Why In-Office Work is the New Dinosaur
The world of work has been turned on its head. The relentless, five-days-a-week grind in the office is now the worst option. So shows a recent meta-analysis by Nick Bloom at Stanford University, the top academic expert on flexible work models.
The Big Shift of In-Office Work
In the past, full-time in-office work was the norm. It was the unchallenged king, the default modus operandi for businesses worldwide. However, the COVID-19 pandemic became a game-changer, forcing organizations to experiment with work-from-home and hybrid work models. To everyone’s surprise, these alternatives not only worked, but they also outperformed the traditional model in many ways.
Research indicates that work-from-home is stabilizing at about 25% of days, a 5-fold jump compared to 2019. It’s a colossal shift. Picture this: if full-time in-office work was a giant, hulking dinosaur, then the pandemic was the meteor that caused its extinction. The survivors? Hybrid and fully remote work models, the adaptable mammals of the work world.
The Hybrid Advantage Compared to In-Office Work
Why is hybrid work better than in-office work? Let’s break it down into four key factors: productivity, happiness, rent, and talent.
Productivity
Here’s the deal: Hybrid work isn’t just a feel-good factor. It delivers results. It’s like a productivity-boosting superfood for businesses. Research indicates that an organized, flexible hybrid model is 1% to 3% more productive than a fully in-person model.
Why? Two words: concentration and commute. With hybrid work, employees get quiet time for focused “deep” work and save hours on commuting. It’s like having a secret sauce that supercharges your employees.
The key, as I tell my clients who I help figure out how to implement hybrid work models, is having employees commute to the office only for the activities that are most productive to do in the office. Those four activities are: intense synchronous collaboration, nuanced conversations, socializing and team bonding, and on-the-job training and mentoring. You can do these activities remotely, but it takes more time and effort, lowering their productivity.
By contrast, other activities are more productively done at home for the large majority of employees: focused head-down work, asynchronous communication and collaboration, and videoconference and phone meetings. The latter activities typically take up anywhere from 70-90% of a typical employee’s workday. Thus, it’s incumbent upon companies and managers to minimize the commuting time of their staff by squeezing the activities most productively done in the office into the minimal number of days possible. That way, staff get to be most productive by not wasting time, money, and stress on commuting.
Happiness
No one enjoys a monotonous five-day-a-week office routine. It’s like being stuck in a time loop where every day is Monday. In contrast, hybrid work is like a breath of fresh air.
Bloom’s meta-analysis shows that it’s equivalent to an 8% pay raise in terms of employee happiness. Imagine getting a raise without dishing out a single extra dollar. It’s like finding a secret shortcut in a marathon.
Rent
Let’s face it: Office space isn’t cheap. It’s like a hole in your pocket that keeps draining money. The hybrid model can help plug this hole.
By allowing employees to work from home for a part of the week, businesses can significantly reduce their space costs, typically being about 10% to 20% of labor costs. It’s like downsizing from a mansion to a cozy, cost-efficient home without losing any comforts.
Talent
One of the most persuasive reasons to adopt a hybrid work model comes straight from the horse’s mouth. Employees, the lifeblood of any organization, have expressed a strong preference for hybrid work, making it a powerful tool for attracting and retaining talent. Why is hybrid work such a crowd-pleaser? It’s all about choice and flexibility. Hybrid work offers the best of both worlds: the convenience and comfort of working from home, coupled with the social interaction and collaboration of the office environment.
Consider a recent experiment with over 1600 engineers, marketing, and finance professionals. The study found that the ability to work from home reduced quit rates by a staggering 35%. Moreover, the power of hybrid work to improve retention is not limited to a particular age group. While younger employees have shown a preference for more in-office time, older employees are more likely to favor home-based work. A hybrid model caters to both preferences, making it a universal retention tool.
The Remote Work Edge: Maximum Cost-Effectiveness
Fully remote work is the undisputed champion when it comes to cost-effectiveness. It’s the business equivalent of a well-oiled, fuel-efficient machine that delivers maximum output for minimal input.
Drastic Space Savings
First, let’s talk about office space. With a fully remote work model, you don’t need one. Compared to the 10-20% decrease on office space for hybrid work, this is a 100% decrease on the budget line that’s typically the second-most expensive for service-oriented companies: office rent.
Think about it. No rent or mortgage payments. No utility bills. No office maintenance or cleaning costs. No expenditure on office furniture or equipment. It’s like moving from a high-maintenance luxury vehicle to a self-sustaining electric car. The savings are not just significant; they’re game-changing.
Lower Wage Bills
In a fully remote model, you’re not just saving on office costs. You’re also cutting down on wage bills. You’re no longer restricted to hiring talent in high-cost areas. You can recruit from across the country, or even globally, where the cost of living – and hence wage expectations – are lower. It’s like sourcing your products from a low-cost manufacturer without compromising on quality.
To put it in perspective, it’s not just about hiring from lower-income places. It’s about accessing a global talent pool. You can find the best fit for your company without being restricted by geographical boundaries. It’s like having a key to a global talent treasure chest.
Flexibility and Scalability
Fully remote work offers incredible flexibility. You can scale up or down without worrying about physical office space. Need to add more people to your team? No problem. There’s no need to worry about finding larger office space or moving to a new location. It’s as easy as providing your new hires with access to your online work platforms.
This flexibility also extends to your employees. They have the freedom to work from anywhere, which can lead to higher job satisfaction and improved work-life balance. It’s like giving your employees a happiness booster shot that could lead to increased productivity and loyalty.
