I have posted this on Reddit (askeconomics) a while back but got no good replies. Copying it here because I don’t want to send traffic to Reddit.
What do you think?
I see a big push to take employees back to the office. I personally don’t mind either working remote or in the office, but I think big companies tend to think rationally in terms of cost/benefit and I haven’t seen a convincing explanation yet of why they are so keen to have everyone back.
If remote work was just as productive as in-person, a remote-only company could use it to be more efficient than their work-in-office competitors, so I assume there’s no conclusive evidence that this is the case. But I haven’t seen conclusive evidence of the contrary either, and I think employers would have good reason to trumpet any findings at least internally to their employees (“we’ve seen KPI so-and-so drop with everyone working from home” or “project X was severely delayed by lack of in-person coordination” wouldn’t make everyone happy to return in presence, but at least it would make a good argument for a manager to explain to their team)
Instead, all I keep hearing is inspirational wish-wash like “we value the power of working together”. Which is fine, but why are we valuing it more than the cost of office space?
On the side of employees, I often see arguments like “these companies made a big investment in offices and now they don’t want to look stupid by leaving them empty”. But all these large companies have spent billions to acquire smaller companies/products and dropped them without a second thought. I can’t believe the same companies would now be so sentimentally attached to office buildings if it made any economic sense to close them.
As an anecdote, I work at a midsized software company as a product manager. I have an international team of about 20 that I manage from home (full-time remote). Overall there is some loss of speed and agility versus having a full-time in-office staff. I’m not a fan of trying to quantify productivity per se, but for things like estimations and deviations there’s no question that in my environment at least, things move a little slower and take a little longer. Now personally, the fact that we can hire engineers anywhere across the globe (including in LCOL areas), don’t have to pay rent and related fees, and that some of the best engineers specifically want full-time remote more than outweighs the reduced agility (putting aside all of the other potential QOL benefits) – and if needed, some of the savings from reduced rent and salaries could be used to expand the team anyway. Thankfully my management team agrees and has continued to pursue a remote/hybrid environment. But for those places that value speed and agility most it could be a bit of a problem.
I’ve been helping a Chinese company and it includes getting on the phone at 9am to talk to them right as they’re leaving the office. For an international team there can be time zone issues like that, but if you can find overlap between Europe and China then you can find overlap between anywhere
I am no exoert
But i have read of 2 reasons.
1: the boss thinks people who sit at home, are lazy and get nothing done. When they are in the office he can keep an eye on them!
2: nobody using their expensive office buildings means waste of rent money. Not wanting to let that go to waste… makes sense. Inviting potential clients to your empty offices would also seem awkward.
Im sure there could be more reasons…
It’s always good to step back from “companies” and think of companies as just a bunch of people.
Is it good for companies to force employees back to the office? Nah, probably not. Is it good for the guy who has to explain why he signed a 10-year lease on all that office space, and now it’s sitting empty? Yup. Is it good for the lonely manager who wants to be surrounded by people, and has the power to make that happen? Yup. Is it good for the exec who has to find some reason why his department is underperforming, and decides remote work is a good scapegoat? Ehhh….
My hunch is that we’re seeing an influence campaign by people who own lots of commercial real estate swaying bosses. I don’t have any actual info about who owns or has a stake in commercial real estate, but my gut tells me it’s likely to be really wealthy businesspeople who a bunch of CEOs probably look up to/play golf with/whatever.
First, a lot of studies have shown the productivity boost for WFH may not be uniform or actually exist. Whether the possible productivity boost is worth the money on office space hasn’t been answered, it is likely more in that gray area than WFH proponents want it to be.
Second, while generic work productivity is about the same level, teaching new skills isn’t. We have data showing educating from home has been worse for students, and that seems to be filtering into the office place. Junior staff aren’t picking up skills fast enough and are probably a major reason why WFH productivity measures are lower than expected. It isn’t because new staff are lazy, just that they have fewer people to ask questions to and don’t ask as many questions in general.
Third, building and maintaining a work network has fallen apart. People don’t know others in an office, which can be a problem in flat company structures where communication is not expected to go through the boss only. So you have people who feel like they are doing productive work, but aren’t talking to others. This can cause a lot of rework that the managers see in slipping deadlines.
That said, the answer seems to be hybrid for these jobs as workers won’t tolerate full time in the office anymore. However, hybrid has been a clusterfuck in a lot of companies because the hybrid model is new and not everyone knows how to manage to it.
while generic work productivity is about the same level, teaching new skills isn’t.
