Wharton management professor Peter Cappelli is the author of the new book, The Future of the Office: Work from Home, Remote Work, and the Hard Choices We All Face. Cappelli, who has for decades studied the forces shaping and changing the workplace, says the choices employees and employers must make about the future of work could be among the most important they face.
Brett LoGiurato, senior editor at Wharton School Press, sat down with Cappelli to talk about his new book. They discussed work during the COVID-19 pandemic, the complications with return-to-office hybrid models, and how employees and employers can make the best choices about what to do.
An edited transcr1ipt of the conversation follows.
Brett LoGiurato: Could you share your overall message about what you believe is at stake for the future of the office?
Peter Cappelli: I don’t think it’s going to surprise many people to get the sense of how big an issue this is, about whether we go back to the office or not. If you think about the value of commercial real estate, what happens if we don’t need offices and all the supporting services and the little businesses and restaurants that support offices? And commuting? All those sorts of things matter. In addition to whether this might be better for employees, one of the things we know is that not everybody agrees that they want to work from home. There is the issue of whether it’s actually going to work for the employers, and that’s not completely clear.
Part of the message of the book is that we don’t know how well things worked during the pandemic’s work-from-home phase. A lot of organizations said that things were fine. A lot of employees said they got their own work done. But closer examination is suggesting that maybe it wasn’t quite so great and things didn’t work quite as well, and more to the point, there were a lot of things that were unique about the pandemic that are not going to carry over afterward.
For example, most people felt a special effort to pull together and try to get things done [because] we were keeping businesses together and keeping our jobs together. Is that going to continue afterward? Post-pandemic is unlikely to look much like what happened during the pandemic. We know a fair bit about that situation because we’ve studied it. We’ve studied telework for quite a while. That is regular businesses operating more or less as they did, with some people working at home and some people working in the office. The results there were not as nice as you might expect. People working remotely don’t do as well, and their careers don’t do as well, either.
Understanding what we’re getting ourselves into matters a lot. There are so many options in terms of working from home: if you do it, how much you do, and how it’s carried out. It’s important to get the ones that we pick right, to make sure we understand that decision. And it’s important to prepare for it because the way we choose has lots of implications for how businesses need to be managed and how the careers of people unfold.
LoGiurato: You’ve been researching the workplace for decades, and in the book, one of the points you highlight is how this change is so much different than others. Can you explain that?
Cappelli: Anybody who’s interested in the workplace knows that there has been a flavor-of-the-month feel to a lot of the press over the last couple of decades. A lot of the things that are presented as the future, the “new normal,” never happened. Like the coming labor shortage in the early 2000s, which never happened. The big issues around millennials — it turns out that there’s no evidence any of that is even true. We’re going to have driverless trucks. Three years ago we were preparing for the elimination of all trucking jobs, things that may at some point happen, but in the meantime, they’re no big deal.
This pandemic is going to lift at some point. It’s dragging on longer than we all thought, but at some point, we’ll have the opportunity to go back to work, and employers have to choose. You have to either be in the office or let people stay home or find something different. This one is right on top of us, and it’s going to matter in ways that are completely obvious. That’s why it’s a big deal and, in this case, we haven’t paid enough attention to it. We’ve spent way more time on all these previous topics, and then this one is staring us right in the face, and we haven’t thought about what it means very carefully and how to choose what to do.
LoGiurato: What’s your best advice for those employees who dread a return to an in-person workplace?
Cappelli: I think the variation in people’s experience in working from home is quite remarkable. There are some people who liked it; there are some people who didn’t. A lot of that depends on your life circumstances. Even those who were grateful to be able to do it weren’t necessarily having fun. There’s evidence that stress levels are up and hours of work were up for people working from home.
The people who are grateful for the opportunity to keep working from home are thinking about the alternative, which was no job or trying to work in the office without child care or with sick parents we have to take care of, and all those things. To some extent, I don’t think we’re quite making the right comparison. What we’re thinking about now is something that happened about two years or so before, when we think about what normal used to be. For most people, it wasn’t so bad, and it wasn’t like imagining working in the office during the pandemic.
Going back to the office will probably not be so bad. I hate to say this, but it’s a little like when we were kids going back to school, which we all dreaded. As soon as you started to do it, you get back into the rhythm and it’s not such a terrible thing. But I don’t think it will be as bad as most everybody who is worried about it seems to be thinking.
LoGiurato: What do you believe employers have to do to make their employees feel engaged about future plans in the near term and in the longer term?
Cappelli: The problem that employers have if they want to go back to the way they were operating before, which means bring everybody back to the office, is that the discussions in the broader community and in the press have given people the impression that you don’t have to do that and that you can keep working from home. [Employers] have to fight this expectation that has been created. Some of that is about communication and explaining to our employees why it is important for them to come back to work, why it is a business necessity and not something quirky that the boss happens to want to do. If you can’t come up with that story, then you’d better rethink what your policies are.
“People working remotely don’t do as well, and their careers don’t do as well, either.”
It is a bit of a change to bring people back, and this is a bit like managing organizational change. The first step is, “Why do we have to do it?” The second step is to explain to people what it’s going to mean, particularly with respect to safety. My guess is there will still be some health concerns when a lot of people are coming back.
If we’re offering something else, we need to think about how to present that. If we’re going to have some different alternatives for working, we have to think about how to explain that in some detail. But I would say the smart thing to do is also to tell employees that this is an experiment, that we’re going to see how this works. It’s not the same as it was during the pandemic when everybody was at home and the economy was more or less stumbling along. This is a pretty different period, a different experience, so we want to try it out, see what works, and then adjust. I don’t think you want to suggest to people that whatever you’re putting in place is going to be there forever, because if you have to change it and walk anything back, that’s a tough thing for employees to swallow.
