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BirdsEye View

 Stuart Schneiderman is an insightful blogger (stuart.schneiderman@substack.com). He was introduced to me by my friend Tony Ross, Chief Credit Officer and EVP of Woodforest Bank. Stuart recently wrote an article about remote work that will certainly resonate among my CEO readers, who generally strongly feel that a traditional work environment is far more conducive to teamwork, collaboration and acculturation. Read it for yourself and form your own opinion.

For a time it appeared that the era of remote work had begun. It seemed that the tired routine of commuting to the office, of sitting in a cubicle surrounded by a multitude of other cubicle-sitters seemed to have been relegated to the past. And besides, young workers were rebelling against office work. If you do not allow them to work from home they have threatened to take their bad work habits elsewhere. 

Nowadays it seems that corporate America has tired of remote work. Despite all of the protestations about how people work more efficiently from their basements or bedrooms, executives are starting to try to require staff to show up for their jobs. Just yesterday Google announced that those who were present in the office would be given special compensatory considerations.

Before examining the different sides of this issue, I would point out that empty office space means non-performing mortgages. More than a trillion dollars worth of mortgages will be coming due next year in New York, just in time for the elections. Are corporate leaders thinking that perhaps this will collapse the banking system, just as it has already contributed to failing storefronts throughout places like New York City? 

As for the larger theoretical issue we cannot do better than to examine a recent essay by economist Allison Schrager. She considers all aspects of the issue and concludes that remote work is not the panacea that everyone thought it was.

And yet, as she opens, early reports about remote work were glowing:

Many employees loved not having to put on presentable clothes, get in a car or on a train, and deal with coworkers all day. And without their co-workers distracting them, they not only got their work done but also felt more productive. In one survey, 77 percent of workers said that they were more productive out of the office. Early research in 2020 indicates that working at home resulted in productivity gains of about 13 percent. Many never want to go back to the office—in another survey, 65 percent of people said that they would like to work remotely all the time. Now some workers are even counting on it, having moved out of commuting distance from their jobs.

Aside from the obvious fact that if the work can be done remotely, why not have it done in Mumbai? It will cost much less and be just as efficient. Schrager explains:

Longer term, while technology may enable remote work, it also makes jobs less secure. As artificial intelligence infiltrates the workplace and remote screen work improves technologically, it will be easier to hire jobseekers from other countries, who are typically much cheaper. A workers’ value under these conditions will likely be based in being able to do something that AI, or someone thousands of miles away, cannot—offer a real human interaction. This will require being in the office.

Schrager cuts through the hype and concludes that remote work is not going to last:

Even if we have the technology to work from home, we don’t have the culture for it, and many jobs still have tasks and functions that can’t be done remotely. In theory, hybrid work—coming into the office two or three days a week—offers the best of both worlds, but in practice it often brings the worst of both. Eventually, most of us will be back in the office most days of the week. If you crave flexibility, you will pay for it or opt for less traditional work.

She continues, taking apart the arguments for remote work:

Much of the productivity bump due to remote work during the pandemic came from time saved in commuting and making ourselves presentable to the public. And many tasks we do in a given day—finishing deliverables on firm deadlines—can be done on a computer or over the phone at home. But for many employees, work isn’t just daily deliverables like logging into a meeting or speaking with a client; intangible expectations are not only important to company culture but also serve a vital role in the larger economy.

So, what is this thing called work culture, and what is it that we are losing by working remotely?

Innovation and problem-solving often rely on collaboration. Sometimes this happens spontaneously—for example, over coffee while chatting with a colleague about the pointless meeting you just sat through. In-person workers also provide valuable services like mentoring, training, and advocating for younger colleagues. This is why Stanford professor Nicholas Bloom—who estimated the 13 percent productivity gain from remote work mentioned above—worries that working remotely every day will reduce productivity and innovation over the long term.

The other salient point is simple. The more we tout the wonders of remote work the more we complain about loneliness and isolation:

In the preindustrial world, apprenticeship systems flourished, and people grew up working alongside family and neighbors. These experiences imparted skills, a sense of community, and socialization. But nothing exists today to replace our current system of training, mentorship, and socialization. Workers say that they’re happier working from home, yes—but they also report higher levels of loneliness and isolation.

So, are the studies wrong? Perhaps they are distorting the reality. And besides, the short term results are not necessarily the same as long term disadvantages:

Early pandemic measures of remote-work productivity don’t capture the long-term effects of working from home because they can’t capture the impacts of lower levels of supervision, in-person collaboration, and loneliness. 

And also,

But even with new technology, humans are still humans. How we connect, form relationships, and collaborate has not changed that much; these interactions come from sustained and regular contact, often in informal settings. The proximity research illustrates why working together, in person, on a regular schedule is so important, no matter how far technology advances.

As for hybrid work, a few days in the office and a few days at home, Schrager debunks that pseudo-solution, because it promotes disorganization:

One of the benefits of the hybrid model is supposed to be flexibility, but the whole purpose of coming into the office is to have the whole team in one place at the same time. If employees come in only when their schedule allows it, or when the mood strikes them, leading to a scattered workforce, then everyone might as well stay home. And if the team coordinates which days they come in, on the other hand, then they no longer have flexibility.

All told, Schrager has offered an excellent analysis, both of why some people are so infatuated with remote work and who this infatuation, like many infatuations, is unlikely to last.

AB: Reasonable people can disagree, hence my divergent viewpoint below.

The topic of remote work has been ever-present in our forums.  It is a point of contention in every group except the CEOs, who generally feel that in-office presence is man essential element of the workplace. The issue is, workers throughout the country disagree.  By and large, they are not looking for 100% remote work.  Most are looking for FLEXIBILITY in the work environment.  Ms. Schrager is right - many workers are interested in partial return to the office.  They miss the camaraderie, their friends, exposure to senior management and the collaboration that are all far better delivered in person. But they also want to be able to work from home a meaningful percentage of their work life for a better balance in their life and the opportunity to do the laundry while working from home.

Our management teams can continue to expect, even demand, 100% at-office presence, but that will certainly create major recruitment issues. Again, the key word is flexibility.  A suitable blend of remote and office-based work is the most effective solution to this quandary. Plus, not all work can be delivered remotely, so specific jobs will not offer the flexibility many are looking for.

I’m a supporter of adding a meaningful remote work aspect to most jobs when possible. But our in-person forums validate every day the premise that not everything can be delivered through Teams as effectively as in person!