From pyjamas to pinstripes: The office return saga

During a recent conference, I shared research on human capital challenges, yet the attention and questions from employers were squarely on the decision to require workers to return to the office. With several tech and financial services firms changing their practices and requiring more on-site work, many are asking questions about the future of remote work modalities and considering if they should follow others in requiring on-site work for employees. 

Perhaps the tipping point came when Zoom, the firm that largely enabled the “Work from Home” option during the pandemic announced that employees must now report to the office. The champions of remote work could not be any less enthused as the company behind the teleconferencing technology that unchained them from office desks has now asked its employees to come back to the office at least twice a week. This edict applies to those living within 50 miles of an office. Nevertheless, Zoom’s new policy comes as an affront to legions of remote workers who believe their physical presence is no longer needed so long as they have a reliable means to activate Zoom. 

Many have taken their disappointment to social media. A quick scroll on Instagram and Twitter reveals that the word ironic or facepalm emoji accompanies posts lamenting remote work is coming to an end. The Wall Street Journal reports that roughly 20% of Fortune 500 firms now mandate five days in the office. For those that allow flexibility, the majority of organisations require three days as a minimum.

The pace with which WFH has become a norm is spectacular. One reason, according to researchers from Stanford, U Chicago, and ITAM in Mexico, is that the stigma around working from home has drastically shifted during the pandemic years. Their study also reveals that some workers would be willing to take up to a seven percent paycheck reduction in exchange for working remotely two or three days a week after the pandemic.

Zoom played a crucial role in enabling remote work during the pandemic. However, it appears that some corporations, from Wall Street to Silicon Valley, are now looking to curtail this practice. J.P. Morgan’s Jamie Dimon is not opposed to remote work until it involves those on his bank’s payroll. Amazon allowed many to work remotely, yet now requires people to work from the office at least three days a week.

Several factors contribute to this trend. CEOs, including Dimon, frequently cite the diminishing team ethos. Productivity is another. While initial studies showed an increase in productivity by working from home, further analysis shows that this is actually due to working longer hours from home. A working paper by researchers from NBER, UMass, and UCLA suggests that working remotely reduces productivity by up to 18 percent. While more research is needed to fully understand the impact of work modality differences, many organisations are calling the workforce back into the office.

Less mentioned, but no less of a headache for many organisations is the cost of real estate. As a company pays for commercial real estate and begins to look at the utilisation of that asset, many bosses would like to use that asset and have the people in the office. Adding to this perspective is the data associated with badge swipes in office locations. CBRE, a real-estate services company, reports that nearly 60% of US firms are tracking attendance in the offices.

The latest developments suggest that two shifts are underway. First, remote work is increasingly becoming a defining characteristic of smaller organisations, while larger companies are allowing partial to no hybrid work. Of course, this varies greatly by industry, location, and nature of the work. Second, the number of days per week of remote work is shifting as many organisations recalibrate and create tighter restrictions on what a hybrid work week might entail.

Lastly, WFH crusaders hold off the critical reviews regarding decisions at Zoom. The video-conferencing platform is not reneging on its promise. After all, its corporate advantage hinges upon remote work. In reality, the San Jose-based company is doing what it believes to be the unavoidable consequence of the pandemic. “Hybrid work will become the standard,” Zoom’s CEO Eric Yuan said at a tech conference in Australia. He seems to be right, it is just that we may be redefining the hybrid work week to something closer to just one or two days from home.

As human capital leaders grapple with policy questions and practice implementation regarding work modalities, it seems important to keep an agile approach and outlook. Rather than hard lines for all employee groups, many organisations are allowing levels of variation within company guidance to account for the needs of the work area, the desires of employees, and optimal interfaces with others. While it may be helpful to consider the remote policies implemented at other organisations, we hope to see more human capital leaders develop practices and approaches that fit with the organisation, workforce, and culture that is important. After all, if we consider human capital for competitive advantage, then we are best served in taking an approach that supports the firm strategy and plans.