AP Photo/Steven Senne

Thanks for reading our briefing about what companies are doing to navigate the continued reality of remote work, to reopen safely, and to reset their practices for the long-run. You can sign up here to receive it by email as well.

The Virus

The latest virus forecast: The US has had an 8% increase from two weeks earlier, averaging about 70,000 new cases per day, with the outbreak in Michigan still raging and an increase in cases among young adults. About 40% of the US population has received at least one dose of a vaccine, with 58% of the population in New Hampshire and over 45% in Connecticut, Maine, Massachusetts, New Mexico, and Vermont having had at least one shot.

The business impact: Retail spending rose 9.8% in March, while about 200,000 fewer people filed initial unemployment claims last week. Sales at restaurants and bars were 36% higher in March than a year earlier, while spending at grocery stores was down 14%. Luxury good sales are booming, with LVMH reporting first-quarter sales 8% higher than 2019 before the pandemic. Consumers are “coiled, ready to go and they’re starting to spend money,” said JPMorgan Chase CEO Jamie Dimon. Morgan Stanley forecast the economy to grow 7.5% this year, which would be the highest annual growth rate since the 1950s.

Focus on Hybrid Workplace Best Practices

Surveys show clearly that a large majority of office workers is in favor of hybrid work approaches post pandemic, meaning they’ll work part-time from the office and part-time remotely. Most organizations now seem to be heading in that direction as well.

What do we know about the best way to organize it? For answers, I reached out to Nicholas Bloom, a professor of economics at Stanford, who has for years been studying remote work and has recently been consulting with organizations about their return to workplace plans. (Business Insider recently called him “America's best work-from-home expert.”) Here are excerpts from our conversation, edited for space and clarity:

What does research tell us about the advantages and disadvantages of hybrid workplaces?

Hybrid seems to be the best of both worlds. I would say 80% to 90% of firms are going for hybrid. The reason is that it trades off two tensions. The advantage of coming into the office is that it's useful for creativity, though the research on that is thin. There's one piece from Microsoft where their findings were that teams that became remote had significantly more communication within the team and less outside the team. The story was that it's easy to Zoom with people within your team. But you don't tend to have those spontaneous meetings in the canteen when you chat to other people.

So the one big story is that communication, innovation, and creativity are hard remotely. The other thing people talk a lot about is maintaining company culture, which is a bit more intangible, but that's a some-distant-way secondary. Those are the upsides of in-person.

One upside of remote work is you can concentrate better, and there I've done a large randomized control trial. It was at CTrip, and it was in many ways a very simple experiment—we just asked people in this large multinational, 'Who wants to work from home?'

From that, we found astoundingly that they were 13% more productive at home. The big drivers of that were from two benefits. They were more efficient per minute—3.5% more efficient per minute. Then the remaining 9.5% was because they actually worked more minutes now. In the case of CTrip that's because they started and stopped work on time and took fewer breaks, but at most graduate firms there are possibly people that also would work some of their commute. In our surveys, we asked people what they did with their saved commute time and roughly 40% said they'd spent it working for their current employer.

The two benefits of remote work: It's quiet, so for non-innovative, individualistic type activities, you'll probably be more efficient. To be clear, that's post Covid. But the other benefit is you just save a lot of time. The average American commutes almost an hour a day. So it's a heck of a lot of time saved.

So hybrid works because it combines the best of in-person and remote?

Hybrid, if it's well organized, doesn't make any sacrifices. It gets the best of both worlds. The reason is if we think about the typical person's working week, and break it up into tasks—what are you doing? Most people are probably spending 50-60% of the minutes in a typical week in group activities: meeting with colleagues, clients, doing presentations, having meaningful lunches. The remaining 30-40% are individual activities like answering emails, doing expenses, reading, preparing presentations, etc. Most of the second category isn't so urgent that it can't wait one day.

Hybrid is where the entire team, everyone you'd ever want to meet, comes in, say, Monday, Tuesday, and Thursday, and we all work at home Wednesday and Friday. Under that scenario, you have the best of both worlds because all your interpersonal stuff is all done face-to-face in those three days. They're kind of exhausting, so it's not perfect. But it's better off doing that. Then the two days you have enough quiet work to do that you just work from home; you Zoom, and things like that. Some of those two days can have individual one-on-one meetings, because they work really well over video calls. That's the sense in which hybrid is the best of both worlds. Since 40% of your time is individual, you get the pick-up in productivity and you save on the commute. And for the 60% face-to-face, there's no loss.

You said hybrid, 'if it's well-organized', is the best of both worlds. What are the keys to being well-organized and what are the pitfalls?

