Companies rethink the office as pandemic shifts dial on working from home

Companies are rethinking the office to become the add-on space for workers, not the default setting.

Frontline employees and CEOs are seeing benefits from working from home.

Early this year, the world began the largest work-from-home experiment in history. Now, as countries reopen — but COVID-19 remains a major threat — organisations are wrestling with whether, and how, to have workers return to their offices.

Business leaders need to be able to answer several questions to make these decisions. Primary among them is: “What impact has working from home had on productivity and creativity?”

To help answer that question, we began surveying a diverse group of 680 US-based white-collar employees during the second half of March and have continued to do so every two weeks since then. (This article is based on results collected through May.)

The gender split for respondents is 50-50 from 43 states. Almost half are married and more than a third have children. About 40 per cent are in management.

We’ve been asking them about their job satisfaction, work engagement, perceptions of their own performance, conflicts with colleagues, stress, negative emotions and their living situation, among other questions.

We validated our initial findings through interviews with senior leaders of other organisations.

At the outset, many leaders anticipated that employee performance would significantly deter­iorate. But the survey results indicate that workers quickly adjusted to working virtually; in many cases, they felt just as productive as previously.

Job satisfaction and engagement fell sharply after two weeks of working virtually, but they recovered sharply by the end of the second month.

Turning off work at home has proved especially tough. An examination of data by Humanyze from email, chat and calendar systems supports our survey results. It revealed that, in the weeks immediately after the lockdown began, only half of employees were able to maintain a 10-hour workday or less, whereas almost 80 per cent had been able to do so previously. These patterns have started to trend back to pre-lockdown levels, although the workdays are still 10-20 per cent longer on average.

Since all-virtual work began, employee stress, negative emotions and task-related conflict have all been steadily falling; each is down at least 10 per cent. Employees have also experienced about a 10 per cent improvement in self-efficacy and their capacity to pay attention to their work.

Comments made by everyone from frontline employees to CEOs revealed a slew of perceived benefits from working from home.

One CEO said he “hoped this put an end to the ‘fly-across-the- country-for-a-one-hour-meeting’ expectation forever”. Others reported that they had “more focus time”, “shorter meetings”, “more flexible time with family” and, most commonly, were “not missing the daily commute”. By the eighth week, many employees reported getting “into the groove of working from home” and “wanting to continue” working virtually. Several even said “I love it”.

Household circumstances mattered. Over time, those with spouses seemed to be able to better manage stress stemming from working virtually. However, those with children fared worse.

History is littered with failed work-from-home experiments. Why do employees seem to be adjusting better now? We observed two key distinctions: This time, everyone in an organisation had to do it, and they collectively strove to figure out how to overcome the challenges.

Why, then, not stay virtual — or at least join the ranks of tech companies such as Twitter and Facebook, which have announced that they are making working from home a permanent option?

One reason is the loss of unplanned interactions. Physical offices cause people who don’t normally work with each other to connect accidentally, and that interaction sparks new ideas.

There also tends to be less schmoozing and small talk among virtual workers. As well, the decline in spontaneous communications can undermine innovation and collaboration. Virtual work could also undermine three other activities that are critical to long-term organisational health: onboarding new employees, creating “weak ties”, and fostering relationships. These considerations put organisations in a pickle.

Many are considering hybrid work environments — a combination of virtual and office-based work. This approach, however, threatens to produce the worst of both worlds, given the ways in which offices and workforces are being reconfigured to minimise the spread of COVID-19 infections: the mandatory wearing of masks, limits to how many people are in the office at any one time, shuttered pantries and meeting rooms, and the physical separation of workstations.

Several leaders have shared with us that, in surveys of their employees, 70 per cent or more consistently said they would rather continue to work from home than go into reconfigured offices and be required to wear masks.

But more broadly, most leaders have found that a majority of workers would like to spend time in the office once things return to what they were: no masks, open meeting rooms and pantries, people close enough to each other to talk without yelling, group gatherings and serendipitous encounters.

Several organisations are already taking steps to prepare for that day in four ways.

First, they’re conceptualising office space as an add-on to virtual work, as opposed to the default for where people work. This is permitting them to substantially reduce their real estate footprint and cost and refocus the purpose of physical spaces on what they uniquely offer: the ability to create weak ties and serendipitous conversations.

Second, they’re requiring leaders to substantially increase investments in communication to provide more clarity for employees, removing the ambiguity that can cause people to spin their wheels.

Third, they’re recognising that proportions and fairness matter. If hybrid work environments create two tiers of employees (e.g., those who are in the office and those who are not, or those who have the ability to informally interact with senior leaders and those who do not), virtual employees risk becoming a “lower class”.

Fourthly, they’re helping employees “build both work-from-home and work-from-office muscles” and “share the realities — the advantages and disadvantages — of each,” says Gale King, executive vice-president and chief administrative officer of the Nationwide insurance company.

We propose that organisations can, and should, build on their success thus far. When canvassed by Fortune in the last two weeks of April, a quarter of the Fortune 500 CEOs who responded said they expected 90 per cent of their workforces to have returned to their usual workplaces by this month, and another half anticipated that happening by January 2022. But if organisations can continue to improve the effectiveness of virtual work and solve the problems of both virtual and hybrid work, the quarter of the CEOs who answered “never” may turn out to be the most sagacious.

Ethan Bernstein is an associate professor at Harvard Business School. Co-written by: Hayley Blunden (doctoral student); Andrew Brodsky (University of Texas at Austin); Wonbin Sohn (doctoral student); Ben Waber (president of Humanyze).

© Harvard Business Review/Distributed by New York Times Syndicate.