My last employer forced all of us to return to the office - it reversed the policy, only after a significant exodus of talent. I was one of those, but far from the most difficult to replace.
Are they showing some sign of regretting the loss, or operating on the premise that the good workers are in the office and the problem children are going away? If it’s the latter, then talent is fungible and they’ll just find more.
I think part of the problem is that it's hard to measure the productivity of individual workers and even harder to link that to specific outcomes.
Thus if all the best workers are replaced and now we have higher system failures, more bugs, and slower project releases, then management can choose to believe that those problems are unrelated to the decision that caused people to leave.
Only the lowest members of the team understand the loss in real terms... and who wants their thoughts and opinions on things?
There's a definite internal disagreement over how to see it. A lot of managers are highly extraverted and will justify any cost to the business if it lets them work in the environment they prefer. Others had looked at productivity and seen it increase over the same time period. In my opinion the former group won a Pyrrhic victory but the war is still ongoing.
It seems strange to me when management makes mistakes like this. It's reminiscent of requiring people to move when the company moves office locations, or offering people money to volunteer to be laid off.
In each of those cases, the ones who are most fearful for their jobs are often the least competent who know they'll have a hard time getting a new job. The highest skilled folks have no problem walking away because they know they can get another job in no time.
I guess it's the management delusion that each employee is fungible and can be replaced with a new employee without any loss of productivity.
I don't think managers generally think that there is no loss of productivity when you have churn. Loss of productivity due to churn is a very well known phenomenon. But it's also true that almost any employee can be replaced, and if they can't you should probably fix your org structure or processes so that they can be. Having single employee dependencies is one of the worst scenarios for organization robustness, and that includes people at the C-level. The old adage that a good manager should aim to make themselves replaceable has some merit.
All that said, I think people often incorrectly assume that having people in an office will yield productivity gains. I don't know of any research that definitively shows that to be true, and good management should be doing result based performance management not ass in seat performance management anyways. Despite this, I still routinely meeting high level people in companies who insist that assess in seats somehow give more productivity. I don't buy that hypothesis.
This isn’t about “single” employee dependency though, companies are seeing significant attrition due to these policies. There’s no way to know this is safe and it’s probably hard to estimate costs.
Even in an ideal configuration where your employees are basically redundant raid drives (and yes you need to pay a lot for this redundancy which I doubt most employers do), you generally don’t want to lost too many at once, and even if you survive you still have high costs associated with replacement (training, hiring, fit, etc)
It might still be the best long term decision in some cases, but man, you better be making this decision based on more than a hunch.
> Despite this, I still routinely meeting high level people in companies who insist that assess in seats somehow give more productivity. I don't buy that hypothesis.
I'm teaching a software development programme to mostly 18 to 20 year old students. One of the ideas behind the programme is that students need to work through many increasingly difficult programming assignment. And that they do this for 40 hours per week in our 'office' (a class room with fancier furnishing and less density).
Due to COVID, we experienced some periods during which we had to revert to (partially) working from home. On average, about 40% fewer assignments were completed during these periods.
Our explanation (and also the reason that we have students come in full-time in the first place) is that:
A) Students who get stuck need to be able to easily seek help at that moment. Many students just don't ask for help when working from home, regardless of the many things we tried to stimulate this.
B) When students get stuck, feel frustrated, feel tired or are satisfied with something they've accomplished, many will come up with the idea to play a quick computer game. And get sucked in for the rest of the working day. This doesn't seem to apply to the few older students (with working experience) we have though.
So what does this tell us about employee productivity when working from home? Probably little, though I wouldn't be surprised if an organisation with lots of juniors has similar experiences.
Just pointing out that your data has a pretty clear confounder. “Wfh” and “wfh during the initial stages of a global pandemic” are very different things.
Is it pronounced “sig-nif-eye” or “sign-if-eye”? If they make signs, I’d imagine it’d be cool to use the latter. The site doesn’t load, so I don’t know what they do.
Yep. This is a 5bln lighting company which used to be known as Philips Lighting. Unlike their Hue product, their policy to work is not innovative. Good luck hiring talent :)
My (unnamed) employer does too unless you live greater than a certain distance from the office. Have had several high-caliber engineers quit. They had reqs out for their replacements within a week. It sucks but their company their rules.
