Many executives in trial-and-error phase for hybrid work
The freight elevator doors opened onto 50,000 square feet of office real estate. Right now, it is empty, but Seth Besmertnik, CEO of the software company Conductor, gestured at the beams and concrete floor with pride. He has plans for his company’s new office — conference rooms, a pickleball court and, of course, all of his 200 employees in the New York City area.
Besmertnik conceded it was scary to persuade his board to sign a lease doubling his office real estate in 2021. But to him, leasing a larger office was a symbol of his belief in physical, in-person collaboration.
“As much as it might be nice to save the money, I want to save our soul first,” he said with the zeal that often inflects conversations about in-person work three years into the pandemic. “I want to do the right thing for the company in the long term.”
For many companies, though, signing the lease for an office is just the first step. Next, executives have to persuade their workers to fill it. Conductor has relied on both carrots (“Cold brew? Beer?” Besmertnik offered, jokingly, at 10:15 a.m.) and sticks (employees are required to come in three days a week). And like most other companies, it is still experimenting.
“I’m considering going to four days,” Besmertnik said. “We definitely won’t go to five. And might just stay at three.”
Business leaders are in a phase of trial and error that comes with staggering stakes. They are figuring out how many days to call employees back to the office, and on top of that, how strictly to enforce their own rules. While some companies are in five days
a week and others have gone remote forever, many more employers have landed on a hybrid solution, and as they announce these plans, they are facing fierce resistance. Amazon recently told its corporate workers to return to the office at least three days a week starting in May and faced an outcry on Slack, its employee messaging system, and Starbucks asked for three days from its 3,750 corporate employees, prompting an open letter of protest.
“I prefer to work from home,” said Eric Deshawn Lerma, 26, an executive assistant at Amazon who is part of a more than 29,000-person Slack channel at the company called “Remote Advocacy.” “To have that choice stripped from me based on purely speculative observations does not sit right with me.”
Offices reached a crucial bench mark at the start of this year: They’re at half their pre-pandemic occupancy. Just over half of workers who can do their jobs from home are now combining remote and in-person work, according to Gallup. A closer look at New York, from the Partnership for New York City, found that 82% of Manhattan office employers surveyed in late January were maintaining or adopting hybrid policies in 2023. So the corporate experts — McKinsey, Mercer, PwC — have consulted their crystal balls and declared: The future is hybrid.
Hybrid looks vastly different across every office. If the future is hybrid, to many executives that means the future is choose-yourown-adventure. But now the emphasis is shifting from adventure to choice. Executives are making returnto-office plans with more permanence, communicating
requirements more clearly after months of hesitation and mushy expectations, though their plans vary widely.
“There’s not a ‘hybrid office 101’ where you can pick up the book and see what 100 offices have done before,” said Richard Buery, CEO of the Robin Hood Foundation, which requires employees to come in two days a week.
At Conductor, which has required all employees within 90 minutes of an office to return three days a week, managers are ensuring that their teams adhere to the rules. Besmertnik believes that a lack of discipline, with hybrid work, leads to “self-fulfilling failure.”
Orchard, a real estate company, gave its 500 employees an “open enrollment” period in which to decide whether they wanted to be remote or office workers. The 60% who selected the office are expected to come in two days a week.
The decisions CEOs are
making will have effects far beyond their own workspaces. Researchers estimate that office real estate values will plunge 39% from pre-pandemic levels in the coming years. Economists foretell a “doom loop” for urban commercial areas: With fewer people commuting to downtown neighborhoods, retail and services will suffer, prompting even fewer people to commute, spurring a drop in tax revenue that could further hurt downtown services such as public transportation.
Some companies have championed an office-free future — especially Airbnb, which has benefited as ultra-remote workers move to far-flung cities.
“The cat’s out of the bag,” said Dave Stephenson, Airbnb’s chief financial officer and head of employee experience. “For almost every CFO that I’ve talked to who has had a policy of bringing people back to work, people are doing less than
what they’ve been asked. If they’ve said they want to be back three days a week, they’re getting them back two.”
Fully remote work is simple enough to dictate, as is fully in person. Hybrid work often creates a conundrum. Employees say the primary motivation for them to commute into the office is the guarantee of seeing teammates. That demands coordination, with everybody coming in on the same day. But rigid policies often spark greater backlash.
“Well-organized hybrid is the best of all,” said Nick Bloom, an economist and remote work expert at Stanford. “The problem is that organizing it requires managers to have discipline.”
Wall Street’s leaders have been clear that work arrangements are not up for popular debate. James Gorman, CEO of Morgan Stanley, whose employees are mostly in the office three or more days a week, said earlier this year
that remote work was “not an employee choice.”
Other CEOs have been less firm. They understand that their workers save time and money by staying home, and they want to earn the commutes by making the office enticing.
At Orchard, the real estate company, that meant employees were greeted on a recent Wednesday with the rumble of a bar cart rolling past their desks as the head of facilities played a Chumbawamba classic, “Tubthumping” — “I get knocked down, but I get up again” — while offering beverages from an ice bucket filled with Six Point IPAs, Modelos and sauvignon blanc. The bar cart had a photo of Jimmy Buffett with the caption, “It’s 5 o’clock somewhere.” In New York, it was 4:54.
Court Cunningham, the company’s CEO, declined to drink because he said he was heading to the gym and couldn’t combine burpees and beer. But he emphasized that rituals like happy hour ensured that the office was a space where employees wanted to spend their time so managers didn’t have to serve as hall monitors.
“It’s hard to make it work, but when you do, it’s magical,” said Lorraine Buhannic, Orchard’s chief people officer.
In Orchard’s magic, there’s some randomness: “We basically rolled the dice and said, ‘Let’s make it two days a week,’” Buhannic said, adding that the decision was also partly based on employee survey responses.
Business leaders realize, though, that their roll-thedice decisions are shaping the way their employees approach work — how people are generating ideas and balancing lives and careers. And there’s streams of research emerging about the effects of remote work on both.
A study in Nature last year found that communicating virtually can inhibit creativity. Another study from researchers at Massachusetts Institute of Technology found that with the onset of remote work, the formation of what sociologists call “weak ties” — measured in terms of emails between people with mutual contacts — declined 38%. But then there’s the immense stress relief some workers have experienced with remote work. Parents have found that it enables them to better balance professional duties with child care. Employees of color say it reduces microaggressions and cliques.
The best hybrid arrangements promise to combine the values that all sides want: the creativity of in-person collaboration, the ease and fluidity of working from home. Some executives remain hopeful they can strike that balance.