5 Findings From New Study About the Value of the Office

One of the biggest remote work studies ever conducted recently released findings that show the office isn’t going anywhere. The study, conducted by UC Berkley scientists, looks at over 61,000 Microsoft employees. Microsoft’s rapid shift to a work-from-model presented a unique opportunity for researchers, a natural experiment that can help shed light on the value of company-wide remote work policies. What the researchers found was that remote workers engage in fewer real-time conversations, work more siloed, and spend less time in meetings.

The study, published Sept. 9 in the journal Nature Human Behaviour and co-authored by Berkeley Haas Asst. Professor David Holtz, builds on assumptions around previous research showing the value of networks and personal connections for organizations. It also has positive effects for the individuals in the organization. Being connected to different parts of organizations through personal connections outside of a team provides new information that individuals can leverage to fill structural holes in the organization. ‘Knowledge transfer,’ whereby information and experiences from one team are passed to another, is critical to high-quality output and culture. The efficacy of that type of transfer and the benefits of networks to an organization depends on the strength of the ties between individuals, that’s where the value of the office is anchored.

“Measuring the causal effects of remote work has historically been difficult because only certain types of workers were allowed to work away from the office,” said Holtz, who conducted the research as an MIT Sloan doctoral intern at Microsoft, and co-wrote the paper with Microsoft colleagues Longqi Yang, Sonia Jaffe, Siddharth Suri, and seven others. “That changed during the pandemic, when almost everyone who could work from home was required to do so. The work-from-home mandate created a unique opportunity to identify the effects of company-wide remote work on how information workers communicate and collaborate.”

Here are some of the most shocking findings of the study:

Remote workers spend about 25 percent less of their time collaborating with colleagues across groups

The study found firm-wide remote work policies caused Microsoft teams to become less interconnected, reducing the number of informal bridges and ties filling structural holes in the company’s collaborative process. Employees spend less time building bridges and ties, and less time collaborating with what connections remain. Less time collaborating across teams slows down critical knowledge transfer necessary for innovation and synergy.

Company-wide remote work caused workers’ collaboration networks to become less interconnected and more siloed

Interestingly, with fewer ties to maintain outside of their teams, individuals lean more heavily on their stronger ties within the team. This had the positive benefit of creating more dense connections between teams, but the negative externality of more siloed work. Without in-person interactions networks become more static, with fewer members being added or removed. Changes in collaboration patterns like those detailed in the study impede knowledge transfer and reduce the quality of employee output.

Remote work led workers to communicate more frequently with people in their inner network, less frequently with those outside of it

Remote workers spend more time collaborating with stronger ties, and less time with weak ties, which provide novel information. Those changes make it more difficult for workers to capture the benefits of forming new bridges, reconnect with previous connections, or change their own status within a network.

Remote work caused workers to spend more time using asynchronous forms of communication

Remote connections like Zooms meetings, phone calls, and Slack messages aren’t necessarily replacing in-person interaction, it may be eliminating some of it altogether. Often synchronous communication, like in-person conversation and phone calls, are being replaced by asynchronous communications, like email and IMs. This affords more flexibility for the communicators but makes it more difficult to convey complex information.

Remote work also caused the number of hours people spent in meetings to decrease by about 5 percent

The initial rush to work from home policies at the start of the pandemic caused a spike in meetings as teams attempted to overcome the lack of in-person interaction with more numerous formal meetings. Since then, the number of overall meetings has declined significantly, now below pre-pandemic levels. The decrease in synchronous scheduled meetings is related to the increased prevalence of asynchronous communication.

What it all means

“The fact that your colleagues’ remote work status affects your own work habits has major implications for companies that are considering hybrid or mixed-mode work policies,” Holtz said. “It’s important to be thoughtful about how these policies are implemented.”

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The study is not necessarily an endorsement of the office or an indictment of remote work. The pro-office team looking for definitive evidence that going into work is better should keep looking, but in the same vein, the anti-office crowd must accept that remote work does come with some negative consequences. The key is studying both remote work and in-office work as viable options, delineating the advantages and disadvantages of each so managers can make the best decision for their teams on an individual level, rather than through a company-wide mandate. Valuing bridges, ties, connections, and collaboration to a company’s bottom line is notoriously difficult.

What is missing from the study is weighing changes in work against Microsoft’s performance. If remote work is holding back Microsoft, you would hardly know it. The company’s stock price is approaching record territory after the tech firm revealed its quarterly net income was up 47 percent annually. The success has set Microsoft up to raise its quarterly dividend by 6 cents and announce a plan to buy back $60 billion in stock. Microsoft’s financial future is clearly not strongly tied to its workflow policies. Microsoft’s 365 and Teams platform have allowed the company to profit handsomely off the massive shift to remote work. The company is now sitting on nearly $130 billion in cash.

Clearly, there’s still much about remote work and the value of offices we don’t fully understand. People are complicated, groups of people even more so. The study of Microsoft’s 61,000 employees moves our understanding of the value of the office forward but is far from conclusive. Many teams take the office for granted, tied to the status quo. Research like the Microsoft study provides a real basis for defending in-person work rather than just being adverse to change. Before any conclusive evidence can be produced, a return to normal to establish a baseline will be required. Maintaining control groups and assumptions is nearly impossible during a global pandemic. We are getting close to understanding the effect of remote work but every answer seems to bring up even more questions about one of the biggest changes to the American workforce in decades.

[Propmodo]