My wife’s company did this, and then backpedaled after a bunch of good people quit.
I would like to talk to the executives making these boneheaded decisions. What is going through your head when you decide to arbitrarily give some people the benefit of working from home and forcing some to come to the office as a function of where their current home address happens to be?
Their general theme is that we, as a company, are more productive if working collaboratively together. The CEO has been asked many times to change policy and has not. At this point I somewhat think it's more "because I said so". I'm sure the distance from office that will allow you to work from home was decided in a meeting and published in someone's TPS report.
I do not think there is anything boneheaded with executives calling everyone into the office, if they think that is what will help them. The stupid part is pissing off some or much of your team by giving the benefit of working from home to those who happen to live in a certain location.
I haven't heard anyone complain that Fred can work from home because he lives more than X miles away from the office. Everyone, at least it seems to me, is OK with distance being used to determine if someone is allowed to work at home. There may be people who are irked about it but they aren't particularly vocal. I think it's more that company X just down the road allows it so why not us.
This is a complex issue, but if we were to try to simplify it a bit, we could say:
"Any job that can be done from home can also be done from India or Brazil."
Sometimes I say this and people say "India is a different culture and it is a different time zone."
Well, okay, let's say that's true, there is still Brazil, which is only one time zone away from New York City. Brazil has a Western culture, and thanks to a recent political crisis its currency devalued so it now seems like a low cost place to outsource work.
Again, this is a complex subject, but I've been surprised by the number of workers in New York City who don't seem to get the basic underlying facts of the situation. Most of the work that can be outsourced will be outsourced, so most of the work that remains in the USA is work that needs to be done at the office.
I've often heard workers say "Why should it matter if I'm at the office? All that matters is whether I get my work done. I should be judged on that and that alone."
Yes, for sure, that applies to all of the situations where the work can be easily defined, and some concept of "quality" is easy to apply. However, the work that can be easily defined, to the point that it can be written down in a contract, is also the work that is easiest to outsource. There is a famous economist named Coase who wrote a famous thesis on this very subject. He asked the question, why do employees exist? That is, why isn't everyone an independent agent, a corporation of one? He concluded that there is a lot of work that is not easy to define, not easy to write down, and where "quality" is multivariate and composed of intangibles -- in all such cases it is better to hire an employee than outsource the work to another company. But the vagueness of definition that leads to the existence of employees also makes it difficult to allow work-from-home, for all of the same reasons.
Of course, in between outsourcing and work-from-office there are infinite shades of gray, which can be paid a sliding scale of values. That is, there is some work that can be done from home, where the company is willing to pay more than they would pay for outsourcing and less than they would pay for in-office work. There is some middle ground. And that is what I've been seeing in New York City this year. I've seen some companies pay as much as $30,000 extra to get people back into the office.
What is surprising is that most of my work-from-home friends don't see this as a pay cut. As the old saying goes "workers fear losses more than they value gains." Since their salary is not being cut, they don't feel like they've suffered a pay cut. But if your peers get pay raises and you don't, I'd say that is something like a pay cut. And if you don't see it that way this year, you might see it after a few years. Because your peer who gets an extra $30k this is going to be making 100k more than you in about 4 or 5 years. If the big pay raises go to people who work in the office, then a gap will open between those who work in an office and those who work from home.
Again, the fundamental economic issue is this: people who work from home are competing directly with folks in India, Romania, Vietnam, and Brazil, in a way that folks who work in an office are not.
The model that I'm seeing this year in New York City is something like "leadership and top workers in the office, less important workers can work from home." Many workers are grateful to be able to work from home -- they regard this as an enormous perk. Indeed, they forego $30k and considered themselves better off for it. But I wonder, where will this new model take us in 5 years? I think for many workers, if they don't go to the office, they are self-selecting themselves from any future leadership roles. Which is fine, if they just want a good paying job, and they don't aim for a future leadership role. But for folks who do aim for ...
Writing out your post is more time than I care to spend worrying about it. I've finally secured a fully remote position at my current company, and I'll continue working fully remote for as long as I can. It's not worth worrying about the pros and cons of remote culture when I don't have any input into the decisions. I'm just going to coast along the best working circumstances I can find as time goes on, simple as that.
