There is Much Unknown about Work from Home as a Permanent Change

Nobody yet knows how much office work might change, post-Covid, on a permanent basis  though there is clear evidence larger firms are rethinking their needs for office space and the amount of work from home that should be the new pattern. Most surveys suggest workers want much more freedom to work from home. 

Along the way, managers will have to answer questions about why they need office space, and where its value might be found. To the extent that company culture matters, the office Is a place for new hires to learn that. 

Some managers might find offices a better way to supervise at least some workers. At least some of the time, when brainstorming or collaboration is an important part of work processes, offices can be a platform for collaboration. 

In other cases, when work is largely solitary (writing, coding, thinking), offices can be a clear hindrance. And many work teams or collaborative processes are only collaborative some of the time. 

Perhaps the better way to frame questions is to ask when virtual and when physical workspaces have value. And we might be able to learn much by looking at how we have tried to answer such questions in the past.

Redesign of office environments has not always worked. The move to “open” spaces and away from fixed internal spaces or cubicles was supposed to increase interaction and the potential for collaboration. Results are mixed. 

Especially in environments where workers spend most of the day online, they are not collaborating. They might as well be working virtually. Worse, open plans essentially turn a supposed feature (opportunity for collaboration or interaction) into a bug (distractions that require workers to don headphones. 

The value of venues intended to facilitate collaboration turns into the opposite. So the issue is when human, face-to-face connection adds value, and when it does not. 

Consider just one small anecdote. As part of my own work I moderate conference panels and sessions. Recently we have had to switch to doing so virtually, remotely and using video conference platforms. 

There are some subtle differences. I find that panelists are less interactive with each other than when they are seated next to each other on a stage. As video conference etiquette requires more discipline in terms of speaking, I find guests tend to “hang back and wait” more than when they are live and in person. 

Perhaps it is a subtlety, but the video conference format--though still providing a chance for each panelist to speak--does not seem to have the free-flowing, more-interactive nature of a live session. It is less a “collaboration,” where speakers respond freely to each other, and more structured, such as a linear set of presentations. 

The questions for virtual or physical; office versus “work from anywhere” are somewhat similar. Can enculturation of new employees be as effective? Can important non-planned collaboration still happen? And what is the impact on productivity--and life balance--for workers at home, when small children are also at home? 

In some cases, time zones can be a bigger challenge for remote than physical collaboration, as well. It might be more expensive and time-consuming, but getting a global team together physically might be the only way to get everyone together at once. 

In fully virtual settings, it is possible that colleagues in satellite offices might feel more engaged with the former “headquarters-based” colleagues. The issue with hybrid approaches is that firms risk jeopardizing that value. 

Also, office space imposes costs. So reducing the amount of office space might have financial benefits that outweigh even drops in productivity or some potential gains from informal and unplanned in-office interactions. Productivity matters, but so do other inputs into the business model. 

And then there is the challenge of measuring productivity, which is much more complicated than measuring quantitative inputs. Output is what matters for most firms. So how far towards zero can management supervision go? Clearly, some people, and some tasks are more amenable. 

You might be shocked at the hours worked by technology professionals when remote, though what it means in terms of productivity is not clear. One conclusion from the data might be that in-office environments create so much inefficiency that workers get all their in-office work done in far less time. 

The other possible conclusion is that at-home distractions are greater than we generally suppose, or that people are notoriously unable to accurately report their work time. Nor is there any easy way to measure qualitative outcomes, compared to inputs. 

On the other hand, a few firms have reversed ubiquitous work-from-home rules precisely because firms profits were dropping, and lessened collaboration was viewed as among the reasons. Yahoo and IBM have done so, in the past. Citi management worries about productivity as well. 

Nefflix CEO Reed Hastings has said work from home is a pure negative.   

Though it is too early to say for certain, hybrid patterns might not be the best choice for many firms, unless ways can be found to dramatically, and relatively quickly, shed excess physical assets. 

If not, a “worst of all worlds” outcome is possible: all the costs of the physical infrastructure, now converted into a stranded asset, plus all the costs of remote work (different information technology and whatever productivity impacts might occur).