Is there a future for the office?

The complicated calculus of remote work

Author Peter Cappelli next to his book, The Future of the Office

At its core, remote work represents a different way of thinking about office work.

Wharton School Press

This essay was adapted from The Future of the Office: Work from Home, Remote Work, and the Hard Choices We All Face, by Peter Cappelli, copyright 2021. Reprinted by permission of Wharton School Press.

The profound question about working from home during the pandemic is whether it suggests that our office orientation for the past 100 or so years has largely been a giant waste of money and time, and that we would have been better off sending employees home to work and saving money on offices and real estate. It is hard to sustain that conclusion given what we know about how remote work operated outside of the system-wide COVID-19 shutdown. Pulling together in a crisis, empowering and trusting employees, was something unique then and likely mattered a great deal, as did the benefit of being able to keep our jobs, do them safely, and take care of our families at a time when many workers did not have that option.

The danger is that leaders will draw the conclusion that offices don't matter, where their priority is just to cut costs, in both real estate and possibly wages. Whether it is possible to repeat our work-from-home performance during the pandemic in a more normal context is an open question. Doing so seems to require a lot more from management than simply sending employees home.

At its core, remote work represents a different way of thinking about office work. We have a lot of experience with the office model, but to paraphrase the writer Rudyard Kipling, those who know only the office know not the office. The comparison with more than a year of remote work has brought it into clearer focus. The fundamental question for employers is, What kind of organization do we want to be?

What typifies a good office working environment includes the following:

  • A strong culture: We can learn what to do by watching and listening to leaders, and we can also take cues on how to behave from the architecture in well-designed offices. We learn it formally through onboarding programs.
  • High chances of interaction and learning: We can get questions answered and spark ideas through informal interactions.
  • Control over effort: Social pressure to perform is greater, because we see more of what other people are accomplishing and also how hard they are working.
  • Good information on context: We can see whether a particular initiative is important, including informally, from lots of channels, not just approved ones.

The downside is that it's expensive to maintain offices, and commuting to them involves some effort for most employees. Managing employees in the office can be a lot of work, and some of that falls to executives, especially on issues like organizational culture. Many issues that come up, such as perceived inequities, are more common where people work in proximity.

We also have a better idea now of what work-from-home means in comparison with offices. The following are pluses of work- from-home:

  • Savings for employers: From real estate to associated office perks and even travel, organizations can cut costs.
  • Hiring advantages: Remote work may be a competitive advantage in hiring and retention, assuming other employers don't adopt the same practices.
  • Savings for employees: Employees who work at home will not have commuting costs, they will not have to update their work attire, and they will go out to lunch less.
  • More flexibility for employees: Especially for permanent remote work, employees have more choices as to where they live. Even part-time remote work expands the distance from which we can commute when we need to be in the office. Being able to be home more provides opportunities to solve some work-life challenges.

The downside is that remote employees will lose out compared with those on-site. Workplaces with remote work have less connection to colleagues, lower engagement, less commitment to the organization, and more social isolation. Employers likely have less control over the behavior of employees and their work attitudes. There are fewer opportunities for informal learning and development.

Each extreme requires quite different supporting practices. The biggest mistake is to lean toward one model or the other and not have the practices in place that could make it work.

A serious attempt to run an effective office operation not only requires spending money on real estate and office overhead but also requires effort from managers to make use of the flexible nature of employment, to redirect employees when requirements change, to shape their discretionary effort to get them to act in the interest of the organization, and to manage their interactions to create innovation or other benefits. Employee engagement and commitment to the organization is built in large part on personal ties to peers and leaders, something that happens more naturally in an office setting. If this works well, the sum can truly be greater than the whole of the parts and greater than what individuals could achieve on their own.

The all-remote model is almost the opposite. It is more of a stripped-down model of management that makes it harder to rely on organizational culture and personal ties. Compared with those in the office, remote employees are left alone much more. We specify in advance and in great detail what we want them to do, then wait to see if they do it. The challenge with this is that to make it work effectively requires a lot of trust. The employer has to empower the remote employees to do what needs to be done and figure out when to get it done.

There is much more potential for failure in remote-heavy arrangements. Disengaged employees who do not care about the organization have much more scope to cause damage. It is possible to keep social ties with remote workers, but it requires more purposeful effort. It does not happen naturally. The fact that it was more difficult to micromanage employees working from home during the pandemic created empowerment by default in many organizations, something we should acknowledge and try to replicate.

It is tempting to substitute monitoring employees as a means of ensuring their compliance and performance. As noted above, this is likely to backfire, defeating the flexibility that makes working from home attractive, causing resentment, and reducing the inclination of employees to look out for the organization. Unless employers put in extra effort with remote workers, I suspect they will slide toward a low-trust environment, then to monitoring employees, and eventually to making those remote workers contractors.

I'll leave you with a cautionary tale from the French company Teleperformance. In early 2021, it was reported that the company, with 380,000 employees across 34 countries, is setting up a system to take random scans from webcams to see what its remote employees are doing, a classic low-trust approach. If employees need a break, they will need to enter "break mode" and explain why. They cannot eat during their shift.

This is likely not the experience both employees and employers want to continue in any future—remote, hybrid, or in-office. But with some work, we can all make a better experience for whatever "new normal" we decide.

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