I devoted a chapter of my book to this subject, especially regarding when and how entrepreneurs should think about the trade-off between outsourcing, versus work from home, versus work from the office:
I'm not sure I follow your argument. You seem to be saying that if a job can be done from home you are competing with people in cheaper countries. Therefore you should work in the office, to avoid that competition.
But if the job can be done at home, what does it matter if you do that same job in an office? Are you just hoping that being in an office is some kind of protective camouflage?
"Therefore you should work in the office, to avoid that competition."
The problem here is the word "you". That's a misleading word, in this context.
What I wrote was instead from the point of view of entrepreneurs and managers. Consider the situation from their point of view and the argument makes sense. Also, the economist Coase was trying to answer the question "Why do corporations exist?" so his point of view was very much from that of the corporation.
I could have made that more clear, hopefully this clarifies it:
From the point of view of the corporation, if work doesn't need to be done at the office, then the corporation can ask "Can we outsource this to Vietnam, India, Romania, or Brazil?"
About this:
"Are you just hoping that being in an office is some kind of protective camouflage?"
Let's assume some computer work where what is needed is absolutely clear and easy to define and easy to check, such that a manager can easily state what they need, and the same manager can also easily see if the work was done at a high level of quality. Coase would say that all such work will eventually be outsourced, because it is easy to outsource, and outsourcing is often cheaper.
But according to Coase, there is a large category of work that is somewhat difficult to define, perhaps because the work involves a creative or spontaneous element. Or possibly because the work is multi-variate such that it is impossible to achieve quality on every variable, and so the evolution of quality in particular variables both limits and opens the door to the future of the company (in other words, Google cannot outsource the creation of the algorithm of its search engine, as that algorithm defines the future of Google). In such cases, the manager cannot easily define the work, nor can the manager easily check if the work is being done, nor can the manager easily evaluate the quality of the work. In such cases, the corporation will want to in-source the work. For such work, it is important to build long-term, trustful relationships with those doing the work.
That much is I think a straight re-statement of Coase.
I'd add, the arguments that apply to outsourcing and in-sourcing apply, to a lesser extent, to the question of "work from office" versus "work from home." We can see this in the pay being offered -- in New York City I'm seeing companies offer large pay increases to get people back into the office. The companies clearly place more value on the work done in the office, in contrast to the work being done at home.
About this:
"But if the job can be done at home"
The argument is that the vague intangible aspects of the job are probably not happening when the work is done at home.
Outlook still calls time when you're not working "Out of Office". Being "in the office" means you are working, and part of the organisation.
So to what extent is the physical proximity of colleagues an essential part of that organisational belonging? Or is it just that prior to our current technological capabilities and the pandemic, being "in the office" was a necessary part of that belonging?
To develop evidence, you would need to generate examples of vague, intangible but fundamentally valuable work. Since that is difficult, research on this subject is going to proceed slowly. Since it takes effort, on the part of the leadership, to define vague, intangible but fundamentally valuable work, doing so clearly has a cost associated with it. This extra cost is the starting point of Coase's theorem. Rather than define this cost exactly, most workers, and most management, proceed on instincts. So management says "I'm willing to pay an extra $30k a year to get workers into the office, because defining their work will cost me more than $30k a year." And then some workers say "Working in an office costs me more than $30k a year, so I won't go to the office" or some say "I'll make a profit if I take the $30k and go to the office." Rather than work out this value exactly, most are proceeding on instincts.
Still, we can reason about vague intangible factors by looking at the behavior of the top leadership. Top leadership prefers to meet other top leadership in-person. In New York City right now, the pattern I'm seeing is that leadership meets each day in the office, while less essential workers are allowed to work from home. Likewise, with the pandemic ending, most meetings of the Boards Of Directors have gone back to in-person meetings. And the best salespeople I know greatly prefer in-person sales calls rather than Zoom calls. In every case, those at the top behave as if in-person gatherings give them some extra benefit, which might be difficult to define, but whose importance is revealed by the behavior of those at the top. When a CEO meets with their Board Of Directors, they prefer to do so in-person.
This is too large a subject to get into in comments on Hacker News, but the starting point would be the question "Why do firms exist?"
That leads to other questions:
"When does a firm want to hire an employee, rather than outsourcing the work to another company?"
"Why does hierarchy exist?"
I don't think much work has been done on the specific issue of "work from home" but presumably the arguments for and against outsourcing apply in lesser form to "work from home".
