Remote-First: Desire and Reality

After Pandemic and the (supposed) return to the office, the debate about a fundamental stance on home office and remote-first is now in full swing.

The spectrum of positions on the subject is broad. For example, Elon Musk has taken an opinionated stance against more remote work (he thinks it’s unfair that home office is only feasible for some jobs), while others, such as renowned HR analyst Josh Bersin, recommend a more pragmatic stance on the issue.

At the same time, of course, employees themselves have their own views and needs regarding remote work. In this confusing situation, it is becoming increasingly difficult to understand the current status of remote work and to identify a clear trend for the future.

To add some transparency to the tangle, in this blog post we’ll take a look at what the current state of remote work implementation is, what factors influence employees’ perspectives, what employers are concerned about, and what strategies companies are pursuing with remote work in the long term.

1. The Current Situation: Workplace vs. Remote

First of all, it’s worth taking a look at the numbers. According to a survey conducted by the Munich-based ifo Institute in April 2023, around 24% of employees in Germany work at least partly from their home office. Before the pandemic, it was only about 10%.

The international comparison: Figures from the Gallup polling institute from the USA show for the past year that approx. 30% of employees in remote-compatible jobs worked completely from the home office, approx. 50% in hybrid models and only approx. 20% completely at the workplace.

The decline in the share of remote work expected by Gallup is only beginning to be seen, at least in Germany. For example, despite all the debate, the proportion of home offices fell by just 0.7% between February and April 2023.

It is important to note differences between industries. According to the ifo Institute, the share of remote work in the pharmaceutical industry recently rose from 21.6% to 32.8%, while it fell from 47.1% to 40.1% among lawyers, tax consultants and auditors.

Unsurprisingly, there are generally significant differences between those industries that require attendance (such as hospitality, with only 1.6% remote work) and those where work can usually be done easily from home (such as IT, with about 70% remote work).

2. Remote-First: Workers’ Perspective

The actual situation does not necessarily say anything about the actual preferences of employees with regard to remote work. A Gallup survey of 8090 workers from remote-compatible jobs in the U.S. provides detailed insights here:

  • About 90% of workers in remote jobs want some degree of flexibility, and about 80% expect the same from their employers.
  • Of these workers, most prefer to be in the office two or three days per week. Preferences are generally broad, however, as many also desire no attendance at all or only one day of attendance per week.
  • A breakdown by different career stages shows hardly any differences with regard to the distribution of these preferences.
  • Monday and Friday are the least preferred office work days.

With regard to the employees’ wishes for hybrid working, one finding in particular stands out from the study:

“Hybrid employees who don’t have to be in the office are currently more engaged and more likely to believe that their company cares about their well-being. These hybrid employees also have lower burnout and say they are less likely to leave their company in the near future than those who are required to be in the office a certain number of days.” (Gallup)

So it seems that remote work has a positive effect on employee engagement on the one hand, and on the other, that the trust placed in them leads to a stronger bond between employees and their employers.

This assessment is also consistent with Gallup’s finding that collaborative design of the hybrid work model (versus top-down prescription by the employer) is strongly desired by employees and manifests itself in higher engagement.

3. Employer Perspective: Retention & Performance

For employers, the discussion of remote-first is not infrequently fraught with worry. For example, there is a fear that internal exchange and employee retention could suffer from too much home office.

In fact, based on his years of experience, HR Analyst Josh Bersin recommends a minimum of one to two days of office attendance per week. For young employees in particular, this is an important prerequisite for getting to know the culture of a company.

But concerns about lower levels of productivity are also causing headaches for some employers. Quite a few of them therefore resort to technological solutions as part of performance management. Such technologies can, for example, identify all those activities of employees that are not related to the job, e.g., browsing the Internet. On the other hand, such technologies can also be used to detect when the workload becomes too heavy for individual employees.

Regardless of the specific application of such technologies, the right to privacy of employees naturally applies. Without their specific consent, the possibilities for technological monitoring of employees in Germany are therefore severely limited.

In any case, the insights from the previous chapter should make it clear that trust and collaborative design of performance metrics can lead to higher engagement over the long term than distrust and monitoring.

4. The Current Status of Remote Strategies

For companies, the issue of hybrid work comes with some strategic considerations. These relate, for example, to the use of technology, the collection of data and the organization of the workplace.

In the course of a survey, McKinsey & Company finds that while many companies are taking technology- and data-related measures, even the most advanced among them have not implemented a holistic approach – that is, a “truly hybrid” model, as McKinsey puts it:

“The survey results show that nearly one-third of the strategies we queried, including collecting employee sentiment data and addressing sustainability, are being consistently implemented. Another third of the processes we identified as best practices – such as using modern workplace technologies and creating systems for location-independent working – were reported to have been adopted by a smaller number of companies. Another third of the best practices, including implementing a test and measurement system and documenting processes, are not being adopted by even the most progressive companies.” (McKinsey)

While McKinsey acknowledges that the 12 specifically defined practices (see figure) for a holistic remote strategy would require a lot of work, the benefits (e.g., office rent savings, higher employee satisfaction and performance) are so clear that the effort is worth it.

So despite initial achievements, it seems that “time-honored beliefs” and “falling back on habits” are significant barriers to a truly hybrid world of work.