Work From Office
Despite greater productivity, working from home decreases the probability of getting a promotion by 12%
Work from home is polarizing. Last week I was on Smerconish, and after articulating the benefits of remote work for four minutes, I spent 30 seconds on the downsides: Offices are where young professionals establish relationships with mentors, colleagues, and mates. In sum: Put on a shirt and get into the office. Cue the Tesla-bro-like pushback. On Twitter: “Garbage,” “It’s not 1954 anymore,” “Really dumb take.” In sum … you know … Twitter.
Remote work generates heat because it matters … a lot. Since the onset of the pandemic, the dispersion of work has morphed from an experiment on the fringes of the economy to the mainstream. As of September 2021, almost half of all U.S. employees were working remotely at least some of the time. Among knowledge workers, only 34% were working full time at the office in May 2022. Think about that: More office workers in the U.S. are remote, at least some of the time, than are in their traditional place of work full time … a cornerstone of our social construct is disintegrating.
Mary Tyler Moore, ER, and The Office were about … the office. The Sopranos and Homeland were (sort of) about remote work. But I digress. With WFH’s widespread adoption, we are beginning to get real data on the most profound shift in how human capital intersects with our economy.
Work From …
We call it “work from home,” but that’s a misnomer. It’s “work from not at your employer’s location,” but that makes for a lousy acronym. We’re really discussing remote work, an ephemeral sounding phrase that’s reaching for permanent status.
The trend is not without opposition, but something that buttresses remote-work evangelists is that the strongest advocates for returning to the office have the least credibility. Jamie Dimon, David Solomon, and Howard Schultz (note: I’ve worked with all three, and they’re great leaders) built their success in the Before Times and had the resources to live close to work and ensure their kids were looked after. For most workers, not so much. So, yeah … works for you, boss.
This isn’t a populist uprising, however. The WFH movement is (another) transfer of wealth from the poor to the rich. Money is the transfer of work and time. Research shows people who cannot work at home are more likely to be lower-income, rent their home, lack a college degree or employer-provided health insurance, and be non-white. Uber drivers, Amazon warehouse workers, FedEx drivers, and meatpackers don’t have Zoom accounts. It’s bits vs. atoms, and bits are managed by higher-paid information workers.
But remote work could also empower. Our aging population, the spread of technology that’s depressing our youth, and increased economic stress on young families all need significant investment in one thing: care. We often lose sight of the whole point, the whole shooting match of the economy — it exists to provide people with the security to form and strengthen relationships. I believe we need a new classification of employees: care workers. People who are caregivers for children or aging parents, or who find themselves in circumstances where they need to provide self-care. People struggling with mental health issues or unable to find affordable housing near work might also qualify. Companies should make a forward-leaning investment in workers fitting this new classification to ensure their career trajectory holds steady while they’re providing care. The option of remote work makes these arrangements more feasible.
There are moral arguments to be made for this, but the easier argument is economic. With birth rates declining we have to find new sources of workers, full stop. The pandemic set female participation in the workforce back decades, and we need the most educated cohort in history (young American women) to return. But making that happen will require going on offense and investing in a care worker classification. Because, let’s be honest, most of the responsibility for caring for children and aging parents falls to women, and that will likely continue. Ensuring women, and some men, can maintain professional relevance and equal pay through the leverage of technology is the big unlock.
An attention economy brings time spent and valuation together. TikTok now commands more attention than Facebook and Instagram combined and, accordingly, tripled its revenue last year. The platform also capturing more attention is your home, specifically residential real estate, which — despite fears of a recession — has seen an unprecedented increase in home values and rents. Office space, meanwhile, is to residential what print was to online media in the aughts; its owners in denial as it hemorrhages share, jobs, and value.
Be wary of predictions that we’ll see an exodus from the cities to suburbs, however – the death of cities has been often and greatly exaggerated. Yes, Midtown at lunchtime feels muted … but lower Manhattan is more vibrant and pulsing than I’ve witnessed in my 20 years here. Some workers will move to more beautiful rural areas for balance. (I hate that word.) They may or may not find it. However, it’s more likely they will find career stasis.
An old-economy winner will be resort hotels. Business travel is a bull market right now, because event planners are suddenly strategic assets. Companies with a high share of remote workers need to get people in the same place some of the time, so they’re investing to make those moments an experience that sets an aspirational tone for the firm. They book the One Hotel in South Beach, fly in managers from around the globe, and charge the event planner with creating 2.5 days that will make people feel better about their employer the other 363 days. I know this, as my speaking business has thrived.
