In an age of analytical decision-making, many CEOS have spoken publicly about their intuitive belief that office-based workers are more passionate, creative, and productive than remote workers. And that serendipity in the office is critical.
Why do they persist with their intuition despite overwhelming evidence to the contrary?
The latest to speak out is L’Oréal CEO Nicolas Hieronimus. As reported by Cosmetics Business in January 2024, Hieronimus has expressed discontent towards work-from-home in a speech at the World Economic Forum.
Speaking at the annual event in Davos, Switzerland, Hieronimus said permanent remote workers have “absolutely no attachment, no passion, no creativity”. “I think it’s vital to be in the office. It’s about serendipity. It’s about meeting people,” The Telegraph reported. “And it’s also more fair to workers because we have lots of young people who have small houses or have young kids and working from home is actually very bad for their mental health.” Hieronimus added that returning to the office full time was also fairer to the “blue collar workers that work every day in the factory”.
L’Oréal currently allows employees to work from home two days a week, a policy that has remained in place since staff began to return to the office during the Covid-19 pandemic.
I believe Hieronimus is wrong on all issues when I look at the empirical evidence and based on my experience implementing hybrid and remote work.
Let’s take his claims one at a time.
Passionate. Gallup reports that hybrid works that work three to four days off-site have the best engagement. Remote and on-site workers have similar engagement. Gallup defines engagement as the involvement and enthusiasm of employees in their work and workplace.
Creativity. When launching a flexible work environment at Medtronic’s Santa Rosa facilities in 2012, we allowed 45 percent of office, supply chain, and sales workers to work remotely in hybrid or remote office settings. We had product development teams spend five days in the office, believing constant co-location would improve their creativity and innovation. We were wrong. A year into it, our R&D leaders discovered that product development teams were more innovative and productive when team members were able to work remotely one or two days a week to compile reports, think without distractions, and get perspective.
Several studies have backed up our findings that virtual teams can be as creative and productive as co-located teams if there is clear goal setting and norms for virtual information sharing, and if management ensures the virtual teams have equity in conversation with no one dominating the discussion. One study was published in the Project Management Institute.
Productivity. For years, studies have found that remote and hybrid workers are more productive than in-the-office workers. For example, in 2010, Global Workforce Analytics found that companies save $10k to $20k per employee per year by lowering real estate costs, turnover, and absenteeism. And they also benefited from increased productivity.
Other researchers have found that virtual teams (with team members located across the country or world) can outperform co-located teams. MIT researchers found that there are three characteristics that allow virtual teams to outperform co-located teams. They are having team members who communicate effectively, participate equally, and are good at reading emotions.
They also found that having women on teams helps because women, on average, are better than men at reading facial expressions, responding to emotions, and showing empathy. Using video-conferencing technology is critical for successful virtual teams because it enables team members to see faces and eyes, and cue in on the emotions of other team members.
At Medtronic, we found similar excellent cost savings, productivity increases, and reduced turnover. We found that remote and hybrid workers worked more hours than in-the-office workers because they worked half the hours of their saved commuting time and took the other half for themselves or to be with their families. In addition, we found that they were 22 percent more productive than in-the-office workers, largely due to avoiding interruptions in the office. (Open office design was always a productivity disaster.)
A new study published in Forbes during January, 2024, debunks the CEO banter about distributed work reducing productivity, and engagement. It shows that distributed work increases productivity. Finally, it shows that powerful CEOs and firms with a prior quarter drop in profits are more likely to introduce a return-to-work mandate.
Remote work also increases job applicants and diversity applicants. As reported by Kate Lister, a study from Wharton that looked at data from more than half a million jobs, found jobs offered as “remote” received 15 percent more female applicants, 33 percent more minority applicants, and a 17 percent increase in applicant experience.
Researchers Kate Lister and Dr. Anita Kamouri in a May 2020 survey show that the sweet spot for working from home is two to three days a week, with employees coming into the office to collaborate during meetings or to build relationships during events.
Serendipity. The need for office serendipity has been uncovered as a Silicon Valley urban myth. Serendipity is encouraged through open office space design. However, it doesn’t work because it leads to too many distractions and interruptions.
Besides, the rise in chat rooms, Slack, and Microsoft Teams allows instant collaboration among team members and between teams, whether in the office or from across the globe.
Many studies, including ones conducted by the manufacturers that sell office furniture used for open offices, have shown that open floor plans hurt productivity and dampen employee morale. And, contrary to what was first thought, they are not the panacea for promoting collaboration.
A 1999 case study showed that the creation of an open office environment for everyone in a company, from research and development, to marketing, finance and human resources, led to strong employee and managerial backlash. A more varied approach designed to fit how each unique department worked would have been better.
In 2011, Organizational Psychologist, Matthew Davis, reviewed more than a hundred office environment studies. He learned the following:
“Though open offices often fostered a symbolic sense of organizational mission, making employees feel like part of a more laid-back, innovative enterprise, they were damaging to workers’ attention spans, productivity, creative thinking and satisfaction. Compared with standard offices, employees in open offices experienced more uncontrolled interactions, higher levels of stress, and lower levels of concentration and innovation.”
And there are more studies about the value of hybrid work. Click here to learn more.
Famous CEOs can make strong statements about their intuitive beliefs regarding hybrid or remote work, but forcing draconian return-to-work policies will only backfire on them. Instead, they should give their employees the time, space, and technology to do their jobs well and follow the recommendations of empirical research.
About Victor
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and Managing Partner of InnovationOne, LLC. He works with organizations to transform HR and recruiting, implement remote work, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: The Best of Empirical Research, Method and Process, and Digitization. He is quoted in business journals such as The Wall Street Journal, Workforce Management, and CEO Magazine. Victor has partnered with The Conference Board on innovation research. Subscribe to his weekly blogs at http://www.VictorHRConsultant.com
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