Corporate leaders have long recognized the danger that work from home (WFH) and work from anywhere (WFA) models pose to employee cohesion, onboarding of new workers, and overall work force productivity. As far back as 2013, Yahoo! CEO Marissa Mayer wrote in a memo proscribing remote work at her company, “We need to be one Yahoo!—that starts with physically being together.” IBM soon followed Mayer’s lead. It seemed for a moment that Mayer’s memo might herald the end of what was (at least in retrospect) a very modest era of remote work.
Today, in the aftermath of the Covid-19 pandemic, remote work has become a fixture of our economy. But that does not mean that the concerns Mayer articulated have been resolved. The threat to what Mayer called “one Yahoo!” comes down to the loss of what economists call “specific human capital”. This term can refer to skills (e.g., specific computer software; task norms, etc.) that workers learn on the job. But it also indicates knowledge employees gain about supervisors and subordinates in their organizations, including how their work and work style fits with their colleagues—critical information for effective collaboration. Around the office cooler, workers come to know each other; learn who gets (or doesn’t get) what done; discover which administrator will be most helpful with which tasks; and develop solidarity with each other and their company. Such casual interactions and the solidarity they foster are difficult, if not impossible, to replicate through the computer screen.
On a more basic level, employees also lose opportunities to learn how to do their jobs. As leaders of Goldman Sachs and JP Morgan commented in a recent WSJ podcast, compromised onboarding of new workers during the pandemic is indicative of the limitations of remote mentorship.
The merits and drawbacks of WHF and WFA continue to polarize corporate boardrooms and expert observers alike. Advocates note that remote work offers multiple advantages that contribute to a company’s bottom line, allowing a dramatic expansion of the recruiting pool for top talent; cutting costs as employers adjust salaries for workers living in cheaper regions than their corporate headquarters (e.g., San Francisco, CA vs. Tulsa, OK); and increasing overall employee job satisfaction. Some economists even claim that remote work increases productivity. For instance, when people stopped commuting during the pandemic, they put more than 70% of this saved time back into their work.
Some companies seeking to hedge their bets and retain their workforce are considering hybrid models. One challenge is that these models rely on employee discretion to determine schedules. They also do not achieve the expansion of the candidate talent pool in the way WHF and (especially) WFA do.
How, then, should you write your job description when courting potential employees? The contradictory data suggest one thing: The relative effectiveness of remote work is contingent on industry-specific and job-specific demands that require knowledge of the field and resources to find applicants whose lifestyles and skills best fit those needs.
Brendan Goldman is a Project Manager at ECA.