Wharton’s Matthew Bidwell offers his insight on the future of remote work and the hybrid work model, saying the last three years have been a surprisingly successful trial run. This episode is part of a series on “Hybrid Work.”
Why Remote Work Is Still Going Strong
Dan Loney: We’re had remote work for a couple of years now because of the pandemic, and it still seems to have this level of resilience. Should I be surprised about that?
Matthew Bidwell: I don’t know if you should, but I certainly am. I came into this field in the late 1990s when I got a PhD and studied work, so I had the sense that work was changing really rapidly. The conclusion I came to was that work was changing less between about 1990 and 2020. Work changed less than in pretty much any other period in the last hundred years, which says something about my perfect timing.
But I think with the growth with remote work, what it means to work, what it means to be employed on a day-to-day experience has changed more in the last three years than at any time I can remember. It has been dramatic, yet I’m surprised. It was obviously hugely impactful when everybody went home around mid- to late March 2020. Everybody goes home, and there’s a sense of, “OK, we’re going to try to do this remotely.” I can’t remember how long it was before we realized that this was going to be a semi-permanent thing.
There are some wonderful figures. The person who has done the most research on this is a professor at Stanford called Nick Bloom. He’d already done a little bit of work on remote work pre-pandemic. When the pandemic started, he realized, “Wow, this is a big deal. We should study it.” He started running a survey month by month to see where people were working, those sorts of things. Pre-pandemic, about 5% of all days were being worked from home. At the height of the pandemic, that goes up to about 60% because everybody gets sent home and, frankly, if you don’t get sent home, the chances of your being laid off were reasonably high.
It has come steadily back down since then, but it hasn’t gotten much below about 30%. I think over the last seven or eight months, it has been static. We hear a lot about how everybody is going back to the office and companies are bringing people back in. You really struggle to see that in the data.
It’s hard to say when COVID ended. I think for most of us, COVID ended at the point at which we got COVID and stopped worrying about it quite so much. But at this point, it isn’t really shaping much of people’s day-to-day decisions, but we haven’t returned to where we were. The technology hasn’t changed. Nothing else has changed, but we have fundamentally changed how we work. So yes, I’m surprised. I didn’t see this coming.
Loney: What do you attribute to the success of remote work?
Bidwell: I think the big driver is we’ve discovered how much we like it. Going to the office every day carries enormous costs. One of the things you see is that remote work is much more common for people working in big cities. The huge driver here is commutes. If your commute is half an hour each way, that’s still an hour a day that you’re spending doing something that isn’t productive and usually isn’t fun. You have a lot of people with hourlong or even two-hour commutes, where you’re spending two to four hours a day commuting. I think a tremendous driver is just the ability to claim back that time, to put that time to good use.
Economists and academics like to talk about bounded rationality. The idea that we’re broadly sensible, but often within a little box. We don’t necessarily think that hard about things. In some ways, it’s a great example. We are boundedly rational. Yes, we’re commuting, because that’s what we did. And we didn’t think too hard about, “Do I really need to be doing this every day?” Once you’ve gone through a period where you weren’t commuting, and you were still getting your work done, suddenly that opens up as a question. Before it was taken for granted, “Yes, you’re in the office.” Now that feels like a choice.
I think we’re just looking at that and saying, “Why would I spend that time commuting?” Now when the company says, “Come back into the office,” and you’ve got an hour-long commute each way, it feels like the same, “We want two more hours of your time.”
That can make sense and can be justified, but you have to ask why, what’s the point of that? And I think that’s the other side of that. One side is we started to question it for the first time. Do we need to be doing this? The other side of it is I think we discovered it wasn’t that bad. I think there had been this baked-in assumption that we probably needed to be in the office to get things done. In some ways, it’s a profound mistrust of one another. And we discovered that, for the most part, most people do a good job at home, that we can work at home. We discovered the benefits of many people not having to commute are immense. The costs of having them work at home are probably less than we expected, up to that point. So, I think that has fundamentally changed the way that everybody looks at this story.
Are Remote and Hybrid Work Models the New Normal?
Loney: We see more people now maybe breaking up their day, working two four-hour segments or four two-hour segments, being able to get up and go outside and get some fresh air or run a couple of errands or whatever. It’s interesting to have that in the mix. Not only that it’s successful for the employee, but that management understands it’s part of the new norm now.
Bidwell: I think so. When you look at surveys about why people want to work from home, commute is No. 1. I’m sticking to my guns on that. But flexibility is another big one because when you’re in the office, you can only do office things. When you’re working from home, you can spend some time with your kids when they come home from school. You can work out in the middle of the day. For most people, the hours of about 1 p.m. to 3 p.m. are not tremendous productivity hours. If you want to go do something different then – run errands, take a nap, whatever — and then come back to work later, it’s probably not only going to be better for your use of time. It’s going to be better for the organization as a whole.
Loney: What do you say to those people who are concerned about the issue of office collaboration or losing something because you have people working remotely?
