaries themselves will vary by role and by person. We can conclude that corporate offices will remain a vital part of the Multiverse of Work.
16. https://globalworkplaceanalytics.com/global-work-from-home-experience-survey 17. https://globalworkplaceanalytics.com/global-work-from-home-experience-survey 18. https://www.gensler.com/uploads/document/695/file/Gensler-US-Work-From-Home-Survey-2020-Briefing-1.pdf 19. https://news.stanford.edu/2020/06/29/snapshot-new-working-home-economy/ 20. https://www.leesmanindex.com/your-workplace-of-the-future/ 21. https://reactnews.com/article/outside-voice-the-right-amenities-will-be-crucial-to-draw-people-back-to-the-office/ 22. https://www.wsj.com/articles/what-ceos-really-think-about-remote-work-11600853405 23. https://www.globest.com/2021/01/28/wfhs-sheen-wears-off-for-some-large-companies/ 24. https://www.nber.org/papers/w18871 25. https://www.apa.org/pubs/journals/releases/apl-9261524.pdf