Bringing People Back to Offices – Make a Three-Year Plan

I was struck by two recent news themes.  The first theme has been a series of studies that provide evidence of the productivity drag of remote work.  These include a study by the NY Federal Reserve (Report) and a second from the National Bureau of Economic Research (NBER) that provide quantitative data suggesting remote workers are less productive than those that work in-person, with gaps ranging from 8% in the NY Fed study to 18% in the NBER research.  The second theme was the widely reported news that Zoom, the company whose name is synonymous with remote work, has asked its employees to come back to the office at least several days a week.  This is on trend with many of the most successful technology companies that are requiring some form of return to the office.  I deeply agree with this trend.

I believe the data on productivity and I understand the drive by many of the most successful tech companies to get people back to the office to rebuild their “in-office culture”.  I am convinced that many roles need to be brought back to the office and that an office, a set of offices that serve as a nexus, or set of nexuses are critical to the success and effective scaling of MOST software businesses.   People might disagree with me or feel their company and its culture are different, but the data from studies and the behaviors of the most successful tech companies suggest there is a reason people work in offices.

The problem now is – HOW?  “How can we bring people back to the office when our people are now spread-out across the country?” and “How can we attract and retain people who like the flexibility of remote work, if we require people to be back in the office?”

Here are some thoughts:

1.  Make a three-year plan for regaining an effective in-office presence. Every company will approach a plan differently and may choose to do this only with certain key functions, such as inside sales or customer success, and not others, like regional sales, but establishing a goal and a plan that takes a time horizon into account will be critical to successfully getting back to the office—eventually.

• • Recognize that every company is different, every culture is different, and that every plan will be unique.
  • Remember that this shift will not happen in a day, a week, or a month. A three-year plan feels like the right timeline, although the faster the growth rate and hiring rate a company has—o r the less geographically dispersed a team is today—t he quicker a company can make the shift.
  • Figure out where you will retain an office or set of offices. This can be based on a combination of lease obligations and current employee location.
  • Begin to make most—o r preferably all—o f your new hiring in one of these locations and tell people you expect them to come to the office when you establish in-office requirements.
  • Let current employees in these regions know that the offices will be reopening or new ones opening, and that there will be an in-office expectation once office requirements are established.
  • For people who are beyond a commute distance for your office or offices,decide who will be allowed to remain remote and who will be told they need to relocate or leave.
  • Exceptions will always be made and should be sensitive to specific role, seniority, ESG and DEI considerations, criticality of skills, etc. Additionally, carefully evaluate the diversity of your workforce and the mental health needs, caregiver needs, and parental flexibility needs when requiring specific people to adhere to office requirements.  When doing so, keep in mind that there is some evidence that remote work benefits women, people of color, and those with disabilities.
  • Here is an example of the impact of a three-year plan: A company with 100 employees growing its employee base at 20% per year will in three years have 172 employees.  Assuming it must hire enough people to also overcome 10% attrition, approximately 2/3 of the employees will have been hired in the last three years.  If 1/3 of the original remaining employees were in one of the specified locations, then approximately three quarters of all employees will be located where there is an office by the end of the three years.

2.  Be realistic in terms getting people back in the office.

• • Allow for Hybrid: Start with three days a week and pick the days–don’t just say employees can pick any three days of the week but rather designate Tuesday through Thursday or whichever days seem most practical.  People will be much more likely to adhere to this policy when they know that it’s a community goal.  Setting specific days helps make this effective.  Ask people inside a certain commute range to adhere to this and expand the commute range over time as office critical mass builds.  Whether you ultimately go to four days a week or five will depend on many factors and will not need to be decided up front.  Most studies suggest that hybrid work structure, if well designed, can be as productive as full time in the office while providing much of the satisfaction of work from home.
  • Walk the Talk: Senior leadership should be in the office or one of the offices on the days the office is open unless they are traveling for business.  CEOs who relocated during COVID need to find a way to be in the office, or one of the offices, each week.  It starts at the top.  Many companies have remained virtual because the CEO likes being virtual – get over it.
  • Be Flexible: Flexibility with start times and end times is fine. People have gotten used to doing more family and kid-centric things and these likely need to continue. Having people in for most of the day makes a big difference versus people being remote.

Many companies in our portfolio face the challenge of dispersed workforce and empty offices.  I hope they start thinking about their three-year plan as this will be a board topic that I will be raising repeatedly in the coming quarters.  Of course, each company in our portfolio will have a different approach as they are all unique in their own way.

I know there are many opinions that differ from mine including the argument that in a war for talent, you can’t be restricted by geography in your hiring.  That might be true for the 10x engineers that you hopefully will find or the sales rockstars who move the needle serving large accounts. Though for 90% of the roles, you should be able to find the talent in your region or regions, and if not, maybe you need to rethink your office footprint.

We are walking the talk at Osage Venture Partners, where we have a policy of in-office on Mondays, Tuesdays, and Wednesdays (unless traveling for business) and have had this policy since February of 2022.  Every full-time employee is located a commutable distance from the office.  At times, we schedule on-site meetings on a Thursday or a Friday to accommodate an entrepreneur’s schedule, but we try to be flexible on attendance if certain team members are working out of town on those days.  In tribute to the flexibility everyone valued during the pandemic, we are remote for the month of August, although we ask our people to take vacations during part of that month, if possible.  We feel that this arrangement strikes the right balance of improving communication, collaboration, and mentorship while also offering flexibility that our team appreciates, and we hope that all of our portfolio companies can find the right balance for them to maximize team productivity.