[00:00] Introduction
Jeff: Hello. Today, I'm joining you from our beautiful headquarters here in Salt Lake City.
In a recent survey Ivanti did of 8400 knowledge workers and leaders around the globe, 43% of office workers reported being able to work remotely or on a hybrid schedule that they chose. However, 71% said they'd like to work remotely or on a hybrid schedule fully of their choice.
This represents what we're calling a preference gap, in fact, a 28-point preference gap. And there's been a ton of research and debate on the disconnect between employers and employees and where and how they get their work done.
I'm Jeff Abbott and you're listening to Executive Summary, a podcast where we unpack the most interesting research in IT, security and the future of work, and what it means for your business strategy.
And today, I'm joined by Nick Bloom, a professor of economics at Stanford University who was actually named the "Prophet of Remote Work" by Fortune Magazine. I'd like to hear more about that, Nick. Today, we're going to be digging into this two-class system that's emerging with remote work.
Nick, thank you so much for joining us.
Nick: Jeff, fantastic to be here. And just to fill you in, I am in Stanford University on campus in California.
[01:34] The preference gap: a talent recruitment opportunity?
Jeff: Outstanding. Well, Nick, I know you've had a chance to review the data from the survey. Why don't we just start with some of your initial reactions?
Nick: So I think it's amazing after three years of pandemic and three years of working from home that we still have this preference gap. So what it tells you is firms and employees are kind of struggling to figure out quite how this works.
And, you know, as the report talks about, this links very directly to quitting. If an employee's unhappy at work, you know, and they can't fix it at their current employer, they're going to move on.
So I think, you know, the big takeaway from that is the huge size of this preference gap, particularly three years in, we still haven't been able to fix that. And there's enormous opportunities, obviously, on the table because firms that can, can keep their employees and in fact recruit from other firms too.
Jeff: You and I both know there are some very well-known household brand names that have tried to say – tech brand names – “You're coming back and that's that.” And they have suffered for it, haven't they?
Nick: Yes, I think one of the key points of this for firms is there is a massive excess supply of workers that want to work fully remotely in comparison to what's out there in terms of demand from companies.
And that means if you really want to go after top talent, obviously one way you can do is you can pay a lot. You can pay an enormous amount of money and scoop the top talent. But look, for a lot of startups, small and medium firms, they can't outcompete some of the big brand names.
This highlights this kind of alternative strategy that's actually becoming much more appealing now. As the big firms pull folks back into the office, there's an increasing opportunity to scoop up kind of world-class talent by offering them fully remote working conditions.
[03:17] Remote work and the policy of choice
Nick: And what's really interesting is fully remote here means, classically, when I've talked to companies like Ivanti and many other companies that have this remote policy, they still meet in person, but it's maybe every three or four months.
So, you know, I was going to ask you what Ivanti does. But many companies say we have folks meet up, I don't know, in Salt Lake City or Albuquerque or Barcelona or wherever they are every three to four months just to know each other. But the rest of the time, you know, you're free to locate where you want.
Jeff: No question. Look, for me, I have kind of a fiduciary responsibility. We have all this real estate around the world, right?
And so to your point, by the way, I want to be clear. Our policy is choice, right? So you go to any office, you'll see people who come in five days a week, people come in once every other week, you know, groups that will meet on set dates throughout the month. It's kind of evolved.
About a year ago, I said, you know what, let's try something. And for every office we had “Homecoming,” and we allowed every office to have a homecoming party – kind of post-pandemic, let's get back together, reconnect and so on.
And the attendance was phenomenal. Every office had 90-plus percent attendance. We, you know, we threw a little budget at it. People had parties. Some people had bring your pets. Some people it was – in one office, it was prom. Hilarious, right?
But then it went right back down to very low regular attendance. We were just monitoring the badge traffic in the offices. So we have started to reconfigure offices for hoteling and teaming and so on, to your point, trying to kind of match that pattern we're seeing.
But there's really no, you know, clear path. You know, we're just going to have to, in my opinion, have to continue to be flexible. And it does, I'll be honest, it does present challenges for me as a leader.
