The Covid-19 pandemic, which brought the world to a standstill, significantly made us evaluate alternative arrangements to earlier ways of working, especially in terms of spatial considerations. Hence started the “new normal” of working from home.With WFH as the norm now, and managers’ haste in resuming centralized operations, a tussle has emerged between the “new” and “normal” modes of working. Managers must reevaluate back-to-office mandates, and devise new techniques to assess the productivity of employees in flexible settings.
The year 2020 saw almost all businesses transition their operations to either fully remote or partially remote (hybrid) settings, which required great efforts and new technological arrangements to be made by managers worldwide, and subsequent adaptation of these by the employees. Then as the pandemic eased and state imposed lockdown restrictions lifted, it was time to reopen offices. Yet, on this point, some reluctance has been reported on the employees’ part, while managers have at times been overly keen to resume operations in physical settings.
In this vein, several companies initially declared hurried back-to-office guidelines. However, in most cases, the employees were not entirely onboard. Amazon infamously, in October 2023, authorized its executives to fire employees who do not attend office at least thrice per week. In January 2024, IBM issued a strict policy for managers to relocate within 50 miles (80 kilometers) of an IBM office location by August, or find employment elsewhere.
Interestingly, this reversed a previous statement by IBM CEO Arvind Krishna from May 2023 that he wouldn’t be forcing, only encouraging, his staff to come back to office. Even then, he made sure to mention how remote workers may find it hard to get promoted to managerial posts. Managers are increasingly feeling concerned about allowing work away from direct supervision, which they fear leads to shirking. However, a body of research growing by the day is showing us that such views on productivity in WFH arrangements are misguided.
Irrespective of location, people have shown up and delivered on expectations. A research study by the Katz Graduate School of Business at the University of Pittsburgh published in December 2023 analyzed the factors behind and results of return-to-office or RTO mandates announced by 137 out of S&P 500 American firms. They found that not only did these mandates not improve performance, profitability or stock market valuation, they in fact also led employee satisfaction ratings on work-life balance, cultural values and senior management to decline drastically.
For employees, WFH saves commuting time as well as expenses. Amid a threat of looming recession, some employers have understood employees’ apprehensions and have offered incentives that would save extra spending. London-based company PwC is giving its employees an extra £1,000 for commuting to office, while Goldman Sachs offers free breakfast and lunch to employees. However, concerns remain around workforce diversity and continued commitment to inclusion of people with disabilities, single parents, and those hailing from far-off regions for whom it might be technically or financially impossible to relocate.
Although, some managers also want employees to work remotely as it helps curtail office rental costs. Yet, reports suggest that over time some may start to feel disengaged from work, or disconnected from the values and culture of the organization and lose the motivation to put in the efforts for achieving best results. Upon a close look into an unnamed Fortune 500 company, economists at New York Fed found that working close with others fosters mentorship, and learning on the job. In the remote model, the company started hiring more qualified workers since the proximity required for mentee training.
Moreover, employees remain anxious that WFH will slowen their promotion trajectory. Fortune reported that in a randomized control trial by economist Nick Bloom, programmers working hybrid showed 4.4% increase in productivity, fewer sick days, and 33% higher retention. Yet, no congruous effect was noted on employee assessments or promotions. Managers like Arvind Krishna have said that remote workers barely learn skills like dealing with difficult clients, which can only be experienced in-person. Also, “nobody’s observing them in another context”.
While this is certainly true of some jobs like sales, although experts say this belief may be skewed since WFH productivity often goes overlooked due to what they call “proximity bias”. Indeed, managers must be trained in new parameters to fairly assess WFH, for deserving performances to continue to be duly recognized and awarded with promotions. Companies like Meta and Amazon which failed to sufficiently train their managers in this regard ended up overturning their initial flexible work policies. In a study by Stanford scholars, they received anecdotal evidence of employees only coming back to office to avoid the WFH “penalty” on their promotional prospects.
Indeed with the global economic instability, and widespread layoffs happening, employers carry a lot of leverage at present when it comes to making demanding things from workers. Even people who were earlier completely resisting back-to-office policies have had to consider returning for looming concerns of survival and growth. Yet the process has not been without its bumps, especially in cases when the employees have not been willing. Still, we remain hopeful and are on the lookout for further trends emerging in this debate.