The Trade-Off: Productivity
While the cost benefits of fully remote work are substantial, it’s not a one-size-fits-all solution. It’s like opting for the most affordable cable package: you save money, but you might miss out on some channels.
Research shows that while fully remote work is more cost-effective, it lags behind the hybrid model in terms of productivity. There are benefits to face-to-face interactions that can’t be replicated in a fully remote environment. Casual office conversations, in-person team collaboration, and the camaraderie developed among employees who share physical space are all elements that can boost productivity and are often missing in a fully remote setting.
In essence, the fully remote model is not without its trade-offs. However, for businesses that prioritize cost-effectiveness and can find ways to maintain productivity in a remote setting, it presents a compelling option. It’s about understanding your business needs and striking the right balance between cost savings and productivity.
The Ideal Fit: Hybrid versus Remote Work
The decision between hybrid and fully remote work largely depends on the nature of your business and the specific roles within your team. Like finding the perfect shoe size, it’s all about the right fit.
Hybrid Work: The Jack-of-all-Trades
Hybrid work models thrive in environments that benefit from both in-person collaboration and quiet, individual work. These environments often involve professionals and managers, who are mostly graduates and higher paid. Businesses in tech and finance sectors, where employees can execute their tasks from virtually anywhere but also gain from face-to-face brainstorming sessions, are ideal candidates for the hybrid model.
Imagine a software company where engineers need quiet time for coding (the solitary run), and brainstorming sessions for problem-solving (the relay race). Or consider a financial firm where analysts require undisturbed periods for data analysis (the long-distance race), and team meetings for strategy discussions (the hurdles race). In such scenarios, hybrid work is like a versatile athlete who excels in both individual and team events.
Fully Remote Work: The Cost Maverick
Fully remote work models are the holy grail for businesses looking to maximize cost savings. They’re particularly beneficial for roles that can be performed entirely online and don’t require frequent in-person interactions. Think of roles like IT support, payroll, and other specialized roles that are often outsourced or contracted.
In this context, imagine a customer support firm that operates through online chats and calls (the table tennis match). Or consider a content writing agency where writers create and submit their work entirely online (the chess game). In such businesses, fully remote work is like a champion in individual sports, delivering top-notch performance without needing a team around.
The Role of Technology
Technological advancements are also a crucial factor in determining the choice between hybrid and fully remote work. With the market for WFH products having increased 5x, new WFH technologies are being rapidly developed. For instance, better audio-visual equipment, virtual reality, holograms, and efficient scheduling software are making both hybrid and fully remote work more appealing and efficient.
The bottom line is, there’s no one-size-fits-all answer. Whether a hybrid or fully remote model will be most beneficial depends on various factors, including the nature of your business, the roles within your team, and the specific needs and circumstances of your employees. It’s about understanding your unique needs and making a choice that best supports your business goals and your employees’ wellbeing.
On a personal note, having helped 24 companies figure out their flexible work models, I can say that over 90% (22) chose a hybrid-first model. Only two chose a remote-first model, a research institute and an IT company, both of which had less of a need for frequent collaboration and depended more on finding and retaining the best individual talent.
The Verdict
Full-time in-office work, once the reigning champ, is now the weakest link. It’s like a washed-up boxer past his prime. The future belongs to hybrid and remote work. Hybrid is the rising star that combines better productivity and cost-effectiveness than in-person work. Fully remote work, on the other hand, while less productive than hybrid or in-office work, offers the best return on investment with its cost advantages for companies that don’t require intense collaboration.
The message is clear: adapt or perish. It’s time to say goodbye to the traditional full-time in-office model and embrace the flexible work revolution. It’s not just about surviving; it’s about thriving in the new world of work.
Key Take-Away
In-office work is on the decline, replaced by more flexible hybrid and fully remote models. The shift is driven by benefits like increased productivity, cost savings, and enhanced employee satisfaction, signaling the need for businesses to adapt… Share on XImage credit: RDNE Stock project/pexels
Dr. Gleb Tsipursky was lauded as “Office Whisperer” and “Hybrid Expert” by The New York Times for helping leaders use hybrid work to improve retention and productivity while cutting costs. He serves as the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts. Dr. Gleb wrote the first book on returning to the office and leading hybrid teams after the pandemic, his best-seller Returning to the Office and Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage (Intentional Insights, 2021). He authored seven books in total, and is best know for his global bestseller, Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters (Career Press, 2019). His cutting-edge thought leadership was featured in over 650 articles and 550 interviews in Harvard Business Review, Forbes, Inc. Magazine, USA Today, CBS News, Fox News, Time, Business Insider, Fortune, and elsewhere. His writing was translated into Chinese, Korean, German, Russian, Polish, Spanish, French, and other languages. His expertise comes from over 20 years of consulting, coaching, and speaking and training for Fortune 500 companies from Aflac to Xerox. It also comes from over 15 years in academia as a behavioral scientist, with 8 years as a lecturer at UNC-Chapel Hill and 7 years as a professor at Ohio State. A proud Ukrainian American, Dr. Gleb lives in Columbus, Ohio. In his free time, he makes sure to spend abundant quality time with his wife to avoid his personal life turning into a disaster. Contact him at Gleb[at]DisasterAvoidanceExperts[dot]com, follow him on LinkedIn @dr-gleb-tsipursky, Twitter @gleb_tsipursky, Instagram @dr_gleb_tsipursky, Facebook @DrGlebTsipursky, Medium @dr_gleb_tsipursky, YouTube, and RSS, and get a free copy of the Assessment on Dangerous Judgment Errors in the Workplace by signing up for the free Wise Decision Maker Course at https://disasteravoidanceexperts.com/newsletter/.