Module theory can contribute something to the conversation, there is a nice overview here:
It is possible that the issue is best understood the other way around: look at the failures of outsourcing and then notice what they have in common with "work from home". Here is a good essay on the failures of outsourcing:
"Carillion consisted, essentially, of a sales and contract management organisation that hunted public-sector service contracts and then hired subcontractors to carry them out. This is a fairly pure statement of the firm as a network of contracts. It grew largely through a succession of mergers and acquisitions, buying up the facilities management divisions of British construction companies to get their government contracts. This had an important effect on the company – it became a conglomerate that had only one real specialisation, bidding on government contracts. It is not surprising that it didn’t do a great job."
Many advocates of "work from home" argue "Why should it matter where I do my work, so long as I get my work done? If I'm doing excellent work, and getting it done on time, then I should be allowed to that work f...
Interesting, thanks for the response. I agree we can't take this further in HN comments.
I would only observe that alternate explanations for this behaviour than there being any actual value to being in the office are quite plausible, for example, demonstrating committment, or being afraid of being judged as less committed.
As an aside, I used to work for a technical services company that was bought by a company who aggressively acquired other similar companies. Their only skill it turned out was doing this, and they ran them all into the ground.
I don't believe that working from home is related to outsourcing in any meaningful way, but I can relate to that story on a personal level!
Matt, I've been in a few conversations on this topic, so I finally wrote up a complete answer, and I quote your questions in my essay, which I've posted here:
I used to work at this company. The ceo is totally mental and mistrusts his employees to be productive remotely. Company is desperately in need of new top leadership. This guy even rehired Nissan’s deranged and corrupt CIO, who is renowned for reorganizing with total disregard for people.
41 comments
[ 3.1 ms ] story [ 93.0 ms ] threadThus if all the best workers are replaced and now we have higher system failures, more bugs, and slower project releases, then management can choose to believe that those problems are unrelated to the decision that caused people to leave.
Only the lowest members of the team understand the loss in real terms... and who wants their thoughts and opinions on things?
In each of those cases, the ones who are most fearful for their jobs are often the least competent who know they'll have a hard time getting a new job. The highest skilled folks have no problem walking away because they know they can get another job in no time.
I guess it's the management delusion that each employee is fungible and can be replaced with a new employee without any loss of productivity.
All that said, I think people often incorrectly assume that having people in an office will yield productivity gains. I don't know of any research that definitively shows that to be true, and good management should be doing result based performance management not ass in seat performance management anyways. Despite this, I still routinely meeting high level people in companies who insist that assess in seats somehow give more productivity. I don't buy that hypothesis.
Even in an ideal configuration where your employees are basically redundant raid drives (and yes you need to pay a lot for this redundancy which I doubt most employers do), you generally don’t want to lost too many at once, and even if you survive you still have high costs associated with replacement (training, hiring, fit, etc)
It might still be the best long term decision in some cases, but man, you better be making this decision based on more than a hunch.
I'm teaching a software development programme to mostly 18 to 20 year old students. One of the ideas behind the programme is that students need to work through many increasingly difficult programming assignment. And that they do this for 40 hours per week in our 'office' (a class room with fancier furnishing and less density).
Due to COVID, we experienced some periods during which we had to revert to (partially) working from home. On average, about 40% fewer assignments were completed during these periods.
Our explanation (and also the reason that we have students come in full-time in the first place) is that:
A) Students who get stuck need to be able to easily seek help at that moment. Many students just don't ask for help when working from home, regardless of the many things we tried to stimulate this.
B) When students get stuck, feel frustrated, feel tired or are satisfied with something they've accomplished, many will come up with the idea to play a quick computer game. And get sucked in for the rest of the working day. This doesn't seem to apply to the few older students (with working experience) we have though.
So what does this tell us about employee productivity when working from home? Probably little, though I wouldn't be surprised if an organisation with lots of juniors has similar experiences.
I would like to talk to the executives making these boneheaded decisions. What is going through your head when you decide to arbitrarily give some people the benefit of working from home and forcing some to come to the office as a function of where their current home address happens to be?
My guess is that the employer is concerned about 'shirking', which tends to be prevalent in union-protected positions.
"Any job that can be done from home can also be done from India or Brazil."