It's like going down a decision tree. Step one: establish that hybrid's probably the way to go. Eighty percent of firms are at that point already. Then the tree splits and two-thirds again align with my current advice, and one-third has a different view. There's two broad schemes on this. One is choice and the other is centralization.

In survey data I've collected, there's incredible variation in how many days people want to work from home. Of people that can work from home, the average number of days they say they want to work from home post-pandemic is 2.5, almost exactly 50%. But it's almost a uniform distribution from 20% at zero days up to 20% at five days a week. It's a huge spread. So you think, why not let people choose?

The alternative view is you don't choose—you centralize it, which is my current advice. I used to think, go down the choose route. The reason I changed my mind is there are two problems with the choice thing. One is what's called mixed mode. Anytime you have a meeting with some people on Zoom and some in person, now that's a real pain and doesn't work. Then firms say, 'Aha, we've solved it! We're going to have everyone connected from a laptop!' But that still has its problems. As soon as the laptop goes down, everyone at work stands up and wanders to get a coffee together and chat. So mixed mode is very hard to fix. There's an in-group and an out-group.

The other problem that's much more pernicious is what I would call the diversity issue. We need two other facts to get this. Fact one is if you look at who is choosing to work from home five days a week, it's not random. If you look at college graduates with kids under the age of 12, which is almost half the workforce actually, then women have almost 50% higher preference to work from home five days a week than men. You can imagine the outlook of disabled people, people that live far away, and so on.

Fact two is if you look at our CTrip example, people that were randomized to work from home after 21 months had almost half the promotion rate of people that are in the office. They're otherwise identical. There's no difference in anything except one group's working from home. And in fact, they're performing better—that's that 13% number. But despite the fact that they're performing better, they're getting promoted less.

When we interviewed them, and I've talked to firms, there are two reasons for that promotion penalty for working from home. One is effectively what you could call discrimination, the out-of-sight, out-of-mind effect. That's theoretically fixable—you can probably train to fix a lot of that. The other is very hard to fix, which is by working from home all that short-run increase in productivity, those more minutes I work, much of it comes out of fewer coffees and lunches with colleagues. Some of that activity is actually effectively long-run training and culture building and human capital building that makes you a better manager, just to know who your peers are and what's going on in the firm.

If you add all of that together, the problem with choice is it's pretty clear where this will lead. What this will lead to is that five to 10 years from now, you'll have a much higher promotion rate of single young men than married women with young kids. And for any other trait where people are split down on preferences, the people living far away from the office won't get promoted. For the firm both legally, because there's a legal time bomb in this, and also for diversity objectives, it's problematic.

And the answer is that organizations should just decide that everyone needs to come in three days a week?

Exactly right. Let's go for just a simple version, if we're not caring about office space. The simple version is that each team decides how many days they come into the office. Let's say I make you do it within three or four days a week, and you may all vote to do three. You've also got to decide which days and all stick to it. So team by team, you decide it. Then there's no choice of a number of days or which days, which is also important.

That's one simple version of it. A slightly more complicated version is that you as a firm are concerned about office space and you have 30 teams and you say, 'Everyone comes in.' Everyone's going to vote to take the day off Friday and Monday. But you can't do that because we can't make office savings. So now what we're going to do is every team has one day we'll pick for them, or one day they choose, or something like that.

You can read a full transcript of our conversation, including discussion of a gradual approach to workers returning, how to schedule teams so that joint projects don’t wither, technology that could help, and the outlook for skyscrapers.

You can watch Bloom’s 2017 TED talk about remote work.

Content from our partner McKinsey & Company

On purpose. You're not alone if you're questioning your life's purpose. Nearly half of US-based employees are reconsidering the kind of work they do in light of the pandemic. A new article lays out why that matters—and how to meet employees' needs better so they don't jump ship.

What Else You Need to Know

Their original job descriptions are unrecognizable to many workers after a year of the pandemic. Responsibilities have morphed and expanded amid altered conditions, short staffing following belt tightening or growth, longer work days, and other factors.

  • There’s likely to be a reckoning as companies return to the workplace, and workers look for raises and promotions to reflect their responsibilities, or opt instead to change employers.
  • Researchers have found that managers who performed tasks during the pandemic that they felt they shouldn’t have to be doing were more likely to be distressed and depressed. The researchers recommend getting rid of those tasks where possible and formally making any others part of the managers’ roles.

Corporate leaders found their voice on voting rights. More than 300 CEOs, companies, and other executives pledged to “defend the right to vote and oppose any discriminatory legislation.” The statement follows passage of a new law in Georgia expected to disproportionately make it harder for Black voters to cast ballots.

  • What the signatories actually do is another question. The statement doesn’t specify business actions or address specific legislation.
  • But that will soon be tested. Over 40 states have legislation pending that could limit voting access, part of a national push by Republican lawmakers.

