Debate Over Remote Work Continues As Offices Begin To Reopen

Life Annuity Specialist recently mentioned Humanyze and co-founder, Ben Waber in an article by Charlotte Zimmer. Zimmer discusses the opposing views on whether remote work is beneficial to the overall organization’s productivity. Read the full article below:

As in-person work becomes a possibility again, some company leaders are insisting on a full return to the office, and there may be some evidence to support them.

James Gorman, the CEO of Morgan Stanley, recently announced that all company employees should return to the office by Labor Day. He noted that if people can go to restaurants in New York, then they can come into the office.

At the Wall Street Journal’s CEO summit in May, Jamie Dimon, CEO of JP Morgan Chase & Co said that “for those who want to hustle” remote work is not a good option.

Cathy Merrill, CEO of Washingtonian Media, wrote an opinion piece for the Washington Post in May, in which she argued company leaders should be incentivized to change the status of employees who rarely work in the office from full-time to contractor.

The Broader Picture

These CEOs are not the only leaders feeling the downsides of remote operations.

A Harvard Business Review survey from last summer found that 40% of 215 managers reported difficulties in leading a remote team during the pandemic. About the same proportion of managers said that they also believe remote workers tend to perform worse than those in the
office and had doubts about the long-term commitment of these employees.

A similar survey conducted by KRC Research and BCG found that more than a third of bosses felt that keeping employees engaged during remote work was challenging.

Empirical evidence supports these leaders’ stance against remote operations.

The behavioral analytics company Humanyze has found that valuable communication is often lost when a team works remotely. In a study, they identified a 21% reduction in employees’ weaker social connections, outside of their “core contacts.”

This reduction “dramatically changes how quickly information flows across a company,” Ben Waber, president, and co-founder of Humanyze said. “And it dramatically changes how much people are exposed to new ideas.”

He added that in the long term, this reduction in communication can have “extremely concerning” effects on a company’s innovation and progress on large projects.

Humanyze works with some Fortune 500 companies, and they found that among these firms, communication increased by 20% when employees went into the office just once a week.

A study conducted at the Becker Friedman Institute for Economics at the University of Chicago found that at a large Asian information technology services company, productivity fell by roughly 20% when employees were forced to work at home during the pandemic.

Although the total time worked at this company increased by about 30%, the “average output” did not experience significant changes, according to the study.

Researchers at Rensselaer Polytechnic Institute and Northeastern University conducted a study in February 2020 of more than 400 tech workers. They found that the salaries of remote workers grew more slowly than those working at the office.

The biggest thing companies must decide is how much choice to give employees, according to Darin Buelow, global location strategy leader at Deloitte Consulting. This will depend on whether businesses believe that “being next to someone is an accelerator or an enabler of productivity and innovation.”

Buelow believes that if an employer, such as Gorman at Morgan Stanley, insists that everyone comes into the office, many employees might try to find a new job that can be done remotely, given the current tightness of the job market.

While the insurance industry may be better suited to remote work than other sectors, he added, key functions should still be conducted in person, such as getting field representatives “back on the road and back out to see customers.”

“I don’t see any diminishment in the value of face-to-face interactions and personal relationships when it comes to the business of insurance,” Buelow said.

Talent will be a big issue for insurers when considering their return to in-person operations, according to Matthew Josefowicz, CEO of the insurance technology consultancy Novarica. Older workers at the carriers may prefer traditional, in-person office work. But they may also be
more comfortable working from home.

While marketing representatives might be dying to get back into the field to talk to agents, these agents might be happier to sit at home and talk to representatives over the phone, according to Josefowicz.

Most insurers that Josefowicz’s company has surveyed are planning to offer a hybrid model to employees. He added that this approach will be a competitive requirement because it will offer employees the flexibility they seek and will keep them at the company.