As someone who did his last year of college and first two years of career from home this is spot on. My senior simply refused to teach me anything, or even answering my chats and my manager didn’t care. I had to learn doing inverse engineering on the excel files because I cannot even sit at his side and saw him work ans learn. I changed companies a month ago to a full-time in office position and I’m learning more in this month that what I did on the past two years (its also helps that my new manager is also a college professor and have like 40 years of industry experience).
There is the wonder why hold value on office space ersus the smaller companies that are bought and dropped with no sentimental value. The big difference there is that purchasing out a company doesn’t usually come with a years-long agreement to keep it in place, use the products, etc. Office space has that. A years-long agreement to use the space and pay for the use. And to drop the use before the agreement is done costs more than it’s worth. And it’s even worse for a company that owns property. It costs money to keep the office space usable, money that comes from leases. If someone is going to back out of a lease, the owner of a building now has to pull from other sources of money to upkeep a building.
I know developers have spent years building and growing office buildings and regions to put said office buildings, and now a massive push to work remotely makes all that effort not just for nothing, but a very costly nothing. And then there is the secondary economy around office buildings. Many stores and restaurants spring up where there are plenty of people working. If there are no people, no reason for those businesses. I used to work in a downtown area with plenty of restaurants that I would eat at. Now that I don’t work there, I don’t eat at those restaurants anymore.
The push and call for remote work is going to change literal landscapes in cities and industrial regions in ways we cannot predict, or prevent.
Correct, my (large) company was literally getting bullied in the newspaper for no longer "contributing to the local economy by letting its employees work from home*.
Remote work threatens the status quo.
What status quo are we talking about? Sorry, my English sucks…
One of the ways big, established companies look at change is this: “will this change make it easier or harder for new competitors to enter our market and take some of our business?”. Depending on the answer, big players will ask for that change or will oppose it (and try to maintain the “status quo”, I.e. things the way they already are).
In other words, what is called the “barrier to entry” for new competitors must be as high as possible.
For instance, when OpenAI’s CEO started giving interviews on how dangerous AI like their own ChatGPT is and calling for more regulations, they are probably doing it to make it more difficult for new AI companies to enter the market and close the gap with them.
So, with that in mind, how would a big company view WFH? if a company already owns an office that they can’t easily take off of their balance sheets and remote working can now be an effective, cheaper alternative, then a new competitor could enter the market and do what your company does at a cheaper cost (not having the office cost). WFH is a chamge that lowers the barrier to entry, so big companies will tend to oppose it (or at least delay it)
I think they are referring to making employees miserable. Remote work has been very beneficial for employees. More time with family, more flexibility, and you don’t have a manager breathing down your neck constantly. So employers want the control back.
Then there is also political pressure from local governments who are feeling the pinch from reduced taxes in their districts. Got to bring people back to the office so they spend money in the district.
Well, something like this.
Oh, I like this! I’ve felt for such a long time that we actually can’t do all the normal ‘living’ inside those 8 hours, especially if you don’t include commute in your work time. It takes many people an hour or two of commuting a day. I had a job where I could do other things as well during my work time and I feel like I was much more relaxed then.
Also, many of us sometimes cut into the sleep time to get extra space to finish our chores or other things we want or need to do, but that just wreaks havoc for our health.
I haven’t had a normal job since before covid so i’m not super qualified, but:
I think big companies tend to think rationally in terms of cost/benefit
I think they sometimes do, but not always. The reason being that companies are made of people, and people sometimes but not always think rationally.
In this case, my guess is middle management may be fretting about leaving employees unsupervised. What if they play games or browse Twitter on company time? You can’t monitor them when they’re not in the office!
Inspirational wish-wash like “we value the power of working together” strikes me as common corporate wish-wash. It’s sort of along the lines of “we’re a family here”. They’re trying to make employees emotionally invested in the corpo so they’ll put up with more bullshit.
Well yes, I do feel we might have collectively given more thought to this here than my company has…
It’s just that I work in one of those places where a trivial change that our users are asking for requires a business case and endless discussion, so it’s weird to think that a big, life-changing decision like this would just be taken without a particularly strong motivation.
But maybe I’m just starting from the wrong premise here. The purpose of the business case is for us little guys to obtain buy-in from the top management, but if a decision comes directly from the top management they don’t need much more than their own gut feelings?
Maybe especially so if they have to make a decision based on an unprecedented situation with no data and no guidance from what other companies have done before.I can see how the least risky bet would seem returning to the previous, proven situation where most people were working in the office.
