If I proposed a way to raise worker productivity by 20 percent, improve worker collaboration and innovation and significantly reduce employee turnover and real estate costs (for some organizations by millions per year), would you refuse my suggestion? Apparently, Andy Jassy, the CEO of Amazon, would. He apparently doesn’t like the idea of driving higher returns for his investors and improving the work culture of his company.
As reported by the BBC and several business media outlets, Jassy is recalling hybrid-working Amazon workers to the office five days a week. Here’s what he said in an internal email to employees: “We’ve decided that we’re going to return to being in the office the way we were before the onset of Covid,” he wrote, adding this change would help staff be “better set up to invent, collaborate, and be connected enough to each other.”
Jassy is one of a parade of CEOs, such as L’Oréal CEO Nicolas Hieronimus, to blast hybrid and remote working in 2024, emboldened by a cooling labor market. Hieronimus claimed that these workers are not as committed to the company and less productive and collaborative.
Based on empirical research, they are both wrong.
A new study published in Forbes during January 2024 debunks the CEO banter about hybrid 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.
By the way, I love the prophetic title of the Fortune article on Jassy’s announcement: “Amazon CEO Andy Jassy ordered a full-time return to the office—but research says he’ll backtrack next year.”
Long-standing research.
I know from my own experience before the pandemic and years of empirical research that hybrid and remote work is highly effective.
I implemented a hybrid and remote working environment for Medtronic businesses in Santa Rosa, CA, in 2011, based on a business strategy to reduce needless costs and redirect the savings to R&D investments. The strategy worked. We found that nearly 50 percent of workers could work from home three to four days a week, and in some job families, employees could be remote, with new hires not required to relocate to Santa Rosa.
The productivity of our remote workers increased by 22 percent; we saved two million a year in selling off needless real estate. Our turnover went down, and we were able to recruit great new hires more easily. We even found that employees on our innovation teams could work remotely two days a week, and it improved their collaboration and innovation. Perhaps most importantly, we were able to accelerate the commercialization of new products and improve our profitable growth. Investors like that.
I presented this success at Workforce Live San Francisco in 2013, and it was reported on in Workforce magazine. Click this link to see the case study.
Long-standing empirical research from before the pandemic showed that hybrid and remote working (then called telecommuting) led to happier and more productive employees.
Kate Lister and Tom Harnish at Global Workplace Analytics have worked with both public and private employers on teleworking and have examined over 4,000 documents, case studies, and research models. Their analysis indicates that when managers focus on managing to results and incorporating flexible work arrangements, it leads to the following benefits:
- Saves companies $10k to $20k per employee per year by lowering real estate costs, turnover, and absenteeism and increasing employee productivity.
- Reduces company/employee carbon footprint and fuel usage.
- Attracts the best and the brightest workers, regardless of where they live.
- Engages workers who would otherwise not be available (e.g. caregivers, part-timers, the disabled, military spouses, retirees).
- Improves continuity of operations.
- Increases staffing efficiencies.
- Saves employees thousands of dollars per year in commuting costs
(From the article: “Workshifting Benefits: The Bottom Line, May 2010,” by Kate Lister and Tom Harnish, Global Workplace Analytics, sponsored by Citrix Online.)
Additionally, a pre-pandemic meta-analysis of 46 studies on telecommuting by professors at Pennsylvania State University, published in 2007, also showed clear benefits for companies and employees. Involving 12,883 employees, the meta-analysis found that employees perceived higher autonomy and lower work-family conflict. Telecommuting had no general detrimental effects on the quality of their workplace relationships. The study found that telecommuting improved job satisfaction and performance and reduced turnover intent and role stress. The one negative the study found was that telecommuting more than 2.5 days a week harmed relationships with co-workers.
(From the academic article: Ravi S. Gajendran and David A. Harrison. (2007) “The Good, the Bad, and the Unknown about Telecommuting: Meta-Analysis of Psychological Mediators and Individual Consequences.” Journal of Applied Psychology, Vol. 92. No. 6, 1524-1541.)
My case study presents a fix for this!
Open-office bays sink productivity
In addition, crowded, open office bays were always a disaster with too much noise and disruption that sank productivity. Consider the following:
A 1999 case study showed that creating an open office environment for everyone in a company, from research and development to marketing, finance, and human resources, led to a strong employee and managerial backlash.
A study by the University of California, Irvine, found that employees working in open-office bays were interrupted 29 percent more often than those in private offices. To make matters worse, it takes more than 25 minutes, on average, to resume a task after being interrupted.
Studies frequently show that frequent interruptions lead to higher rates of exhaustion, stress-induced ailments, and a doubling of error rates. 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.”
You can learn more about the interruptions and poor productivity of open-office bays here.
Many CEOs long for pre-pandemic work cultures with everyone in the office five days a week. It is a pipe dream that sinks productivity and profits and aliments employees. Moreover, today’s digital technology enables hybrid and remote work. Why long for buggy whips, the Sears catalog, and 9-5 in the office five days a week?
Contact me at VA@VictorHRConsult.com to learn how to raise your productivity and innovation and reduce employee turnover and real estate coats with hybrid and remote working.
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