[05:00] The tradeoff of choice and coordination
Jeff: And let's talk about that. This is kind of the next point I wanted to cover, kind of the barriers from a leadership perspective to extending this employee choice hybrid model. What's your point of view on, from a leadership perspective, the risks of that?
Nick: So I'm going to make three points here. The first two relate to and highlight what you've done at Ivanti as a very useful learning.
First is some employees really want to come in. If I think of my students at Stanford – in fact I was talking to some undergrads last night at an event and they were saying, look, I want to come in because I want a mentor. I want to learn from people. They’re also social. One of them said, you know, I'm in an apartment with five other people and I find it kind of hard to work from my bedroom. And, you know, we can't all work in the living room.
So there are some folks like that, but there are others that, you know, may be in their thirties and forties, have young kids, want to come in one or two days a week. So choice is really important for recruiting top talent because people have different views.
The other thing I loved is this homecoming. So if you ask people why they want to come into the office, the overwhelming reasons are to work with others and to socialize.
So, Jeff, if we're working together, it's way more appealing for me to come in if you're in the office and vice versa. Which means, actually in some ways, what you do want to do is have events once a month, whereby you throw in food, you have an event. People come in, they connect. It's much easier to build trust on nine Zoom meetings if we just spent yesterday having lunch and hanging out together.
Coming on to your question, and it leads to what's really being seen as a tradeoff between choice versus coordination. What I see in the market and what we see in this report is a bit of a mix.
So some companies for which face-to-face communication is critical on a kind of ongoing basis may get rid of choice and say, look, you've got to come in Tuesday, Wednesday.
Other firms may, you know, recruitment, retention is pretty critical. They're fighting like in tech, as you highlight in the report. That's, you know, been a very competitive talent market. You then allow people more choice and say you have a homecoming event once a month that enables people to connect up.
Jeff: Yeah. And I think, you know, if you stopped and talked to an Ivanti employee or, you know, a lot of these companies who are providing a lot of choice, they would tell you it's one of the reasons they love the company, right? It's one of the reasons they can appreciate that the leadership model has adapted, right?
But that's not to say that myself and my executive team are not, you know, constantly weighing the options and monitoring. Productivity has to be there, right? That's kind of table stakes.
[07:34] What’s driving quiet quitting?
Jeff: That said, though, you know, Nick, we know there's this new notion – it's probably not a new notion, especially for you, you've been researching for so long – quiet quitting, right? Which speaks to a mentality, then, and I really do believe that –
Look, you and I remember our first jobs out of school. Could you imagine not being in the office for the first few years? I mean, I met my wife on the company softball team, right? There's just so much that you get from that foundational experience in the office.
And the data from the study would suggest there is trouble, you know, for a fully choice-driven or hybrid model, lack of motivation, burnout, mental health issues related to, to your point, not being able to socialize and connect and collaborate in person. Does the kind of the research that you've done suggest that's an ongoing issue?
Nick: Yes, very much so. Quiet quitting, I mean, it's great the report goes into this. This is a real issue, and I think it reflects, actually, the post-pandemic differences in views on working from home.
So just to give you some rough stats I have in some data I've looked at, if you look across the American workforce, about 30% of people want to work fully remotely. About 20% want the exact reverse. They want to be in five days a week, and the other roughly 50% want some kind of hybrid.
Now, pre-pandemic, it didn't matter because everyone had to come in five days a week and so there was no variation. Suddenly you go to a world where some companies are offering something, some are offering others. People have different views, and there's an enormous reshuffling.
If you want to limit quiet quitting in your company, coming back to the topic of choice, if you allow employees to choose their schedule, they can achieve what they want with your company rather than be forced to move to somewhere else. So choice is one of the best ways to combat quiet quitting because basically employees feel, look, if I want to work two days a week, I can do it, say at Ivanti, if I want to work four days a week in person, I can do it at Ivanti. I don't have to leave and go to another company.