But is remote work more productive? Are people working from home, or just … at home? We are starting to see some early data. And … it’s mixed. Proponents of remote work point to two recent studies that found increases in productivity: Researchers at Stanford and Harvard studied call center workers, and found productivity (calls per hour and customer satisfaction) increased 13% and 7.5%, respectively. But call center work, which is relatively low-skilled and closely monitored by management, is not representative of higher-value knowledge work. Another study, this one tracking “skilled professionals” at a large IT services company, found that output stayed the same when workers went remote — but that workers put in 30% more hours.
That’s a terrible outcome for workers but also for employers, because expecting your employees to work a third more hours for the same pay isn’t sustainable. Remote work doesn’t have to be more productive to make sense, but its other benefits become less attractive if you have to work longer for the same outcome(s).
One Is the Loneliest Number
Similar to most technological innovations, there is potential for enormous progress (see above: care worker), but also externalities (e.g., depression, addiction, misinformation, polarization, etc.). Remote work, poorly implemented (which is typical), is awful for young people, especially young men. The office has been an enormous source of social capital, and we’re getting poorer. Where do we mix with people from different backgrounds? The mall? The movie theater? No and no.
My first client at Prophet (a brand strategy firm I started in B-school) was Levi Strauss & Co. — a wonderful firm. The head of Europe was a guy named Carl Von Buskirk. I once saw Carl at the Bay Area HQ and asked if he was there for a meeting. He responded, “No, I come once a quarter to be visible and get drunk with people who matter.”
Remote work for young people is often … a bad idea. The office is where you build relationships and find mentors. And mentors are the people who become emotionally invested in your success. That same Harvard study of call center workers found that, despite greater productivity, working from home decreased the probability of getting a promotion by 12%. Another study found that people who work from home are 38% less likely to receive a bonus. There are usually several people qualified for each promotion. The job will typically go to the person who has the best relationship with the decider. And relationships are a function of proximity. If this sounds unfair, and just bullshit facetime … trust your instincts. The corporate world and small injustices will be synonyms for a long time. This isn’t to say young people shouldn’t have opportunities for remote work. However, the conversation coming is … “OK, but you will make less money.” In some cases, it may be worth it. Some.
If you’re an employer, the office is your primary tool for facilitating culture. Holiday parties and post-work drinks aren’t sunk costs — they’re investments in happiness, innovation, and relationships. The greatest driver of retention is if someone has a good friend at their workplace. Without a workplace, your employees have fewer points of contact. Sixty percent of remote workers say WFH makes them feel less connected to their colleagues.
I sit here, at 1:12 Friday a.m., and wonder … who is this week’s newsletter for? Two thoughts: Ask not what remote can do for you, but what it can do for the country? The U.S. has registered so much prosperity, but without commensurate progress — wages decoupled from productivity five decades ago as we prioritize shareholders over the middle class. We’ve lost sight of the endgame, to help others love and care for the people important to them. Remote work offers the opportunity for caregivers to earn a living and care for people at the same time. That’s a profound opportunity, and worthy of investment by corporations and the government.
My best friend’s mother has progressive dementia, and another good friend has a son who is severely autistic. The best caregiver for both is also the breadwinner. Remote technologies and a new classification of worker could bridge the gap. After all, what does all of this mean if we can’t take care of our families? If we can’t love them? Really, what’s the fucking point?
In contrast, for those of you starting your career — before you collect dogs and spouses, find an employer who offers an increasingly important benefit, an office. My time at UCLA was rewarding. But my first job, at Morgan Stanley, was more educational. In two years I found a mentor who was irrationally passionate about my success, learned (sort of) how to read a room, navigated around a senior exec who kept asking me out (yes, this happens to men), and learned how to succeed, or not, in a society called the workplace. If you do not enter the physical workplace early, you’ll miss opportunities and stressors that will make you stronger and more capable.
Remote work offers a huge unlock for caregivers. Also, the physical workplace offers guardrails, structure, and connections for a generation that’s been robbed of relationships and growth. We are a social species. We live in a capitalist society. Find mentors, colleagues, and mates … get to the office. All of these things can happen on a screen, most will not.
Life is so rich,
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