LoGiurato: Two distinct types of hybrid work that are being discussed. Which has the most potential?
Cappelli: We’ve all heard a lot about hybrid work, and it seems most employers are saying that that’s what they want to do. The problem with saying you’re going to have hybrid means that it’s not going to be everybody in the office, and it’s not going to be everybody at home. There’s a world of difference between those two extremes.
There is one approach to hybrid that is quite clear, and that is that we will let some employees — not all of them — work at home permanently, that you can be out of the office on a permanent basis. And there’s another that says you can work from home occasionally. Those two choices are fundamentally different. If you are somebody who says, “I want to work remotely on a permanent basis,” you may think that’s great. “I get to live where I want.” All that is true. Your career is [also] going to suffer. You should accept that because unless organizational life changes fundamentally, the people who are going to be in the office have advantages over you. It’s easy to forget about the people who are working remotely, and the first thing that will happen is you’re going to lose your office. That’s why employers want you to work at home permanently. If you do, they can save on real estate space.
“What’s going on with employers right now, which is understandable, is they don’t want to be out of sync with the market.”
The second type of work-from-home hybrid model is where you keep your office, you work more or less in the office, but we allow you some flexibility as to when you might be able to work from home. That is a trickier one for employers. For employees, everybody likes the idea of having a choice. “I should be able to work from home when I want and come in when I want.” The reason this is tricky for employers is it’s not clear how it benefits them. It’s not saving real estate to do that unless we try to move to a hotel-y model, where you only share an office when you come in, which is a tricky arrangement. The complication is scheduling. Everybody gets to pick the day that they want to work from home. Well, that’s tricky to have meetings because some people won’t be here, and then we end up with this half and half, some people calling in, some people in person. It’s going to be clunky to do. If you’re trying to do real team-based work like traditional agile stuff, which are project-based things face-to-face, the problem is if everybody is picking their own day, you can’t do that very well.
Similarly, it’s a little tricky if you say, “OK, you can work from home on Tuesdays and Thursdays.” If you do that, it doesn’t necessarily benefit employees. They want to work from home on the days that suit them. It ends up being quirky for employees. These are some of the trade-offs we have to manage.
LoGiurato: A common theme is that a lot of them don’t know what they’re doing yet. Are there companies you see as leaders in the ways that workplaces are changing or not changing post-pandemic?
Cappelli: There is a pretty clear divide. If you look at the investment banks in New York, the big banks have been very clear that they want everybody back in the office. This is the way business is going to work. The tech world has been the opposite, making lots of changes or promising employees a lot of ability to be flexible and work remotely, but there are outliers in the tech world. Amazon, for office work, is basically a tech company. And they’ve said, “No, we’re all coming back.”
A lot of companies are talking about some flexibility, but they’re not being very specific. What’s going on with employers right now, which is understandable, is they don’t want to be out of sync with the market. They don’t want to be the one announcing, “You can’t work from home,” and then all their competitors say you can. They’re afraid everybody will bolt and go work for their competitors. I don’t think this is true, but that’s what they’re worried about.
Virtually everybody is in this big middle, saying, “We’re going to do something,” but they’re not saying what they’re going to do yet. That’s of some concern to the employees who would like to know.
“Options and choices sound like a great thing, but they also cause a lot of problems.”
LoGiurato: Was there any data or research that you found particularly surprising?
Cappelli: What we had seen in the press from the experiences of employers and employees had been universally positive. Some of this may have been editorial selection. It’s much more of a “Man Bites Dog” story, at least in the beginning, to discover that you could shut offices down and everything was going fine. No public company CEO wants to tell the world that they’re struggling, so there’s a lot of selection going on.
What we’ve seen more recently is some evidence in different kinds of workplaces where we can quantify stuff. And what you find is that things didn’t go as nicely as you would think. Hours of work were actually higher for people. There’s some evidence that traditional boundaries, like post-dinner — particularly for people with families — are broken. There was a lot more work after the dinner hour being done by people. Stress levels appear to be higher, as well.
In general, there’s a sense that this was not quite as wonderful as we thought. Some of this is understandable. At the very beginning of this, what’s your comparison? Your comparison is the place we shut down. Otherwise, if we can’t work from home, we don’t have a job. After a year and a half of being at it, your comparison changes. It’s no longer [not having a] job… It’s not much fun. That’s what we started to see in the data more recently. It’s not particularly surprising, but it is different than what the popular perception had been.
LoGiurato: If there’s one lesson you want readers to take away, what would it be?
Cappelli: The biggest single issue is that choices create problems. The opportunity to work from home sounds like a great thing. Why not give everybody opportunities? But making those choices matters a lot. If you raise your hand and say, for example, “I would like to work from home permanently,” that has big consequences for you and also for the organization. And some of the consequences for the organization have to do with supervisors. A big chunk of us have to supervise somebody, and supervising people remotely is a different experience. It’s a different kind of work to do. A hybrid model, where you have some people in the office and some people working remotely, for supervisors trying to manage, is tricky. Options and choices sound like a great thing, but they also cause a lot of problems.
For many professionals and some white collar workers it's possible to perform a lot of their work from home. However I think that to keep some company spirit going and ensure that company policies are carried out that those who work from home will need to spend a day or two a week in the office.
Hot desking will become more normal and companies will save money by having smaller offices and paying less on rent and utilities. Cloud computing is readily available an with 5g on the horizon Internet speeds will certainly make from home easier.
I’m not sure it will be the norm, but I think it has changed the perception of home working. I thought about the company I work for. I worked from home for a while at the start of the problems before being furloughed as did many of my colleagues. If more of us from my company worked from home, there would be less need for office space which could be freed up for storage, something we desperately need, without moving premises.