If you take other extremes, I mean, I won't name firms, but there are some firms that have been high-profile at forcing folks back to the office five days a week. That's where you're going to get quiet quitting. And you're particularly going to get it, if you think about who's going to leave, it’ll be folks who may be the primary carers of young kids that find it really hard to leave the house at seven and get back at six.
So it's not going to be random as well. It's not only quiet quitting, but you can also find you have a bit of a diversity issue with certain subgroups, finding it really arduous to come in every day and really missing that one or two days a week working from home.
[10:10] Using hybrid work to appeal to different employee profiles
Jeff: So, Nick, let's talk a little bit more about the point you made about the variety of sort of profiles of individuals that want this hybrid choice, you know, to be able to work whenever, wherever.
Nick: Yes. I mean, as a firm, as an employer, you can do fantastically well by understanding these markets and targeting them.
So as you say, one group’s digital nomads. In fact, you know, there's, looks like there's several hundred thousand of these or millions of them globally. These are folks who are high performers. As you mentioned earlier, you let them work fully remotely, maybe they come in, you know, every three or four months, as long as you evaluate performance.
There's another group that I think of like, they’re kind of like my Stanford undergrads entering the workforce. They're folks in their twenties – also, as it happens, kind of people in their mid-fifties onwards, you can think of them as maybe some of them are empty nesters – that are really keen to come in four or five days a week and being able to accommodate them is great. The younger employees in particular are looking for mentoring, they're looking for socialization. They also don't, they can't easily work from home.
And then I think there's a third group which tend to be more hybrid focused. If you look in the data, that tends to be people in their mid-thirties to forties, they have young kids, there are some folks that have some disabilities in there, maybe people that live very far from the office. They want to come in, but they don't want come in every day.
And as you highlight, if you allow choice, you can kind of access all three groups. All three groups in a way are essential for a company, because they're different parts of the production chain and it's very hard to do it with one very rigid system.
[11:42] Motivation and productivity in a hybrid work environment
Jeff: No doubt. And I like the point you make, that there's a responsibility from a management perspective to understand those various profiles. That'll give you more connectivity, kind of that, you know, that remote EQ, that digital EQ, you have to have just to stay in tune with the motivations of the various employees you have in each group.
And this is not easy. I mean, I have leaders who have 400 employees in India and 50 in Poland and then 80 in the Bay Area. And to your point, not only is it their personal circumstances, but cultural circumstances, that change kind of their motivation for in office, not in office, hybrid and so on.
So again, it's a massive management challenge, too. And this is what we're talking about when we say we need to build a leadership regimen to train the leaders to stay in tune with what's motivating those employees.
Nick: Yeah, I mean, Jeff, one other thing I'm sure I've heard a lot and that you raised earlier is about performance evaluation. One of the other things remote work has highlighted is the critical importance of performance management.
And it's very much not surveillance. It's very much like, you know, what's your sales target? Your product releases? Your milestones? Have you achieved these? We want to have regular check ins, talk to other people in your team, have performance data.
This stuff takes time and money, but it's become more critical because the alternative of seeing people in the office for people that are remote or hybrid is less available.
Jeff: We have to, right? There have to be ways to objectively measure productivity and attention to the appropriate work required.
[13:18] The technical barriers to addressing the preference gap
Jeff: And that kind of leads into a topic on this point of addressing this preference gap: the technical barriers, right? Either in the academic world or in the commercial world, it's difficult. You have to adjust your, kind of, your technical profile to adjust for this hybrid work. Is that something you're seeing as well?
Nick: Yes. You definitely need to be more organized on technical barriers. You need to be more organized on many dimensions, to you know, have a sense of where people are, what they're up to, have performance data.
So on monitoring, I think the key thing here is you want to monitor outputs rather than inputs. So it's not like anyone's monitoring, am I working this number of hours or replying this fast to emails or am I always at my laptop.
I don’t know if people remember back to 2020, but there are, you know, examples of companies taking random screenshots from your video camera. Which is, like, horrible! No one wants that.
That's what I would call input evaluation. It doesn't show anything. And in fact, there's a friend of mine that told me when she took her dog for a walk, her mom used to touch the keyboard every few minutes because they were keystroke monitoring. It's like totally counterproductive.
