Return to Office and the Death of the “All In” Mentality
By Annie Parmelly, Culturati Staff Writer
The return to office tug-of-war between organizational leaders and their workforce continues- and though CEOs are tightening their grip, employees are steadfast in remaining where they are: happy at home.
Tech giant Apple is hoping to gain some ground with the Sept 5 mandatory return-to-office deadline passed last week. CEO Tim Cook is hopeful that the 3 day a week RTO directive will strengthen the ingenuity and collaboration that breeds the company’s success- though the outlook is not so bright for more than 1000 Apple employees who have banded together to protest the mandate. The Apple Together group, as well as 64% of WFH eligible employees surveyed by ADP Research Institute, argue that return to office is unnecessary, and they are willing to leave if forced to return.
The deliveries vary- from Tim Cook’s nostalgic references to the “serendipity” of in person meetings, to BlackRock’s Larry Fink blaming remote work for inflation, to Elon Musk’s infamous “pretend to work somewhere else” memo- but they all seem to be singing different verses of the same song: Nobody wants to work anymore. Microsoft Worklab’s Work Trend Index 2022 sums up the impasse with a discovery from a March survey of over 30,000 employees globally:
“Despite 80% of employees saying they are just as or more productive since going remote or hybrid, 54% of leaders fear productivity has been negatively impacted since the shift.”
Leaders aren’t wrong to fear that their employees are not as productive working from home according to a January 2022 study by Microsoft:
“Our results show that firm-wide remote work caused the collaboration network of workers to become more static and siloed, with fewer bridges between disparate parts. Furthermore, there was a decrease in synchronous communication and an increase in asynchronous communication. Together, these effects may make it harder for employees to acquire and share new information across the network.”
A dip in productivity and collaboration is not the only concern of many CEOs, however- they attest that organizations also stand to lose out on creativity, culture and innovation if their workplaces are not filled. Although certainly sobering to consider, these claims have largely lacked the data to support these hypotheses and therefore are easily dismissed by RTO detractors.
However, at the beginning of the month MIT published results from a study on employee social networks with “weak ties” which gives weight to CEOs’ concerns. “Weak-ties” are the type of social connections outside of one’s direct or “strong tie” network, which are needed to facilitate new ideas and innovation. Think of “weak-tie” conversations as the cross-collaborative remedy for group-thought, which is common in an employee’s “strong-tie” network. To oversimplify, they developed a measurement for virtual “water-cooler talk” by tracking internal email patterns during and after the Pandemic, looking at how often employees interacted with someone considered a “weak-tie” (a contact outside of their department with no other mutual correspondents). Paolo Santi, researcher at MIT’s Senseable City Lab and at the Italian National Research Council discusses the implications of their findings:
“Our research shows that co-location is a crucial factor to foster weak ties. Our data showed that weak ties evaporated at MIT starting on March 23, 2020, with a 38 percent drop. Over the next 18 months, the drop translated into an estimated cumulative loss of more than 5,100 new weak ties.”
It is important to note that even after a model they developed showed that the only way to completely recover the “weak-tie” connections would be to return to the office full time, Carlo Ratti, Professor of the Practice of Urban Technology and Planning and Director of MIT’s Senseable City Lab warned against it:
“Employers would make a mistake in discarding the newfound flexibility of the Covid years. Our study hints at the fact that establishing a work balance trade-off by combining in-person and remote interactions among colleagues seems to be the optimal solution, which could inform the transition to a hybrid, post-Covid-19 ‘new normal.’”
Ratti’s advice begs the question: Even IF researchers are able to overwhelmingly prove the limitations of working from home, will it matter to employees? Microsoft’s Worklab team asserts that some CEOs see employee pushback as yet another roadblock on the return path to normalcy rather than what it is: a collective shift in mindset away from the “traditional” work model and an unambiguous demand for flexibility.
What has been made clear through research and data is employee sentiment regarding remote work. For most of the current workforce, gone are the days of staying late at the office in hopes of a promotion, or taking on extra responsibilities outside of one’s pay grade to stand out. Gen-Z has created an entire Tik-Tok trend dedicated to “quiet quitting”. People are reprioritizing work. Redefining who they are. Enjoying the extra time they have with no commute. LinkedIn Editor-in-Chief Daniel Roth shares the new workforce consensus in a podcast interview with Worklab- 87% of workers in a LinkedIn insights survey found that they would prefer to stay remote at least part of the time and 73% also cite flexibility as their top priority:
“The pandemic has shown us all that the traditional way that we have worked might not be the best way of working. We see this in all of our data at LinkedIn, there is this incredible demand for the ability to be able to carve out your own path and to have flexibility.”
