The War Over Work From Home: The Data CEOs And Workers Need To Know

Many of America’s big bosses want their employees back in the office ASAP, arguing that sharing a physical workplace makes them more creative and productive. But is that impulse based on good evidence? Or is it just “executive nostalgia?”

CEOs love data. It drives decisions about pricing, calls about strategy and pivots into new markets. But when it comes to remote work, the chatter in the C-Suite often sounds more like opinion than fact. And many of those execs want to get butts back into seats.

Last September, for instance, BlackRock CEO Larry Fink, in an interview about reducing inflation, said “I think if we magically had more and more people coming back to the office, I think we would see rising productivity.” Disney CEO Bob Iger, in an email earlier this year calling employees back to the office four days a week, said “nothing can replace the ability to connect, observe, and create with peers that comes from being physically together.”

JPMorgan Chase CEO Jamie Dimon has been unwavering in his distaste for fully remote work, saying in 2021 that “it does not work for younger people, it doesn’t work for those who want to hustle, it doesn’t work in terms spontaneous idea generation” and “it doesn’t work for culture.”

Are they right? The truth is it’s still hard to really know. Workplace norms are rapidly shifting. Collaborative software tools are constantly being updated and improved.

And while fully remote work might be a no-brainer in some jobs and for some employees, it may handicap the work of others. Productivity is notoriously tough to measure for white-collar workers. A lot of existing data hails from self-reported employee surveys or academic research that studies niche worker categories.

In that absence, says Brian Elliott, who previously led Slack’s Future Forum research consortium and now advises executive teams on flexible work arrangements, many CEOs still have “executive nostalgia” about a model that worked for them years ago. “There’s still this big CEO echo chamber aspect of it,” he says.

People on both sides have dug in with almost spiritual zeal. Jonathan Levav, a Stanford Graduate School of Business professor who co-authored a widely cited paper finding that videoconferencing hampers idea generation, was surprised by the angry responses he got from remote-work adherents. “It’s become a religious belief rather than a thoughtful discussion,” he says.

With that in mind, Forbes spoke with academic researchers, corporate advisers and business executives to identify what existing data says—or what their own evidence shows—regarding how remote work really works. While some data may seem to support complaints executives have—that remote work saps productivity, hurts younger workers, lessens creativity or kills corporate culture—other research suggests it does the opposite, converting saved commute times into more work hours, retaining workers with child or eldercare needs who need flexibility and making it easier to build diverse workforces when hiring isn’t constrained by geography. “You find one study, and you can point to another study that shows otherwise,” Elliott says.

What is clear: Hybrid arrangements seem poised to win out, inexperienced workers are likely more vulnerable to work-from-home’s downsides and employees really, really don’t want to work full-time in the office. Beyond that, the truth, as with most things, is nuanced and “highly context-specific,” says Ethan Bernstein, a Harvard Business School professor. “I find it challenging and disappointing that top leaders are saying I know this will be the case because I know it will be the case. And I think so do their people.”

Productivity

When the pandemic first started, CEOs seemed almost astonished by how productive people were working from home. Three years later, they’re sounding a different alarm, saying productivity is falling. (Meta CEO Mark Zuckerberg in 2020: Remote work offers “more space for long-term thinking” and makes “me happier and more productive at work.” Zuck in 2023: In-person engineers “get more done,” an internal analysis of performance data shows.)

So which is it? Research can be cherry-picked to point to either result. A recent working paper from Stanford economist Nicholas Bloom, which reviewed existing studies on the topic, caused a stir when it pointed to research showing that fully remote workforces appeared to have reduced productivity of around 10% on average. Yet the review also found that “for hybrid work—and that’s well-organized hybrid work, which gets lost in a lot of these studies—it looks like [the impact is] flat to slightly positive,” says Bloom.

Before CEOs start brandishing Bloom’s paper and calling everyone back onsite full-time, however, there’s a lot of subtlety to those numbers. The studies reviewed tend to look at lower-paid workforces doing repetitive tasks that can be objectively measured—like call center agents or data entry workers in India—which may not be generalizable to the workforce at large, Bloom says, noting the studies also looked at a range of management styles. Some reports studied employees during atypical 2020 conditions—when children in virtual school were underfoot or vaccines weren’t yet available—which may have impacted the results, Elliott says.

And Bloom points out that entirely remote companies would save on real estate and have other built-in advantages, such as lower turnover or access to global (and less costly) employees, balancing out potential declines. “It’s like saying I’ll never buy a Toyota because a Ferrari will go faster,” Bloom says. “Well, yes, but it’s a third the price. Fully remote work may be 10% less productive, but if it’s 15% cheaper, it’s actually a very profitable thing to do.”

Meanwhile, even a little bit of in-person time could mean different results. Among a group of remote call center agents who worked in person just one day a week, for instance, an early study by Stanford’s Bloom saw productivity increase 13%. Government patent officers who could work from anywhere but gathered in-person several times a year, Harvard Business School professor Raj Choudhury found, also saw a boost to productivity rates. Another randomized trial of office workers at one firm compared full-time in-person workers to those who were remote twice a week, and found the impact on measures like productivity, performance evaluations or promotions was zero or just slightly positive for the hybrid workers.

“The truth is the flexible way of working is going to stick, but it needs new management practices,” says Choudhury, such as gathering for regular offsites or figuring out how to coordinate attendance so people aren’t Zooming alone in the office. “There’s good hybrid—and there’s terrible hybrid.”

Creativity

Like productivity, innovation has become one of management’s most common arguments for office returns, suggesting that bumping into colleagues in hallways or cafeteria lines sparks creativity. News Corp. CEO Robert Thomson said in a January memo, for instance, that “the spontaneity and serendipity of a dynamic office environment are crucial in creating and in iterating.”