Bidwell: I don’t want to dismiss those concerns. I think there are tremendous benefits to remote working in terms of the efficiency of not commuting, in terms of the flexibility. Some people just prefer it. For some companies as well, there are real estate costs, broader commute, broader recruitment, all sorts of benefits. There are real costs. We don’t have as strong evidence on this as we would like, but I think the anecdotal evidence suggests that we don’t collaborate as well, we don’t build networks as well, we don’t communicate quite as effectively as when we’re in person.
So yes, and that’s where I think the debate over this gets a little silly, right? You have some people who are only, “There are huge costs. We can’t do this.” And there are other people who are like, “Huge benefits. We must do this.” And the reality is, there are costs and benefits. The big costs are collaboration, which tends to be a little less effective. I think the other big concern is about developing people. I think particularly junior employees tend to learn a lot through just watching the people around them, through observation. They are losing out on that. You get less mentoring when you’re not around people.
There are some of the companies that have taken a harder line on bringing people back in, say the investment banks. Some of them tend to have a lot of junior people and place a really high emphasis on skill-building through working together. It’s not crazy that they feel they need to bring people back. So yes, there are real costs. If you’ve got a two-hour commute, you need some really high costs in order to outweigh, “I’m going to make you spend two hours a day coming in to do this.” But yes, I can see both sides.
Loney: Have the last three years helped us better research and understand remote work?
Bidwell: It’s a moving target. Some of the more fun things I get to do in my job, we run an online program for senior HR executives at our Chief HR Officer Program. I was doing a webinar today with people around the world, and we spent an hour talking about their experience with remote work. It’s all over the place. Every company is doing something different. Everybody is wrestling with these same sorts of dynamics. Everybody is trying different things. We have some companies say that everybody needs to be back in the office. Other companies want to stay fully remote. A lot of them are trying to do hybrid. It’s a moving target, and I think we don’t yet know really what works well.
Because of that, it’s hard to know where we’re going. Are we going to find a new normal? There’s one scenario where the new normal is probably three days in the office a week and two days at home. That starts to be what you expect for an office job. That wouldn’t surprise me. There is a world where everybody does end up back in the office. There is a scenario where we’ve got a big recession, which we’ve been expecting for about the last two years, but maybe it finally arrives. I think a lot of this is being driven by this kind of push and pull between employer and employee. The average CEO wishes everybody was back in the office. Once they stop worrying about what this means for recruitment, once they stop worrying about whether bringing everybody back is going to drive attrition, maybe they do bring everybody back.
I think the most likely scenario is one where we continue to see lots of different people doing different things. Some companies will decide it’s so important to their culture to have people in person. A lot of other companies are going to say, “You know, we quite like having people in person, but the benefits of being able to recruit broadly, the benefits of really being able to meet our employees’ needs outweigh the advantages of bringing them back.”
Companies Shouldn’t Reject Remote or Hybrid Work Models
Loney: You just brought up an interesting suggestion about thinking about this across cultures and how it may be different here in the United States compared to Asia or Australia or Europe.
Bidwell: Yes, it is weird. You do see big differences across different countries. I was teaching in the Middle East in March, and I did a session on remote work. They all kind of stared at me and said, “No, we’re back in the office. What are you talking about?” It was like, “Well, we’re formally back in the office, but in practice we’re spending a lot more time working from home.”
I think the U.S., U.K., Canada have really embraced working from home more than a bunch of other countries. It will be interesting to see how that evolves. But yes, I think it’s proving hardest to put the toothpaste back in the tube in some countries.
Loney: You mentioned before about the learning component for companies. I would think there’s a learning component for the remote employees as well.
Bidwell: That’s probably true. I think we’ve all adjusted our schedules, thought about what makes us productive, what makes us less productive over time. It is a big change, and I’ve been most interested in how companies are learning about this. We’ve built a whole system around the idea of people being there. This is what culture is. This is what management is. This is what training is. You remember “management by walking around?” Less useful in the remote world, right? You just can’t do that. How we on-board new employees? There are a whole bunch of things that we just have to do differently. I think at least part of it is rethinking a lot about how we manage people. I hope we get away from this kind of conversation about, do we do remote? Do we bring people back? I hope that we say, “Look, we need to find the best of both worlds.”
There are tremendous efficiencies to allowing people to work from home. You see it with small organizations that find it hard often to recruit in local areas. What you see with very big multinational organizations is now everybody works in virtual teams, anyway. I work a lot with HR people — they’re all distributed teams. I’ll speak to somebody in Detroit, and their manager is in San Francisco. Other team members are in New York and Frankfurt. The way they work is already virtual, so bringing them back into the office doesn’t really achieve anything.
I hope we get to a world where we spend much more time thinking about how we make these virtual collaborations as effective as possible. How do we build culture successfully when we are in different places? I’m convinced that there are not necessarily technological solutions, but ways to use the technology better, another practice. They want us to overcome some of the problems that we have working remotely and make this a good enough substitute that we can reap the benefits without the huge costs of being in different places.