Oh yeah, power in a corporation goes top down, and it figures that top management likes it that way.
There’s definitely safety to be found in the familiar, i do it a lot, whenever i have to do something unfamiliar i will often let myself get overwhelmed trying to consider all the tiny implications. Eventually though the experience from early adopters will enlighten other companies. It’s a lot easier to take a decision like this when other people have done it and you have data to see what the results were. In the case of work from home, this process is already well underway, it’s been three years since covid and there’s already a lot of data that you can point to.
Same reason they all had layoffs at the same time; activist investors want them to. Probably because these investors own a lot of commercial real estate as well.
Also, it’s probably a good way for them to reduce their workforce without publicly announcing layoffs.
I work 95% remote, and I’ll be the first to admit, there is value in working physically close to your teammates. Discussion and camaraderie can happen organically, which allows people to better understand each others’ strengths. There are also fewer things to distract you, and the reality is that many people these days are experiencing a sort of internet-induced ADHD, so being in an office can make it easier to concentrate. All of this allows you to be and feel more productive.
That’s the best argument I’ve got, but I wouldn’t mandate it on anyone. The only people mandating working from office are people who are insecure with their workforce and hiring methodologies. They don’t trust their workers to do the job, so they feel the need to micromanage their workers like children. If you’re a manager, and you don’t feel like you can trust your employees, you’ve already lost.
I think it should be on a case-by-case basis. I’m in the legal field, and there’s definitely days I don’t need to be in the office as almost all of our work is online now. State and federal mandatory efiling, e-discovery is online, and even our document management system is headed to the cloud, so no need for remoting in, just log into Microsoft 365 from any browser. Don’t even need to own any Microsoft apps natively anymore.
On the other hand, there are days that I do need to be in the office: depositions and prepping witnesses, trial preparedness, and sometimes, you just need to touch base with everyone to see how things are going. I work in securities litigation, and those are frequently very complex, document and fact intensive cases.
We have a entire practices that are 100% remote now. The partners are either elderly, or they live far away from the office and were hybrid remote before the pandemic. The paralegal that works with those attorneys is also 100% remote.
Lastly, I am much more productive at home than in the office. I do not have ADHD, and do not have a problem with attention, and do not get distracted easily. On the other hand, I’m an introvert, and really loathe the interpersonal nonsense and constant interruptions of ppl barging into my office, more often enough that just to chat. Last month, I had to do a major document review of going through 10s of thousands of emails, and to just plow through that at home, comfy in my bed, where my bathroom is just a few steps away, made me so much more productive than being stuck in the office.
I can tell you from experience, there is nothing more distracting than having your manager walk up behind you and tap you on the shoulder while you’re working on code. While this problem doesn’t go away completely with remote work, at least you have time to compose yourself and bookmark your work before you respond
I haven’t had a manager that makes a habit out of that, that’s a no no. If someone is in the zone, you don’t mess with em. We did have Do Not Disturb signs we could put up, but I never felt the need.
Thanks for the article, interesting read!
“Many companies are realizing they could have been a lot more measured in their approach, rather than making big, bold, very controversial decisions based on executives’ opinions rather
than employeedata,” Larry Gadea, Envoy’s CEO and founder, tells CNBC Make It.Yeah, business as usual (added the
strike)
Because they don’t trust us. They want to take control and monitor everything we do during the work hours.
Look: a lot of companies would suffer from an office real estate crash.
- the businesses that own the office real estate
- car manufacturers
- tire manufacturers
- petroleum companies
- coffee franchises
- fast food franchises lining freeways on the way to work
And most importantly, funds invested in all of the above.
People who own businesses also own stocks in other people’s businesses. Meaning they all fall and rise together. Trying to keep the “work commute” and “office rental” industries alive is just an attempt on the part of those who hold capital to keep their portfolios growing.
In secret, they are probably also trying to hedge their bets, diversify and make themselves immune to the coming collapse. They’ll try to position themselves and their capital in such a way so that the working class is the only group hurt when it happens.
But in public? They are not going to devalue their assets by standing by, complacent, as an office apocalypse approaches.
Yup. A lot of companies benefiting off the inefficiency of commuting.
Office real estate would crumble as a market. Even though the world would be better repurposing office buildings, the number must go up.
They took the risks, in hopes of higher rewards. They want the rewards without the risk.
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Companies that overhired the last few years might just wanna increase the attrition rates without explicitly saying so.
