The productivity problem: The future of in-office mandates looms large

The productivity problem: The future of in-office mandates looms large

Andy Medici

By Andy Medici – Senior Reporter

If CEOs want employees back in the office, they need to think beyond productivity alone.

That’s according to Annie Dean, vice president of team anywhere at software tool company Atlassian, who said productivity-focused company mandates to bring workers back to the office remain a tough sell to workers who have now spent years being productive outside the office.

It also recalls an older work culture where productivity is measured by time spent sitting at a desk — a culture many workers are happier without.

“There is no convincing workers that they need the office to get work done,” Dean said. “Regardless of what CEOs say and regardless of whether they start tracking attendance and making it part of your performance review, workers know they don’t need the office to get work done. Employees are simply not going to follow those CEOs.”

Even so, many companies are doing just that as they seek to ditch or limit their hybrid policies.

Instead, experts say they should focus on an approach that provides both flexibility and a reason to come in. From turnover to real estate to the future of downtowns, the stakes are sky-high.

While Atlassian has been a “work from anywhere” company with thousands of workers across Australia, the United States and elsewhere since 2005, about 77% connect in person at least once per quarter and about half come to the office at least once a month. Some opt to work in the office most of the time, Dean stressed, because they happen to work better that way.

Why? For connections and team-building, Dean said. That could be anything from workplace parties and get-togethers, to wellness activities, or to simply see and meet colleagues from other offices around the world. They have no mandates and recognize that for many, “deep” work is better done at home.

“This speaks to the fact that you don’t need to coerce your employees. You need to help them connect and you need to get really good at what they call the new knowledge work,” Dean said.

The company has also retooled its offices. More traditional offices might have single workstations and smaller gathering areas for collaboration, Atlassian has recognized that these social and collaborative gatherings are larger, so it has created spaces for much bigger meetups. 

Meanwhile, the fact that it does not need a one-to-one headcount to desk ratio in its offices has meant real estate savings, savings that other companies can realize as well, Dean added.

“We are seeing that people feel more productive when they have the flexibility to choose where they are working from,” Dean said. “We believe it’s a more efficient way of doing business.”

In a survey of knowledge workers by Atlassian, about 82% said they had some kind of office mandate. But 46% only went in because of that mandate, not because they wanted to. About 47% of workers said they preferred remote works simply because they were happier working from home.

Workers see a much improved quality of life with flexible work arrangements too. Workers with no in-person mandates said they spend more time with friends and family, more time on physical fitness or self care, and some pursued a new hobby. Others made bigger leaps, with 20% moving cities, 16% buying a house and 12% starting families, according to the Atlassian survey.

The survey tracks with other research in this area, with a working paper from the National Bureau of Economic Research finding remote workers are using about 40% of the time saved from not commuting to work for their employer, while about 34% goes to leisure activities and about 11% to caregiving activities — although workers with children report higher amounts of caregiving time.

A study by the New York Branch of the Federal Reserve found about 60 million hours in commute time saved, and about 35% of that time went back into work — although workers also spent fewer hours working throughout the day.

The focus on how to balance the office with working from home comes as big companies are once again trying to mandate or entice workers back to the office. Google told employees recently it would only consider new remote work requests as an exception and not a rule.

Facebook parent company Meta Platforms Inc., which has spent billions of dollars building a “metaverse” for virtual work, is requiring its employees to come into the office three days a week starting in September. Salesforce, which owns productivity tool Slack, said employees should be working in the office four days a week and is offering matching charitable donations for employees that return to the office.

Devjani Mishra, shareholder at Littler Mendelson, recently told The Playbook that questions and clashes over various elements of hybrid work are growing more common as companies settle into their routines.

A recent survey by Littler found nearly half of employers are planning to require more onsite work in 2023 than they did a year ago — a trend we’ve reported on before.

Ultimately, the reasons are the same, CEOs often cite productivity and culture in their calls to return to the office.

“Companies tying butts in seats to performance, or guilting their employees into charitable behavior, is not only disingenuous, but harmful. By making these decisions, companies are stunting innovation, limiting opportunities to the hands of few, and degrading the one thing they claim to care about – connection,” said Atlassian co-CEO and co-founder Scott Farquhar in a statement.

Overall studies on productivity of the office and home are not a slam dunk for either side.

Long before the pandemic, a Stanford Graduate School of Business working paper found call center employees at NASDAQ-listed Chinese travel agency CTrip randomly-assigned to work from home saw a 13% performance increase — much of it from fewer breaks and sick time and the rest of it attributed to a quieter working environment. Those working from home reported higher job satisfaction and lower turnover. The firm rolled out work from home to the entire firm.

A paper by Natalia Emmanuel of the Federal Reserve Bank of New York, Emma Harrington of the University of Iowa and Amanda Pallais of Harvard University took an in-depth look at software engineers at a Fortune 500 firm,

Before the pandemic, engineers who worked together in the same building received 23% more online feedback on their computer code than engineers whose teammates were not in the same building. After offices closed during Covid-19, the advantage shrank 17 percentage points.

But there is a big trade-off when it comes to in-person work — everyone gets less done. The study found shared proximity reduced the number of programs written per month by 21%, with both senior and junior engineers writing less code.

“This is driven by senior engineers who may write fewer programs when sitting near coworkers because they give more feedback to junior colleagues. However, very junior engineers also write fewer programs when sitting near their coworkers, consistent with needing to respond to more feedback,” the study states.

But much of the return-to-office push could be attributed to middle managers, who as a group have seen a decline in work-life balance, more stress and anxiety and a decline in their satisfaction with their working environment, according to research from Slack’s Future Forum.

Meanwhile, workers who have full schedule flexibility reported 29% higher productivity and 53% greater ability to focus than workers with no ability to shift their schedule.

But companies will have to weigh their office mandates with the potential for higher turnover. A survey by consulting firm Eagle Hill found 47% of workers would consider looking for a new job if their employer reduced their remote or hybrid work flexibility. That includes 61% of Gen Z workers and 57% of millennials.

At the same time, most workers see the office as valuable, with 60% saying those who work more in the office are likely to be more successful. 

“Workers know that some work is best accomplished in-person, especially work that requires collaboration. At the same time, workers don’t want to be forced to work fully in-person because of concerns about work-life balance and commuting time,” said Melissa Jezior, president and CEO of Eagle Hill Consulting. “This means giving employees flexibility is the key to success — perhaps permitting remote work for individualized tasks, rethinking traditional work schedules and having collaborative time in the workplace.”

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