You’re more productive in the office, say elite CEOs. Data seems to back them up. – DIGIWIZ CENTRAL

You’re more productive in the office, say elite CEOs. Data seems to back them up.

Goldman Sachs CEO David Solomon. The bank has encouraged workers to return 5 days a week to the office.

Crains New York

The idea of permanent remote work is slipping away.Bosses of firms like Meta and Goldman Sachs are ordering employees back to the office most days.Authors of some of the top WFH studies suggest they are right — on some measures.

The work-from-anywhere era is over.

After almost three years of relaxed work-from-home policies, CEOs are starting to drag their remote employees back to the office most days of the week.

“Companies have realized what they’re losing from not having people showing up at the office,” Michael Gibbs, an economics professor at the University of Chicago, told Insider.

“They’ve had enough time now trying this experiment to realize that they went too far with working from home and need to re-strike the balance.”

Major companies began announcing return-to-office policies late last year, and in recent months the rhetoric has started to heat up.

Amazon has made it mandatory for workers to show up to an office three times a week; Goldman Sachs is pressuring staff to return full-time, and Meta has said employees might lose their jobs if they don’t turn up to the office three days a week.

CEOs have been citing vague reasons for the shift. Meta boss Mark Zuckerberg said early-career engineers tend to perform better when in the office three days a week, citing internal “performance data” that the firm has not made public.

And Amazon’s Andy Jassy described the company’s push to get workers back as a “judgment” call based on internal leadership conversations and conversations with 60 to 80 other CEOs. He avoided questions on what data the decision was based on during an internal fireside chat.

But are they right?

The CEO case against working from home forever

Some early studies suggested that working from home had a minimal or even positive impact, with one from Harvard Business School finding that it boosted productivity by 4.4%.

More recent studies cast doubt on these early analyses, finding that workers are more distractible at home.

A University of Chicago study, published February, which collected data from over 10,000 skilled professionals at an Indian IT company during the height of the pandemic, found that worker productivity decreased 8% to 19% amongst staff working from home, even as the number of hours worked increased.

“We found a dramatic decline in productivity, not just immediately when the pandemic hit, but throughout the entire period,” Gibbs, one of the authors of the study, said.

He says employee “focus time,” the amount of time they spent per day working uninterrupted, fell dramatically, despite both the company and its employees being ideally suited to make the adjustment to home working in terms of capabilities and equipment.

Another study published in July by the National Bureau of Economic Research similarly found that the productivity of workers randomly assigned to work from home was 18% lower than their in-office counterparts. The study assessed around 200 data-entry workers in the Indian city of Chennai.

“We did find there was an increase in idle time and a greater risk of distraction,” David Atkin, one of the study’s authors and a professor of economics at MIT told Insider.

“What we found was that the people who were most likely to say they’d like to work from home were the people who, when they worked from home compared to the office, were even less productive,” he said.

Both the studies also suggested working from home made collaboration and communication more difficult.

“Often some of the most innovative interactions between people come when you’re at the water cooler, hanging out in the office, or bumping into each other in the lunch line,” said David Atkin.

But, but, but

The bosses who see face time as a stand-in for productivity have cited many of the above arguments.

But the pandemic wrought such a dramatic change on our working lives that even the experts agree there’s no going back, and a full reversion might damage businesses in other ways.

“Employees really care about flexibility, so return-to-office mandates come across as top-down and insensitive,” said Raj Choudhury, a professor at Harvard Business School. A company’s lack of flexible working will also make it harder to attract talent, he added, especially diverse talent.

“People may have rearranged their lives quite drastically around the ability to work from home,” added Atkin. “You could imagine there being a lot of resistance to changing that. It’s often very senior people who have made these changes to their lives, not typically 25-year-olds just arriving at the company. These are the people with a lot of bargaining power.”

A poll this year from The Washington Post and Ipsos found that more than half of US workers who are fully remote would be willing to take a pay cut rather than return to the office.

The concept of productivity itself is also hazy, and could be influenced by how helpful a company was when workers went remote.

“Productivity in one company is not comparable to the productivity measurement in a different company,” Choudhury said, adding that results might depend on a firm’s management practices to support hybrid working.

“You can’t compare productivity or just look at productivity without also looking at what kinds of hybrid arrangements are in place,” he said. “There’ll be good hybrid and terrible hybrid.”

The remote work genie is out of the bottle

Influential remote work researchers, including Stanford researcher Nicholas Bloom, have been backing a flexible, hybrid approach as the way forward. Bloom previously told Insider that well-organized hybrid work is a “win-win” for companies and workers.

Everyone else Insider spoke to agreed, though some said even hybrid was likely less productive than being fully in the office.

“I definitely think that five years down the line hybrid will be the default,” Choudhury said. “We’ll probably not even debate that anymore.”

He added that the few high-profile examples of return-to-office mandates had been overplayed in the media.

“The reality on the ground is that WFH has been very stable for at least a year,” said Jose Maria Barrero, an economist and cofounder of WFH Research, which tracks US working-from-home levels. “My guess is most employees at most of those companies have been de-facto in a hybrid mode for a while, and companies are mostly just formalizing that reality.”

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