This article appeared in MarketWatch.
The battle over the post-pandemic return to the office is heating up.
Companies cite productivity concerns. Employees say it’s about control. Workplace experts point to companies sitting on billions of dollars of commercial property, and tech firms that over-hired during the pandemic, and are now looking to cut their workforce by pushing people to make a choice: go back to the office — or else.
Silicon Valley companies are doubling down on their efforts to get employees back to the workplace. Alphabet Inc.’s Google, Facebook owner Meta META, -0.29% and Amazon AMZN, -1.27%
are pushing to increase the number of employees working at the office. Some Wall Street banks have also joined in.
Using an expletive, Tesla TSLA, +1.81% CEO and Twitter owner Elon Musk told CNBC in a recent interview: “I’m a big believer that people are more productive when they’re in person. People should get off their goddamn moral high horse with their work-from-home bulls—.”
Google GOOG, -1.38% GOOGL, -1.25% last week called on hybrid-work employees who are required to go into the office three days a week to do just that. It will track ID badges, and consider action against very absent employees if they are chronically shaking off the office. CNBC reported this week that Google employees responded using memes on an internal site, with one reading, “Check my work, not my badge.”
David Sacks, a venture capitalist and former PayPal PYPL +0.88% executive, agrees with Musk about the supposed perils of working from home. “It’s time to admit that remote work doesn’t work,” he recently wrote on Twitter. “WFH Friday is a 4 day work week. Full WFH is a 2 day work week.”
Sacks went on to bemoan the lack of accidental and casual office brainstorming. “Every interaction has to be scheduled, which means a lot of information-sharing doesn’t happen,” he said. “Remote is a great lifestyle, not a way to build a great company.”
New York University professor of marketing Scott Galloway recently said during a Wall Street Journal CEO Council event: “You should never be at home. That’s what I tell young people. Home is for seven hours of sleep — and that’s it.”
“The amount of time you spend at home is inversely correlated to your success professionally and romantically. You need to be out of the house,” said Galloway, who wrote the bestselling 2017 book “The Four,” about Alphabet, Amazon, Apple and Facebook.
Companies are sitting on long office leases
But there’s a disconnect between employers and employees in terms of expectations surrounding remote and hybrid work and of how productive — or not, as Musk contends — people who work from home are.
Office workers and ultra-wealthy people face two different realities, said Chris Herd, CEO of Firstbase, which advocates for remote work. Those in the latter group enjoy “short commutes and have people who drive them to the office, and often have no problem getting to the office,” he said.
Herd also suggested that some companies that overhired during the pandemic are using the back-to-the-office mandate as a way to get employees to volunteer to leave. “How can we continue to reduce headcount without firing people?” he said. “One way is to say, ‘You need to come back.’”
Companies that are sitting on long office leases don’t want to incur massive losses if people stay home. Some 53% of companies expect their office portfolios to shrink over the next three years, according to a survey of more than 200 real-estate executives by CBRE, a commercial real-estate company.
“‘How can we continue to reduce headcount without firing people? One way is to say, ‘You need to come back.””
— Chris Herd, CEO of Firstbase
Herd said this is the big factor driving the return-to-office debate, and he believes that arguments about productivity and lazy, entitled employees are something of a red herring. “Employees going back to the office is a big advantage for [companies’] portfolios,” he said.
Employers need to distinguish between two key questions, he said: “Does remote work work? And does remote work work for my portfolio?” Empty office space — and the declining value of commercial real estate — is likely influencing remote-work policies, Herd added.
Average office occupancy in the 10 largest U.S. cities was hovering at 47.6% as of June 5, down from 49% the week before, according to Kastle, which tracks corporate ID-badge swipes in 2,600 buildings in 138 U.S. cities.
“Allowing an equal mix of office and remote work seems to be a strategy that is losing favor,” CBRE found. Some 45% of respondents in its most recent survey supported a mostly or fully in-office culture, compared with 37% in 2022.
By the end of 2023, 39% of global knowledge workers will have hybrid work situations, up from 37% in 2022, according to a forecast by the research firm Gartner. “Hybrid is no longer just an employee perk but an employee expectation,” said Ranjit Atwal, a senior director analyst at Gartner.
“Hybrid workstyle will remain prominent in 2023 and beyond,” he added. “To adapt, employers have been implementing a human-centric work design — including flexibility, intentional collaboration and empathy-based management — which suits hybrid employees.”
Are remote workers less productive?
Are people really slacking off when they work in their pajamas? Ask the millions of people who worked from home during the pandemic, take note of the 62.5 million fewer commuting hours per workday and check out a 2013 Stanford University study involving 16,000 workers.
In what has become something of a landmark study, Stanford researchers reported on an experiment at CTrip, a NASDAQ-listed Chinese travel agency. The study was done more than a decade ago — before pandemic-era opinions could muddy the waters.
Employees were randomly assigned to work from home or in the office for nine months. Working from home led to a 13% increase in performance, fewer breaks and sick days and even more calls per minute, which workers chalked up to a quieter working environment.
To be fair, a group of social scientists reported on the results of a survey about productivity in the Harvard Business Review earlier this year and concluded that managers and employees differ on their perceptions of “productivity.”
Employees include commuting time in their calculation, so for them, any time not spent in transit is a boost to productivity. “Managers tend to ignore commuting time … they just care about how much work is getting done each day,” the authors wrote.
Their conclusion? “It’s natural that a massive shock to working conditions like working from home would cause disagreements between employees and managers. … Organized hybrid raises employee and firm productivity. Managers and employees need to get on the same page.”
Read More Citing productivity, Silicon Valley companies are doubling down on their efforts to get employees back to the workplace.