The Microsoft Work Trend Index cites other top employee priorities: positive culture (46%); mental health and wellbeing benefits (42%); a sense of purpose and/or meaning (40%); flexible work hours (38%); and more than the standard two weeks of paid vacation time each year (36%); and what’s most illuminating about both findings is that traditional compensation is not at the top of either list. Pay is no longer the leading motivation to take (or stay at) a job and intangibles like company culture, personal wellbeing and purpose have taken precedence, which signals a step into uncharted territory for many traditional employers.
The best practice for navigating an impassioned negotiation? Find common ground, and give where you can. One thing both employees and CEOs seem to agree upon is the importance of our favorite topic at Culturati: company culture. CEOs argue that culture can’t be built remotely, and to a certain extent that’s true. The traditional idea (sensing a pattern here yet?) of what culture means is largely dependent on employees being in office- preaching, living and breathing the company’s core values from the top executives to the frontline. Darren Murph, Head of Remote at Gitlab, spoke at Culturati Summit 2022 this year on what it would take for companies to embrace a fully remote culture:
“A lot of it is shifting the mindset from a fear based mindset to an opportunistic mindset. It’s very easy to jump into this fear and scarcity mindset of ‘collaboration is harder’ or ‘culture building is harder’, and the list goes on and on. But if you reframe it as well- now that we don’t have to have people in a certain city, now that we don’t have to uproot families and bring them to one specific place, what opportunities are there?”
In the same session, Bonnie Dowling, Associate Partner at McKinsey & Company shared that the motivators that attracted and retained talent three years ago have changed drastically, and companies who have recognized this mindset shift and adjusted to meet their employees where they are have not seen the same turnover as those who have not.
Building a fully remote culture is possible, Murph asserts, but it’s reliant on adjusting objectives to meet new demands, extreme transparency, clearly defined processes and plenty of gratitude. And in a hybrid model, make sure in-office days are structured with purposeful interactions. According to McKinsey & Company’s Brooke Weddle,
“Post-pandemic workplaces should be assessed on how clearly they reflect the purpose, principles, and priorities of the organization as well as those who work there. If not, talent will look elsewhere. The companies that strike the right balance will thrive.”
Now for the real talk: Companies with long-term leases and less-tech-savvy leaders at the helm are less open to remote work and more likely to lose the talent game. The need to justify the use of space in an unbreakable, decade-long office lease is not an issue employees are sympathetic to (especially given the state of the residential housing market). OperationsInc discovered that nearly half of workers (49%) say they would be willing to take a pay cut to increase or retain their flexible/remote work arrangement, with 21% saying that they would take a pay cut even if it was more than 5% of their salary. SHRM Research Institute found that 48% of about 1,700 surveyed workers in the U.S. said they will “definitely” seek a remote position for their next job, the research showed.
This demand for flexibility is not merely a matter of convenience for many WFH proponents. Many have been priced out of housing in the cities where their company is headquartered. Many are working parents or caregivers who would not be able to work away from their homes. (Another disconnect between employers and their employees to note is in a survey conducted by PWC: 81% of executives say their company has been successful in extending benefits for childcare while just 45% of employees say the same.) Stanford Economist Nicholas Bloom conducted the WFH research and saw an opportunity not only to be more productive, but more importantly to remedy the labor supply issue:
“The other benefit that possibly is even larger in the long run is the positive impact on labor supply. There are a number of groups that are more able to work because of working from home. A lot of people — think folks with young kids, people that are disabled, people that are close to retirement age, students — may be happy to work three days a week for six hours a day without the commute, but wouldn’t be prepared to do that for five days a week, including commuting. I think that could push up labor supply by 2%, 3%, 4%, which would be a very large impact on growth.”
Despite the extensive and heated discourse, it’s clear there is no one-size-fits-all solution. Remote and hybrid work can be valuable and powerful systems, but there’s no denying that physically being together is the best way to fulfill the human need for connection. It’s just that for most, the need for flexibility outweighs the need to be with coworkers every day. The 40-hour workweek was designed almost a century ago, and it’s hardly deniable that it simply does not translate in a post-pandemic, corporate world. So much has changed, especially over the last two years- and asking employees to return to a system that’s not working is just not tenable. Perhaps it’s time to change what’s being asked. Let us hope for more research on remote productivity, creativity, culture and innovation to better inform the paths forward. And for an easy commute to those already on the way.