Employees want to work from home 2.5 days a week on average, according to a monthly survey of 5,000 Americans. Desires to work from home and cut commuting have strengthened as the pandemic has lingered, and many have become increasingly comfortable with remote interactions. The rapid spread of the Delta variant is also undercutting the drive for a full-time return to the office any time soon. Tight labor markets are also a challenge for firms that want a full-time return.
A few firms, most notably Goldman Sachs and JPMorgan, have recently moved to return their employees to the office full-time. Their stated reasons are that face-to-face interactions are better for collaboration and that employees are less productive at home. Perhaps a darker rationale is to purge nonconformists, with one senior manager declaring “Goldman does not want to hire people for whom the most important thing is how many days they have to spend in the office.”
Companies that take this route could become the next Yahoo, which received a media roasting in 2013 after famously banning working from home and then quietly relenting.
A big challenge for firms that want a full-time return to the office is the extraordinary tightness of labor markets. Hiring and retention are incredibly hard. Talented workers can collect multiple offers if they want to switch jobs. And many people really like working from home.
Employees want to work from home 2.5 days a week on average, according to our monthly survey of 5,000 Americans. Desires to work from home and cut commuting have strengthened as the pandemic has lingered, and many of us have become increasingly comfortable with remote human interactions. The rapid spread of the Delta variant is also undercutting the drive for a full-time return to the office any time soon.
Indeed, our June and July surveys revealed that more than 40% of U.S. employees would start looking for another job or quit immediately if ordered to return to the office full time. Not surprisingly then, Goldman Sachs just announced big salary increases of 30% for new hires. If you want employees back in the office full time in 2021, you have to pay for it.
A subtler issue lurks in workforce diversity. Our survey data show that people of color and highly educated women with young children place especially high value on the ability to work from home part of the week. A ban on working from home risks a rush to the exit by these employees. That would exacerbate an already pressing problem in many organizations that struggle to hire and retain talented women and minority managers.
What to do? Our advice is for leaders to recognize the reality of the new labor market and adapt. Working from home is here to stay: Among the millions of firms that tried remote work since the pandemic struck, fewer than 20% plan to have them return to the office full time after the pandemic ends. Requiring a full-time office presence was easy in 2019 when other firms did the same. In 2021, ordering employees back to the office full time risks a stampede of top talent to rivals that offer hybrid working arrangements.
Under one hybrid model, employees come to the office three days a week – say Monday, Tuesday and Thursday, as in the Apple plan – and work two days from home. Office days are packed with meetings, client events, training, and socializing. Home days are for quiet work, data analysis, reading, and video meetings. Other hybrid models are possible. The challenge for managers is to find the right hybrid model for their organization, and make it work.
So, think twice before ordering employees back to the office five days a week. Don’t be the next Harvard Business School case study of a managerial disaster.