The problem? Experts say it’s not clear how much random water cooler run-ins spark innovation. Studies have long shown people don’t talk regularly to coworkers who sit more than 30 feet away, even if the opportunity is technically there. And research reviews have shown people are more likely to have more original ideas when not brainstorming as a group.

Meanwhile, open-office plans—which bosses built to spur worker interactions—may have the opposite effect. Bernstein’s research has shown that instituting an open office decreased face-to-face interactions by up to 70%, as workers used headphones, avoided eye contact and followed coworkers’ body language cues. “Norms spread quickly,” he says. “If you interrupt people, they give you the evil eye.”

But other studies find that in-person work has creativity advantages. Researchers studied anonymized phone data and found that face-to-face meetings of workers at different firms increased patent citations, suggesting innovation “ecosystems” like that in Silicon Valley do make a difference. Levav’s research that drew angry reactions found in an experiment that fully remote teams working on new product designs over videoconferencing tools were less effective than their in-person peers. “People’s physical experience affects their cognitive style,” says Levav.

Once again, hybrid appears to help. In a separate study, Choudhury found that teams who worked together between 25% and 40% of the time had the most novel work output—better results than those who spent less or more time in the office. “But it didn’t have to be once a week,” Choudhury says, noting workers could gather just a few days each month and see an effect. “The reality is a vast majority of people now collaborate and work with people all over the country or the world,” he says. “You can’t co-locate them all.”

Mentorship

One of the most common concerns about remote work—and rationales for returning to the office—is its impact on new or younger workers. “For our youngest members of our workforce, I’m gravely concerned that the loss of early career development opportunities is going to cost us dearly over the decades to come,” Citadel founder and CEO Ken Griffin said in 2021.

This is one area where concerns seem more universal. In one study of a pre-covid workplace, University of Virginia assistant professor Emma Harrington found that software engineers who sat in the same building as teammates got 22% more feedback on their code than those with teammates based in other buildings. When the pandemic struck and offices closed, the gap in how much feedback the two employee groups received largely disappeared. “It seems like maybe more junior workers feel more comfortable asking for additional feedback and advice when they are in person,” she says.

Meanwhile, proximity bias—the idea that being physically near your colleagues is an advantage—persists. A survey of 800 supervisors by the Society for Human Resource Management in 2021, for instance, found that 42% percent said that when assigning tasks, they sometimes forget about remote workers.

UC Davis professor Kimberly Elsbach has long studied “face-time bias,” or the career advantages of people who work physically present in the office. Her 2010 study found that when people are seen in the office, even when nothing is known about the quality of their work, they are perceived as more reliable and dependable—and if they are seen off-hours, more committed and dedicated—all “subjective trait characteristics” that are tied to career advancement. Unless performance assessments are more objective, Elsbach says, “our study clearly shows that you’re going to be at a disadvantage for these important perceptions.”

Still, Elliott notes that while the impact of remote work on less experienced workers is a genuine concern, research like Harrington’s also shows that distributed teams—groups of employees who physically work in an office but in different buildings—can suffer from the same fate. “It’s not just because it’s potentially harder [to mentor people] remote,” he says. “It’s because we have lousy systems for mentorship and development in the first place, and especially for younger workers.”

Being in person, he says, “just makes it easier for people to fall into habits to help one another.” What most workplaces need are ways to bring people together, at least for training and offsites, as well as better mentorship programs overall: “If you intentionally structure a process around it, you’re going to get better results, period.”

Culture

During the pandemic’s early days, as managers fretted about the impact of remote work on corporate culture, many scheduled virtual happy hours or VR-headset game activities that, for many workers, just added to the Zoom fatigue. CEOs have bemoaned the impact on culture: “While we have built transactive connection and on-screen skills through COVID, we have lost a true human connection at [headquarters],” then-Starbucks CEO Howard Schultz wrote.

Corporate culture is a slippery thing, one that defies easy definition. It’s technically a company’s shared norms or values, but many employees think it’s synonymous with work-life balance, or how toxic their boss is, or how many fun perks are available. All of those are tricky to measure.

One proxy for culture might be how connected people feel to their colleagues—but once again, research is a mixed bag. When Microsoft studied the work habits of some 60,000 employees before and after the shift to work from home—comparing emails, video calls, calendars and other digital communications—it found the share of time they spent collaborating with teams in other parts of the company dropped by about 25%. Separately, researchers from MIT analyzed traffic in the school’s email network and found that communication between different research units dropped amid the pandemic move to remote work, resulting in fewer “weak ties.” They improved when hybrid work began again.

But many people and a number of companies that have stuck with remote arrangements say it’s helped or had no impact on culture. In a quarterly survey by Slack earlier this year of more than 10,000 knowledge workers, those who worked remote or hybrid were 57% more likely than people who worked onsite full-time to say their culture has improved over the past two years. The review platform Yelp, which has closed all but one of its U.S. locations, released a breakdown of its data in February finding no significant change in the percentage of new employees who said they felt connected to their teams between 2019 (95%) and 2022 (94%).

And the software firm Atlassian, where there are no in-office mandates and 40% of employees live more than two hours away from an office, ran an analysis to see how often remote workers needed to come together to feel more connected. What it found: Internal surveys showed that remote employees who got together for in-person team gatherings had a 27% increase in how connected they felt; the surveys suggested three times a year was the best frequency for preventing a loss of that connectedness. Regular office attendees did not see a boost in their connection scores in internal surveys.

Says Annie Dean, whose title is “head of team anywhere” at Atlassian: “For whatever reason, we keep making where we work the lightning rod, when how we work is the thing that is in crisis.”