October 2021 | 

Deciding Where Work Happens: Advice for Employers

Deciding Where Work Happens: Advice for Employers

In his new book The Future of the Office: Work from Home, Remote Work, and the Hard Choices We All Face, Wharton management professor Peter Cappelli explores the pros and cons of returning to the office versus part- or full-time remote work — and says now is the time for employers to make decisions. “After a year and a half of offices being shut down and employees working from home because of the COVID-19 pandemic, white-collar work all over the world is facing a fundamental inflection point for its future,” he writes. “There are many options between all remote work and all on-site work. [The choice] is upon us right now, and we have to choose fast.”

Wharton@Work recently sat down with Cappelli, the director of Wharton’s Center for Human Resources, to discuss the research gathered in the last 30 years on remote work, and what we know already about how it went during the pandemic. Here, he offers sometimes startling advice about what to consider when making the decision. (His recommendations for employees faced with the choice of returning to the office or remaining at home will run in next month’s issue).

Wharton@Work: Your book conveys a real sense of urgency about the decision to allow some or all workers a remote option or to require them to return to the office. With the delta variant of the virus so widespread now, can’t employers put off that decision longer?

Peter Cappelli: The delta variant has caused companies to hit the pause button. But the fundamental questions and concerns haven’t changed — they’re just not thinking or talking about it. That’s a mistake. Now is the time to think it through and make decisions. Everyone can’t wait to see what everyone else is doing.

W@W: For those who are weighing a permanent remote option, what do they need to consider?

PC: Are you ready for the challenges of managing them? That solution is easier to manage than a hybrid model, but it can be problematic for your employees. The savings for you [in terms of office space] are clear. But you need to take into account the fact that you can’t manage remote workers the same as those in the office; performance appraisals and advancement opportunities will be different. Looking ahead, you could be opening yourself up to liability issues by inadvertently creating the equivalent of what was labeled the “mommy track” in law firms — a class of employees skewed toward one demographic that are not treated equally. What if those who want to stay home are almost exclusively women with children? You need to anticipate these kinds of challenges.

W@W: You mentioned savings in terms of office space. Should that be a primary consideration in the decision to offer fully remote or hybrid options?

PC: If you listen to your CFO, it might be the only consideration. But it’s more complicated than that, especially if you plan to offer space for remote workers to come into the office when they need to. We can learn from the Silicon Valley companies that already tried the so-called “hoteling” option, offering a limited number of offices for employees to use temporarily. It didn’t work very well. Employees didn’t like being stuck in a space without seeing the people they know and work with, and they pushed back. Most companies that tried it stopped. If your plan for the future relies on hoteling, it is worth thinking about why it ended so quickly.

W@W: What are some of the other considerations employers might not be thinking about?

PC: The first is trust. Your employees love working remotely in large part because of the level of trust, tolerance, and autonomy they have been given. Are you willing to keep giving it, or do you feel the need to monitor them? [You wouldn’t be alone — according to a new survey, 78 percent of employers are tracking their remote workers’ digital activity and performance.] If you want to let people work from home to keep them happy, but don’t trust them, understand that you are defeating the purpose of them staying at home. Don’t expect people to choose remote work if they know they’re going to be monitored.

Second, you have an incredible “fresh start” opportunity and you should think carefully about choosing to ignore it. The story I hear most frequently is that employers have been allowing vaccinated people to come back on a casual basis. They are giving up the chance to reset things.

If you want to use this opportunity to implement changes, start now with those who want to come back to the office. They may be the most committed. Then, when the more reluctant people come in, the change is up and running. Chains stores have been using this model for a long time: they bring in employees to open stores from other locations who already know how to do it, then hire new employees to keep it going.

W@W: That sounds like the model Greg Shea uses in the Leading Organizational Change program. He identifies eight key “levers of change” that include the work environment. Shea wrote recently that “COVID provides the opportunity to reconsider the design of your workplace broadly defined (i.e., including remote). Just what kind of workplace interaction do you want? Seize the moment to create it.”

PC: Exactly. If you are thinking about a change like renovating your office space, do it now, not only because it is easier to do before employees return but also because it will make it easier to shake employees out of their routines. And that prompts the broader question, “What do we want to shake these employees into?” Employers should think about that question and take advantage of this opportunity.

W@W: Should you take into account what your competitors are doing?

PC: The most likely benefit for employers is that permanent work-from-home arrangements may help retain employees who really want to keep working from home. If you think your competitors are already going in that direction, it could make sense to get ahead of the market and begin offering some of those benefits. But this assumes that remote work is actually better for job and organizational performance, or at least not worse.

It’s a different story if you’re in tech, though, where the competition for workers is especially fierce. It’s so easy for people to pick up and move because so many of them are working on the same problems. But when you think about whether to offer permanent remote work to these employees, you need to know that only 13 percent say they want it. Do you really want your whole value proposition to revolve around them?

W@W: For those who choose to offer a remote option to all or part of their workforce, what should they be prepared to do to make it succeed?

PC: Communication is critical. Supervisors need to know that managing remote workers will increase their own workload. When your team has less opportunity to work things out on its own, you need to be more involved in meeting scheduling, team dynamics, and conflict resolution. You also need to be in constant communication with remote workers about business and office developments. If you and your managers are prepared for these changes, you increase your chances for succeeding with remote workers.