What people I think do want is output monitoring. So they say, look, here are your targets. I'm not going to check in on your hours. It's kind of like, you know, when I think of our undergrad students, we don't tend to tell them when to go to the library. We tell them they’ve got to hand in their homework and, you know, that's it. Or pass the test.
So that, I think, is the future and it's much more so – it requires being organized. It requires technical capability to collect data, to evaluate stuff. Basically, when everyone's in the office five days a week, you can maybe get away with a bit of disorganization because you're there and you can see it. It's much harder when you're remote. You've really got to be technically able, you know, to be tracking staff, evaluating things, to be on top of what's going on.
Jeff: On the, you know, on the commercial side of things, the complexities have gone through the roof.
You think of digital nomads. I mean, they want to use their device of preference to log on to the network and do their work. It could be a watch, right? Anything that's IoT-enabled these days, people tend to get some level of productivity from, therefore they want it to be integrated into their work environments. It presents a huge challenge for management teams and the IT organizations inside companies.
And, you know, it goes on from there, not only the devices but the network access. So yeah, there's a ton of work being done to just allow companies to enable hybrid work, not only to your point to get proper outcomes, but also to do it safely and securely. And we're seeing that as, you know, one of the drivers in this massive investment in tech.
[15:54] Action items: How you can tackle the hybrid work preference gap
Jeff: So, Nick, you know, with all of these conditions we've been describing, kind of the “here's the temperature of the water” – from your perspective, are there, you know, three or four things you would recommend leaders start doing today to address this, what we're calling this preference gap?
Nick: Yes, I think there's two things I'd do to address the preference gap.
So the first is, think about choice. So the issue of the preference gap, is people don't want the same thing. So some 20-somethings want to come in four or five days a week. Some 30-somethings with young kids maybe want to come in two or three. And then you've got digital nomads that maybe want to be fully remote. In order to keep them all happy, you have to have flexibility in what you're offering your employees. So that will be step one, some degree of choice.
It may be team by team. It may be that you've got a team of ten or 20 folks. They work together. You sit down. It's almost like, you know, democratically discussed with the teams so they're all on board. They may decide, look, we want to do this, and then you coalesce on it.
The other thing is good performance evaluation systems. So in order to make sure that working hybrid or fully remote works, you've got to have a way to evaluate people when they’re out of the office.
And in fact, that's liberating for them because not only are they working from home, they know they're not being assessed on, you know, clicking emails and responding quickly. They're being assessed on output. So that's things like 360 reviews, tracking deliverables, you know, speaking to other employees.
Those two are kind of critical. With those two in place, you should be able to keep employees happy and stop them leaving your firm in order to, you know, close that preference gap.
Jeff: You know, that's fantastic. I think if I read your points, it is about creating a little more flexibility in your policy. So one blanket policy, you know, you take your chances with that. You probably are going to continue with a preference gap. But if you can start to cater, you know, with a little flexibility both on the people side and the monitoring or outcome side, you're going to put yourself in a better spot to retain your best employees.
Nick: Yes, exactly. And alongside that and a way to make sure you can evaluate what people are doing, it’s odd to say it, but having good output evaluations gives them additional flexibility within the day.
So if I'm working from home, not just do I want to be able to work from home, I want to be able to say, go pick my kids up from school, but make up for it by working in the evening, you know, after they've gone to sleep. And you can only do that if you are assessed on outputs rather than, you know, time watching or speed of response to emails.
Jeff: Nick, this has been phenomenal. I just want to thank you for a terrific, terrific conversation. It's been a pleasure speaking to you. And we hope to speak to you again sometime.
Nick: Jeff, it's been fantastic. Likewise, really a lot of fun. And thanks very much for catching up.
Jeff: Listen, if you like what you heard today, be sure to subscribe and even better, share it with a friend or a colleague.
Check out the show notes for links to the research we talked about and some additional resources that we're happy for you to download.
You can find out more about Ivanti at ivanti.com, or follow us on social media @GoIvanti.
I'm your host Jeff Abbott, and I hope to see you next time on Executive Summary.