Sometimes I say this and people say "India is a different culture and it is a different time zone."
Well, okay, let's say that's true, there is still Brazil, which is only one time zone away from New York City. Brazil has a Western culture, and thanks to a recent political crisis its currency devalued so it now seems like a low cost place to outsource work.
Again, this is a complex subject, but I've been surprised by the number of workers in New York City who don't seem to get the basic underlying facts of the situation. Most of the work that can be outsourced will be outsourced, so most of the work that remains in the USA is work that needs to be done at the office.
I've often heard workers say "Why should it matter if I'm at the office? All that matters is whether I get my work done. I should be judged on that and that alone."
Yes, for sure, that applies to all of the situations where the work can be easily defined, and some concept of "quality" is easy to apply. However, the work that can be easily defined, to the point that it can be written down in a contract, is also the work that is easiest to outsource. There is a famous economist named Coase who wrote a famous thesis on this very subject. He asked the question, why do employees exist? That is, why isn't everyone an independent agent, a corporation of one? He concluded that there is a lot of work that is not easy to define, not easy to write down, and where "quality" is multivariate and composed of intangibles -- in all such cases it is better to hire an employee than outsource the work to another company. But the vagueness of definition that leads to the existence of employees also makes it difficult to allow work-from-home, for all of the same reasons.
Of course, in between outsourcing and work-from-office there are infinite shades of gray, which can be paid a sliding scale of values. That is, there is some work that can be done from home, where the company is willing to pay more than they would pay for outsourcing and less than they would pay for in-office work. There is some middle ground. And that is what I've been seeing in New York City this year. I've seen some companies pay as much as $30,000 extra to get people back into the office.
What is surprising is that most of my work-from-home friends don't see this as a pay cut. As the old saying goes "workers fear losses more than they value gains." Since their salary is not being cut, they don't feel like they've suffered a pay cut. But if your peers get pay raises and you don't, I'd say that is something like a pay cut. And if you don't see it that way this year, you might see it after a few years. Because your peer who gets an extra $30k this is going to be making 100k more than you in about 4 or 5 years. If the big pay raises go to people who work in the office, then a gap will open between those who work in an office and those who work from home.
Again, the fundamental economic issue is this: people who work from home are competing directly with folks in India, Romania, Vietnam, and Brazil, in a way that folks who work in an office are not.
The model that I'm seeing this year in New York City is something like "leadership and top workers in the office, less important workers can work from home." Many workers are grateful to be able to work from home -- they regard this as an enormous perk. Indeed, they forego $30k and considered themselves better off for it. But I wonder, where will this new model take us in 5 years? I think for many workers, if they don't go to the office, they are self-selecting themselves from any future leadership roles. Which is fine, if they just want a good paying job, and they don't aim for a future leadership role. But for folks who do aim for ...
https://en.wikipedia.org/wiki/Theory_of_the_firm
I devoted a chapter of my book to this subject, especially regarding when and how entrepreneurs should think about the trade-off between outsourcing, versus work from home, versus work from the office:
https://www.amazon.com/meetings-underrated-Group-waste-time-...
But if the job can be done at home, what does it matter if you do that same job in an office? Are you just hoping that being in an office is some kind of protective camouflage?
"Therefore you should work in the office, to avoid that competition."
The problem here is the word "you". That's a misleading word, in this context.
What I wrote was instead from the point of view of entrepreneurs and managers. Consider the situation from their point of view and the argument makes sense. Also, the economist Coase was trying to answer the question "Why do corporations exist?" so his point of view was very much from that of the corporation.
I could have made that more clear, hopefully this clarifies it:
From the point of view of the corporation, if work doesn't need to be done at the office, then the corporation can ask "Can we outsource this to Vietnam, India, Romania, or Brazil?"
About this:
"Are you just hoping that being in an office is some kind of protective camouflage?"
Let's assume some computer work where what is needed is absolutely clear and easy to define and easy to check, such that a manager can easily state what they need, and the same manager can also easily see if the work was done at a high level of quality. Coase would say that all such work will eventually be outsourced, because it is easy to outsource, and outsourcing is often cheaper.