Former American Express CEO Harvey Golub responded to the pledge by arguing that it’s wrong for executives to take public stands on any policy issues not directly related to their businesses.

About 70% of American workers weigh a company’s environmental record when choosing an employer. Roughly one-quarter of workers say it’s a major factor and 45% say it’s a minor factor, according to a recent Gallup survey.

Jeff Bezos pledged to make Amazon “Earth’s Best Employer and Earth’s Safest Place to Work.” In his final shareholder letter as CEO ahead of his transition to executive chair, Bezos wrote “it’s clear to me that we need a better vision for our employees’ success.” He dismissed claims that the retailer, the country’s second-biggest employer, treats workers poorly, and didn’t address Amazon’s extensive efforts to stop workers from unionizing.  

Executive pay continued to surge last year. Median CEO pay at the biggest US public companies hit a record $13.7 million last year, up from $12.8 million in 2019, according to a Wall Street Journal analysis. Median CFO pay rose 7% to about $6 million.

  • Executives’ temporary salary cuts early on in the pandemic were offset by more-valuable stock-based compensation.
  • A number of employers also paid for executives’ personal travel on corporate jets last year, citing pandemic precautions.


US childcare providers are getting a needed lifeline. About $40 billion in stimulus funds are going to childcare providers and early childhood educators. As of the end of last year, about one in four childcare providers—overwhelmingly owned by women—had closed since the start of the pandemic.

  • Childcare availability and affordability is a factor in working parents’ ability to return to work. Mothers aged 25 to 54 remain out of the workforce at higher rates than other groups since the pandemic started.


Return to workplace speed round:

  • Ford has equipped its headquarters with sensors to alert managers when the number of people in a space exceeds a safe capacity. It has also created mobile videoconferencing carts, with high-end cameras and screens, that can be rolled around.
  • Phased return to the office has been a common tactic for multinationals operating in Australia, where Covid cases are low and the return to workplace is well underway. Dell Australia, for example, has four phases, stepping up from zero to 10% of the workforce in the office, then 50%, before allowing anyone to return.
  • IBM has made a day-in-the life video to show employees what to expect when they return to the office. It’s also distributing an 18-page back-to-work manual, which you can view here.
  • Salesforce is allowing vaccinated workers to return to some of its offices, and extended the option for employees to work from home through at least December.
  • Uber will let its employees work from home up to two days a week starting in September. The company said two-thirds of its staff preferred such a hybrid approach.
  • Big law firms including Wilson Sonsini Goodrich & Rosati and Willkie Farr & Gallagher won’t require attorneys to return to the office before next year.
  • Office occupancy averaged under 25% of pre-Covid activity nationally for buildings using Kastle access systems, as of April 7.


Here are some of the best tips and insights from the past week for managing yourself and your team:

  • Take control of the start of your day. Start your morning by reviewing your emails and addressing any urgent ones for 10 minutes. Then give your focused attention to a priority task that you teed up at the end of the previous workday. Ideally it will be something that feels good to do, and then you can move on to more stressful tasks after that.
  • Try peer coaching. Facilitated sessions of small groups of workers roughly equal in experience and position can have benefits that one-on-one coaching does not. Such peer coaching can provide better accountability to following through, an enduring support network, and access to diverse perspectives on your challenges.
  • Avoid the workcation. You’re meant to have time off when you’re on vacation, so take that seriously. Dabbling in work while you’re on holiday can prevent you from unwinding, and also bring feelings of guilt for not getting more work done.
  • Transcribe your meetings. AI technology can now relatively accurately generate text from videoconferences, creating a searchable archive of what’s said in meetings. That’s useful for colleagues to catch up on discussions they missed in remote and flexible work situations.
  • Drop some of the “ands” from your writing. Often items you list will effectively duplicate each other, making your point more effective if you trim them. So, for example, “This approach will alert and inspire our most important and relevant customers” is better as just “This approach will inspire our most important customers.”  

Coda

Enjoy your boba while you can. The supply of tapioca used to make bubble tea (aka boba tea) is running worryingly low. It’s stuck on ships from Asia delayed in unloading because of a shortage of workers at ports jammed with an influx of goods to feed the recovering economy.

White bread has gotten a lot pricier since the pandemic started. The cost of a standard rectangular loaf has risen 13% since January 2020. Higher labor costs and a more than 6% increase in the price of wholesale flour are likely to blame.

Pandemic “brain fog” is a real phenomenon. Neuroscientists say difficulty thinking clearly and remembering things can be explained by the trauma and isolation of the past year. Fortunately, they expect the cognitive fog to lift as we resume normal interactions and more varied lives.

The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together. You can sign up here to receive this briefing by email.