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Why more managers are reversing their fully-remote work policies

Posted by Kanika Sinha

April 21, 2023

Is work from home more or less effective than in-office work? Three years after the pandemic sent millions of employees home with their laptops, the debate rages on. And while employees believe flexibility is the key to their productivity, managers at both small businesses and major corporations are starting to doubt the effectiveness of their fully-remote staff. 

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Some executives suggest remote workers are more productive, but only for a time

When remote work first became the new normal, there were few outside distractions impacting workers’ productivity. Restaurants, gyms and attractions were closed. Stay-at-home orders limited gatherings. And with the shift to distance learning, even daily dropoff became a non-issue. 

But for today’s work-from-home professionals, distractions abound. It’s easy to run out for a two-hour lunch, squeeze a gym session in between meetings, or leave half an hour early to meet up with friends. And while remote work is manageable when you already have a connection with your team, hiring, onboarding, and developing bonds with new team members entirely through screens is a greater feat than many employers expected. 

Data suggests work from home is more productive than office work, but managers disagree

There are significant discrepancies between the productivity rates reported by remote employees, and those reported by their managers. And those discrepancies may shed light on why employees tend to prefer hybrid work flexibility, while many managers in major companies across the country are pushing for increased time in the office. 

In a report from Future Forum, which surveyed more than 10,000 global office workers, respondents reported that schedule flexibility allowed them to be 29% more productive with a 53% increase in their ability to focus. 

On the other hand, Microsoft’s study of 20,000 workers in 11 countries revealed that 85% of company leaders feel hybrid work has impacted their ability to trust the productivity of their employees, and a full 49% of hybrid managers say they struggle to trust that their employees are doing their best work. This “productivity paranoia” is a major force driving the reversal of companies’ work-from-home policies. 

Microsoft’s study supported the findings of Future Forum. According to Microsoft’s productivity signals (which are triggered by activity across the company’s tech systems), effort and efficiency continued to climb in 2022. Not only are meetings up by 153% globally, 42% of workers multitask during those meetings. While meetings and multitasking alone aren’t indications of profitable activities, these signals indicate workers are increasingly active at their desks — whether it’s at home or in the office. 

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But productivity paranoia isn’t the whole story

In an interview with the Wall Street Journal, one small business owner reported that productivity in his company has steadily declined since implementing work from home three years ago. While he initially planned to allow full work-from-home flexibility, he has recently reversed course — requiring his employees to be in the office three days a week for now, with the potential for an additional work-from-home day during the summer if productivity remains steady. Unfortunately, the company’s incoming leads for the day are 30% lower than normal, which he reports as being typical of work-from-home days. For his company, the numbers are inarguable. 

Big companies like Salesforce and Meta are also watching productivity dwindle among flexible workers. Salesforce reports remote new hires are difficult to onboard and train, while sales representatives who work from the office are more efficient. Both companies have laid off thousands of workers in recent months. And both are limiting the number of fully-remote jobs they’ll offer in the future. It’s no surprise, then, that according to LinkedIn, just 12% of current job listings on the site are fully remote — down from 20% last spring. 

Even the freelancing platform Upwork, which specializes in connecting flexible workers to remote opportunities, has noted the difficulties that come from hiring remote workers. In its annual securities filing in January, the company admitted onboarding, upskilling and motivating remote employees is a challenge. However, they remain committed to finding the best talent for every job, no matter where the employee wants to work. 

For employers, the transition back to office work won’t be easy

With as many as 50% of the leaders of knowledge workers planning to cancel their work-from-home policies by Spring 2023, employees are pushing back. Their frustration with the imposed return-to-office policies is described by some as “the psychological phenomenon of reactance,” or the agitation that comes from having freedoms taken back. While these employees may have enjoyed working in the office full time before the pandemic triggered the work-from-home trend, now that the freedom is being taken away, or limited by hybrid work, employees are feeling stifled. 

With today’s historically low unemployment rate, many of these employees do have the leverage to seek out more flexible work. But if the economy slows in the coming months and more businesses are forced to close or layoff workers, their options for flexible work may become more limited. 

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This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.


Kanika Sinha
Kanika Sinha

Kanika is an enthusiastic content writer who craves to push the boundaries and explore uncharted territories. With her exceptional writing skills and in-depth knowledge of business-to-business dynamics, she creates compelling narratives that help businesses achieve tangible ROI. When not hunched over the keyboard, you can find her sweating it out in the gym, or indulging in a marathon of adorable movies with her young son.

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