When the COVID-19 pandemic struck in early 2020, all the dithering about remote work stopped virtually overnight. Working from home wasn’t perfect, but people made it work.
At first, remote employees were triumphant as they checked off their personal and professional to-do lists from the comfort of home. But somewhere between the third surge of the virus, the fourth load of laundry, and the fifth Zoom call of the day, everyone realized that remote work was not a panacea.
By 2023, Wharton management professor Peter Cappelli decided to revisit this idea of “the new normal,” a topic he covered in his 2021 book The Future of the Office. Was it really as successful as it seemed?
“When the pandemic started, there were suddenly all these reports about what a wonderful thing remote work was, and a year later employers just gave up because we didn’t know when the pandemic was going to be over,” he said. “When that wave of wonderful ended, it struck me as so implausible that what we did managing employees in offices for a hundred years was completely useless.”
His latest research is more critical of hybrid and remote work, finding that it results in less contact among colleagues, which erodes personal relationships, which eats away at coordination and collaboration, which is key to building networks and getting things done.
The paper “How Remote Work Is Reshaping the Office” was co-authored by Jasmine Wu, a communications professor at the University of Texas at Austin, and was published online in July. It’s based on extensive interviews conducted in late 2023 with 760 employees of a global financial services firm across three countries. It serves as both a snapshot in time and a cautionary tale about what the scholars describe as the loss of “relational capital.”
That loss was arguably less significant at the start of the pandemic, when the existing workers already knew each other and had established routines and relationships. But Cappelli said it became more detrimental as new hires arrived who needed the mentoring and experience of the veterans. As personal bonds deteriorated, so did informal communication, casual conversation, and even office gossip. One interviewed employee remarked that they didn’t know an important coworker had quit, let alone why.
“You end up with this two-tier workforce. The old group is slowly shrinking, and the new group that’s growing has an arm’s length relationship with work. That’s a weird thing that I don’t see employers talking about or doing anything about at all,” said Cappelli, who is also director of Wharton’s Center for Human Resources.
“You end up with this two-tier workforce.”— Peter Cappelli
Whose KPIs Are These?
Another critical finding is that remote employees in the study shifted their focus toward individual performance goals and away from collective outcomes. Cappelli and Wu said this was partly because the company in the study encouraged their employees to prioritize their own well-being as the virus raged. But the professors said it’s become a common problem across hybrid and remote workplaces because it’s much easier to measure individual KPIs for recognition and promotion.
“In some ways, performance management got better [and] more rigorous because every week you got a check-in with your boss. That additional attention focused people to think about their own stuff,” Cappelli said.
The individual mindset also contributes to the loss of social capital because workers stop helping each other in order to stay focused on themselves. There’s no knock on the cubicle or grabbing a coworker in the hallway. Digital pings are asynchronous, so they’re easily ignored or forgotten. In the study, the top comment from new hires was that coworkers didn’t respond to their virtual requests for assistance.
“A lot of people will think, ‘It’s not in my KPI to do that,’” Cappelli said.
Perhaps the most universally shared finding in the study was what the participants had to say about virtual meetings: They’re bigger, longer, and less productive. With no room reservation needed, invite lists grew unwieldy and often included people who didn’t need to be there. The company in the study allowed participants to turn their cameras off, which made it impossible for the host to “read the room” or know who’s really paying attention.
“Because nobody is paying attention, you have to have post-meeting meetings, and then notes about those meetings that get sent out to people who don’t read them. It’s just not useful at all,” Cappelli said.
“The idea that remote work is obviously a good thing isn’t true.”— Peter Cappelli
How to Make Hybrid Work Better
Rather than advising companies to ditch remote work, the professors encourage leaders to take stock of their remote policies and make some tweaks. They offered the following guidelines:
- Establish attendance policies. Anchor days alone will not be sufficient if space prevents everyone from being in at the same time. Consider alternative scheduling, such as designating Tuesday for some divisions and Wednesday for others.
- Schedule collective activities for office days.
- Mandatory days should be intentional and strategically coordinated to enable collaboration.
- Allowing employees to self-determine their office attendance can undermine collaborative activities. Balance their needs with targeted accommodations.
- Substantially expand onboarding programs. Consider cohort-based approaches so that new hires progress through orientation together. Extend onboarding beyond immediate teams to help new hires network and understand the broader organization.
- Tasks such as mentoring new hires and supporting colleagues should be explicitly incorporated into job descriptions and performance criteria to ensure they are not deprioritized in remote work.
- Require cameras to be on during some video conferences. When meetings include both remote and in-office participants, those physically present should convene together rather than joining individually from separate locations.
- Expand opportunities for employees to meet outside of work, such as volunteering.
- Base promotional decisions on more than just individual KPIs.
Cappelli, recently called “Wharton’s great contrarian” by Fortune, is known for his blunt, evidence-based outlook on trends that get people talking — like the possibility of an AI takeover or the value of a college education. His newest book is In Praise of the Office, a title that seems to leave little doubt about where he falls on the matter. But Cappelli insists he isn’t against remote work. It’s a great idea to give employees more flexibility and control over their time, he said, but great ideas still need refinement.
“The idea that remote work is obviously a good thing isn’t true,” he said. “It’s most useful for the people who are most needed in the office, and that’s experienced people so the younger employees can learn from them. We have to make more experienced people feel more guilty about it.”