But according to Coase, there is a large category of work that is somewhat difficult to define, perhaps because the work involves a creative or spontaneous element. Or possibly because the work is multi-variate such that it is impossible to achieve quality on every variable, and so the evolution of quality in particular variables both limits and opens the door to the future of the company (in other words, Google cannot outsource the creation of the algorithm of its search engine, as that algorithm defines the future of Google). In such cases, the manager cannot easily define the work, nor can the manager easily check if the work is being done, nor can the manager easily evaluate the quality of the work. In such cases, the corporation will want to in-source the work. For such work, it is important to build long-term, trustful relationships with those doing the work.
That much is I think a straight re-statement of Coase.
I'd add, the arguments that apply to outsourcing and in-sourcing apply, to a lesser extent, to the question of "work from office" versus "work from home." We can see this in the pay being offered -- in New York City I'm seeing companies offer large pay increases to get people back into the office. The companies clearly place more value on the work done in the office, in contrast to the work being done at home.
About this:
"But if the job can be done at home"
The argument is that the vague intangible aspects of the job are probably not happening when the work is done at home.
So to what extent is the physical proximity of colleagues an essential part of that organisational belonging? Or is it just that prior to our current technological capabilities and the pandemic, being "in the office" was a necessary part of that belonging?
So some people claim that vague, intangible but fundamentally valuable parts of a job do not happen at home.
What evidence is there for this supposition?
To develop evidence, you would need to generate examples of vague, intangible but fundamentally valuable work. Since that is difficult, research on this subject is going to proceed slowly. Since it takes effort, on the part of the leadership, to define vague, intangible but fundamentally valuable work, doing so clearly has a cost associated with it. This extra cost is the starting point of Coase's theorem. Rather than define this cost exactly, most workers, and most management, proceed on instincts. So management says "I'm willing to pay an extra $30k a year to get workers into the office, because defining their work will cost me more than $30k a year." And then some workers say "Working in an office costs me more than $30k a year, so I won't go to the office" or some say "I'll make a profit if I take the $30k and go to the office." Rather than work out this value exactly, most are proceeding on instincts.
Still, we can reason about vague intangible factors by looking at the behavior of the top leadership. Top leadership prefers to meet other top leadership in-person. In New York City right now, the pattern I'm seeing is that leadership meets each day in the office, while less essential workers are allowed to work from home. Likewise, with the pandemic ending, most meetings of the Boards Of Directors have gone back to in-person meetings. And the best salespeople I know greatly prefer in-person sales calls rather than Zoom calls. In every case, those at the top behave as if in-person gatherings give them some extra benefit, which might be difficult to define, but whose importance is revealed by the behavior of those at the top. When a CEO meets with their Board Of Directors, they prefer to do so in-person.
This is too large a subject to get into in comments on Hacker News, but the starting point would be the question "Why do firms exist?"
That leads to other questions:
"When does a firm want to hire an employee, rather than outsourcing the work to another company?"
"Why does hierarchy exist?"
I don't think much work has been done on the specific issue of "work from home" but presumably the arguments for and against outsourcing apply in lesser form to "work from home".
Module theory can contribute something to the conversation, there is a nice overview here:
https://scholarship.law.vanderbilt.edu/cgi/viewcontent.cgi?a...
It is possible that the issue is best understood the other way around: look at the failures of outsourcing and then notice what they have in common with "work from home". Here is a good essay on the failures of outsourcing:
https://cabalamat.wordpress.com/2018/02/03/coase-carillion-a...
Consider this bit:
"Carillion consisted, essentially, of a sales and contract management organisation that hunted public-sector service contracts and then hired subcontractors to carry them out. This is a fairly pure statement of the firm as a network of contracts. It grew largely through a succession of mergers and acquisitions, buying up the facilities management divisions of British construction companies to get their government contracts. This had an important effect on the company – it became a conglomerate that had only one real specialisation, bidding on government contracts. It is not surprising that it didn’t do a great job."
Many advocates of "work from home" argue "Why should it matter where I do my work, so long as I get my work done? If I'm doing excellent work, and getting it done on time, then I should be allowed to that work f...
I would only observe that alternate explanations for this behaviour than there being any actual value to being in the office are quite plausible, for example, demonstrating committment, or being afraid of being judged as less committed.
I don't believe that working from home is related to outsourcing in any meaningful way, but I can relate to that story on a personal level!
http://www.smashcompany.com/business/what-work-can-be-done-f...