Even Zoom has mandated a return to the office – so what now for remote work?
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It was quite a shock, earlier this week, via The New York Times, to read that the platform synonymous with remote work, Zoom, announce that any employees living “within 50 miles of a Zoom office” must now work in the office “at least two days a week.”
As arsTECHNICA rather drolly put it “Zoom has “Zoom fatigue”
In a statement, a Zoom spokesperson said that the company believes “a structured hybrid approach” is “most effective for Zoom” because it provides an opportunity for workers “to interact with their teams.”
Last year, Zoom CFO Kelly Steckelberg cited an internal survey across 7,400 employees showing that about 85 percent of employees who work remotely “want it to stay that way.”
Despite such an overwhelming result in favour of remote work it seems that Zoom wants less Zoom and more in-person employee interactions leading me to wonder whether we have we reached a new tipping point for remote work.
Last week Australian tech giant Atlassian lauded its remote work policy when it posted better-than-expected financial results for the fourth quarter of 2022-2023, causing its share price to surge by more than 20%.
The company behind productivity and team management software Jira moved closer to break even and now expects year-on-year cloud revenue growth of up to 27%.
In a letter to shareholders, the company went hard on the gamble it made, at the beginning of the COVID-19 pandemic, on remote work, saying its approach was vital to its most recent successes.
“Whether all-remote or hybrid, distributed teams are the future of work.
We’re committed to living that future now and pioneering solutions to the challenges of working across geographies and time zones.
“While some business leaders accuse us of abandoning something essential to our esprit de corps, we see it differently.
We see a chance to lead. Atlassian is one of the only enterprise companies to go all-in on distributed work. Customers and peers are turning to us for advice, inspired by the example we’re setting.”
Atlassian’s TEAM ANYWHERE policy allows staff to work remotely, or in person in Atlassian’s own offices, with teams physically meeting when appropriate for major strategy and planning sessions.
Clearly, the Atlassian approach is not shared by a large majority of local employers.
This week global recruitment agency Robert Half released the results of a survey of 300 business leaders, covering CFOs, CIOs and hiring managers which reported that 87% of Australian companies have mandatory in-office days for staff.
- 19% of employers require staff to be in the office for five days a week,
- 29% mandate four days per week,
- 26% mandate three days,
- 12% mandate two days,
- 2% mandate one day
Global consulting giant, McKinsey believes they have uncovered the ‘sweet spot’ of hybrid work after analysing data about its approximately 4,000 teams and concluding that being on-site (defined as a client site or a McKinsey office) roughly 50% of the time works better than all-or-nothing approaches
McKinsey reported that their teams see steep increases in development, connection, trust-based relationships, and overall team performance when roughly 50% of their time is spent in-person, over the course of a project. An example is that colleagues are 10x more likely to feel that they are working well together when co-locating 50% of the time.
When over 50% of time is spent in-person trade-offs emerged, with individuals and teams at McKinsey having less flexibility and less time for focused work
The research of Nicholas Bloom, a Stanford economics professor who has studied remote and hybrid work arrangements for many pre-pandemic years, reveals that as of September 2022, roughly 55% of US workers are fully in person, 30% are in hybrid arrangements, and the rest are fully remote.
Professor Bloom asserts that there are four main reasons that hybrid has remained popular post-pandemic are:
- Employee turnover declines (reducing recruitment, onboarding and training costs)
- Productivity increases (less commuting has employees fresher and able to focus for longer)
- Diversity, equity and inclusion improves (predominantly for minorities and people with caring responsibilities)
- Less office space is required (saving on accommodation costs)
Highlighting the first point a Conference Board report released last month, revealed that 71% of organisations in the United States mandating on-site work reported difficulty retaining talent with voluntary turnover among fully on-site workers increased 26% in the prior six months, twice the rate among fully remote employees (13%).
Bluntly, Professor Bloom concludes; “…as an economist, I’d point out that firms don’t do things that lose them money. They do things that make them money…it’s (hybrid work) such a no-brainer to increase profit”, although adding “The bigger question is how to execute it.”
Expanding on his point he cautions, “The biggest mistake is ceding full control over choice of days to employees over which days and how many days. It feels a bit like having kids honestly. You know, having teenagers where you want to clearly give them some choice and flexibility. If you give them too much, they go off the rails and it’s just not good for them.”
As a parent of three (one current teenager and two former teenagers) I have to agree – too much choice and flexibility often lead to problems that are difficult to untangle.
I am fascinated to see where the remote work debate goes from here.
Note: much of the inspiration for this blog comes from the most recent issue of Bruce Daisley’s excellent Make Work Better newsletter. I recommend you subscribe.
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I think it has always been obvious that flexibility would be wound back as soon as conditions became tougher – in some cases this is already playing out with return to the office mandates but I think in most cases it’ll just be that as soon as a business has to make redundancies you’ll notice the people who are gone are those who, on average, are never in the office, those who have been hired on a salary that is way ‘overs’ for their contribution or compared to the true market rate, or people who have been seen to be taking advantage of WFH flexibility – those who get promoted will be the opposite.
Long story short, the vast majority of companies want their people in the office more than they are currently in the office (despite the official comms) and that’s going to happen one way or another. Businesses aren’t benefitting from the productivity sugar hit that they have been post-pandemic anymore so the loss of productivity attributable to having too much flexibility isn’t going to be masked in the financials, and that is a sure fire catalyst for change. Businesses are adapting to this reality but the candidate market is still six months behind.
We’re fortunate in recruitment that we can retain a lot of flexibility (3 days / 2 days seems like utopia for most people anecdotally) and I fully expect that to remain. Productivity is easy to measure and recruitment has never required 5 days in the office, even pre-pandemic.
Ross, given the reaction in the last week to the changes in Zoom’s terms of service, it is being suggested that the reason for Zoom calling its employees back to the office may not be as clear cut as originally suspected – that Zoom was being as hard nosed and inflexible as all others companies who demanded their people back into the office. From what I read Zoom had not anticipated the strong community/global reaction to the changes in its terms of service, that are quite alarming. It is also being suggested that the staff have been called back to work on this and restore credibility to Zoom because many people are saying they are going to abandon Zoom. While Zoom has issued another supposedly clarifying update to its terms of service on August 11, there is still considerable confusion about what this means for the privacy of user’s information.