Feature
Work from home has been a convenient scapegoat for CEOs to blame for everything from lack of innovation to low employee engagement.
- Elon Musk has called work from home “morally wrong.”
- JPMorgan Chase CEO Jamie Dimon said working from home is flawed.
- Nike CEO John Donahoe blamed the company’s lack of innovation and lack of new products on work from home.
- Google’s former CEO Eric Schmidt blamed work from home for the company's falling behind in AI innovation, but later walked back his comments.
“Google decided that work-life balance and going home early and working from home was more important than winning,” Schmidt said during a talk at Stanford University in July. The next day, he tried to walk back his comments stating, “I misspoke about Google and their work hours. I regret my error.”
Some Level of Remote Work Is Now the Norm
Despite these headline-grabbing gripes, nearly 70% of companies offer some type of hybrid or remote work. Only 31% of firms are full-time in the office, according to Flex Index.
“Working from home has become standard for employees with a university degree, with a hybrid schedule being the most popular,” said Nick Bloom, the William D. Eberle Professor in Economics at Stanford University.
Yet, despite the acceptance of remote work, work from home has become an easy scapegoat when CEOs and managers need to explain company performance. In fact, many managers are using return-to-office mandates to reassert control over employees, according to a recent University of Pittsburgh study of S&P 500 companies.
“CEOs say they don’t know if employees are working or walking their dog four hours a day but if workers are in the office, CEOs know their employees can’t be walking their dogs,” said Brian Elliott, an advisor, speaker and coauthor of "How the Future Works: Leading Flexible Teams to Do the Best Work of Their Lives." Yet, studies have shown that less than 10% of employees are goofing off when they work from home, he said.
Related Article: Return to Office Mandates: Layoffs in Sheep's Clothing
Hybrid Schedules Are Profitable
A hybrid work schedule has even less of an impact on employee performance than full-time remote. Bloom recently published a study in Nature that randomly assigned people to work from home on Wednesdays and Fridays while other participants were required to come into the office every day. “We followed them for six months, and we found absolutely no effect on performance — not positive, not negative,” he said.
Admittedly hybrid schedules make it more difficult to connect with colleagues or to find a mentor, Bloom said, but there are many positives. Employees don’t have to commute every day and that saves time and energy. It’s quieter at home so employees can concentrate more deeply, he said.
But the biggest upside to hybrid work is the quit rate for employees fell by 35%, Bloom said. Typically, it costs a company about $30,000 to $40,000 to rehire and train a replacement for each employee who leaves a company. “Hybrid has become dominant because it's profitable,” Bloom said. It has no impact on the performance, and it saves money on recruitment and retention.
Related Article: How Your Workplace Can Keep — and Keep Up With — Tomorrow's Employees
Fully Remote Offices Save on Costs
The CEOs who have been the most vocal about blaming work from home for their firm’s shortcomings are the CEOs leading companies that have been struggling a bit, Elliott said. Often the problem isn’t necessarily work from home, itself, but a company’s inability to bring employees together in a meaningful way, he said.
Bringing employees together at least once a quarter has big benefits and CEOs must find ways to make that happen and be willing to fund travel to get employees together, Elliott said. Successful companies are realizing there is real value in getting people together episodically for activities that blend business work with social time. The most successful off-sites are designed with a specific workplace goal such as team development, onboarding and training, a project kickoff or a special event for a function-specific role such as sales.
After the pandemic, several companies decided to shrink their square footage and use their net savings to develop meaningful offsite events, encourage employee engagement and provide better communications tools, Elliott said.
A full-remote office offers a massive upside, Bloom said. The company doesn't have to pay for offices, which are typically about 10% of the cost of somebody's salary, and it can hire globally. Fully remote companies often mitigate the downsides of work from home by scheduling engaging events every other month and by hiring more experienced employees, Bloom said. "If you're a fully remote firm, you generally don't hire 21-year-olds just out of college," he added.
Related Article: The Value and Limitations of Returning to the Office
Companies Are Reallocating Real Estate Money
Allstate cut its real estate spending in half and reallocated funds toward employee’s home offices. "Our philosophy in designing the future workplace … is focusing on the people, the real estate and the technology," said Megan Lenahan, HR communications senior manager, in an Allstate blog post. In a recent Allstate employee survey, 90% said they feel connected to their immediate team and of those who participated in targeted connection events, 91% were satisfied with the event.
Zillow believes its move toward a “Cloud HQ” gives the company a recruiting advantage because it can attract a larger pool and a more diverse set of job applicants.
Meanwhile, outdoor gear brand Cotopaxi, a remote-first company, is investing money in an annual “summer camp” to allow employees from its distribution center, its remote workforce and its small Salt Lake City office to come together for three days of adventure and bonding, and to remind employees of their shared purpose and impact.
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If It's Good for a CEO ...
The experience former Google CEO Schmidt had leading start-ups is now somewhat anachronistic. “He's looking back to an era of 10 or 15 years ago and he's correct, 10 or 15 years ago, all these start-ups were started probably in somebody's garage, but that just isn't the world of now,” Bloom said.
Even the new Starbucks CEO is getting to work remotely, Elliott noted. Brian Niccol, the former Chipotle CEO, will be working a hybrid schedule between the Seattle headquarters and a new remote office in Newport Beach, Calif., where Niccol lives.
