Boston Business Journal: The implications of working without an office

In early 2020, the world began what is undoubtedly the largest work-from-home experiment in history. Now, as countries reopen but COVID-19 remains a major threat, organizations are wrestling with whether and how to have workers return to their offices. Business leaders need to be able to answer a number of 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 started surveying a diverse group of 680 U.S.-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.) Approximately half our respondents are women, and half are men; they hail from 43 states; nearly half are married; and more than a third have children. About 40% hold management positions. We’ve been asking them about their job satisfaction, work engagement, perceptions of their own performance, conflicts with colleagues, stress, negative emotions and current living situation, among other questions. We validated our initial findings through interviews with senior leaders of other organizations.

At the outset, many leaders of organizations we interviewed or who were quoted in the media anticipated that employee performance would significantly deteriorate. But the survey results indicate that workers quickly adjusted to working virtually; in many cases, workers felt they were just as productive as before. 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 across a global technology company 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 nearly 80% had been able to do so previously. These patterns have started to trend back to pre-lockdown levels, although the workdays are still 10% to 20% 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%. Employees have also experienced an approximately 10% improvement in self-efficacy and their capacity to pay attention to their work.

Comments made by everyone from front-line employees to CEOs revealed a slew of perceived benefits from working from home. One CEO told us 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” and “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. Those with children, however, 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 organization 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, Square 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, which research has shown leads to lower levels of trust. The decline in spontaneous communications and trust can undermine innovation and collaboration.

Virtual work could also undermine three other activities that are critical to long-term organizational health: onboarding new employees, creating “weak ties” and fostering relationships.

These considerations put organizations 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 minimize the spread of COVID-19 infections: mandatory wearing of masks, limits to how many people are in the office at any one time, shuttered pantries and meeting rooms, the physical separation of workstations. Several organizational leaders have shared with us that, in surveys of their employees, 70% or more workers 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 organizational leaders have found that a majority of workers would like to spend some 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. A number of organizations — including those that plan to allow all or much more of their staff to work remotely forever — are already taking steps to prepare for that day in four ways.

First, they’re conceptualizing 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 recognizing 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.”

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

We propose that organizations 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% of their workforces to have returned to their usual workplaces by September 2020, and another half anticipated that happening by January 2022. But if organizations 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.