00:00:00
Peter Cappelli: Because, particularly when
you're beginning your career, you know, you don't know much
that more experienced people
00:00:06
take for granted. Like, how do
you get along with people? How do you know when you're not
irritating somebody when you're
00:00:12
trying to get help from them?
How do you read the boss's emotions, then get a sense
informally about what's going
00:00:20
on, what the priorities are? You
know, the gossip that helps you understand why somebody got
fired that you're never going to
00:00:26
see in a memo, right? You only
learn that stuff if you're there face to face, right? And it's
important to remind ourselves,
00:00:34
everybody who is saying how
wonderful it is to be hybrid are people who began their careers
not hybrid, right? They began
00:00:42
their careers in offices where
they learned all this stuff. You know, I'm not in an office now,
right?
00:00:48
Dan Loney: Welcome to the Ripple Effect,
the podcast that takes you on a journey through the minds of
Wharton faculty. I'm your host,
00:00:54
Dan Loney. And in each episode,
we'll be diving deep into the inspiration behind the
groundbreaking research that
00:01:01
Wharton professors have
conducted and exploring how their findings resonate with the
world today. Loney: Well, certainly the
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pandemic changed the way that
many of us think about work. We were able to be successful in
our jobs working from home, but
00:01:17
as we move farther away from the
days of the pandemic, more jobs seem to have a hybrid component
in them. Three to four days a
00:01:24
week in the office and maybe one
to two days a week working from home. But there are issues that
pop up when you look at hybrid
00:01:32
or remote work. Peter Cappelli
is a Professor of Management here at the Wharton School, as
well as director the Center for
00:01:38
Human Resources. He's also co-
author of a new book titled, <i>In</i>
00:01:42
<i>Praise of the Office: The Limits
of Hybrid and Remote Work</i>, and
00:01:46
he joins us right now to discuss
the new book. Peter, great to talk to you. How are you, sir?
- I'm good, Dan, thank you. - Take
00:01:53
us through, I guess, let's start
out with the importance of doing a book like this, especially
right now.
00:02:00
- Yeah, I think there are -- there's
a practical reason, and there's a bigger reason. The practical
reason, I think, is lots of
00:02:06
employers, and by the way,
employers, in case we haven't noticed, have all the marbles
here. They control everything
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about how we're going to work.
And I think employers have -- many of them did not want to stay
remote or hybrid. They wanted to
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come back, and they expected to.
But the problem is, they never quite told anybody that. And
surprisingly, in 2022, surveys of
00:02:36
employees said they understood
why they would have to come back to the office, 88 percent, it was a huge
proportion. But if you wait five
00:02:44
years, you know, then people
start to get a little irritated if you ask them to come back. So
part of it is employers now, I
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think, are rethinking whether
they wanted to keep this arrangement, which they never
often really stamped and
00:03:01
approved, partly because they're
seeing productivity issues, and partly, because in hybrid places,
I think what's really irritating,
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so they can't see, you know,
performance so clearly, is attendance. They're just finding
nobody's coming in. So I think
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that's the practical reason.
There's a conceptual issue that concerns me more generally, and
we've talked about this at least
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once before, and that is, I
think there's been this drift over time toward management of
employees being worse and worse
00:03:34
and worse and worse, and just
cutting, cutting, cutting. We're seeing this on lots of things
now. But there's a kind of
00:03:41
belief that is growing in
influence that you really don't have to manage people. They
don't have to be together, they
00:03:48
don't have to be in an office.
You don't do anything for them, really. Just tell them what you
want them to do, and if they
00:03:55
don't do it, fire them. You
know, and there's 100 years of research showing that's not
true, but lots of people want to
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believe it, and so that's
another reason for doing this book. - What has been lost then by not
having employees in the office
00:04:13
five days a week? That inner
office connection obviously, is probably part of this. - Yeah, well, I think the --
it's not clear you'd lose
00:04:21
anything with four and a half
days in the office, but human contact and connection matters,
and we've known this for 100
00:04:28
years of research. You know,
some of it is we're engaged and we're committed to the people we
work with, not the logo on the
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building, especially now,
because those just flip all the time. So it matters for those
reasons. We also learn a lot
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from each other. We, if we have
a good workplace, help each other in various ways. We solve
problems a lot faster. When we
00:04:49
have conflicts, they don't
escalate the way they can if you're doing it by email. So
there's lots about the way work
00:04:57
gets done in offices that maybe
wasn't so clear to us before, because we never separated
office work from an office
00:05:06
structure. But now we're trying
to do office work without an office structure, and you can
start to see how some of these
00:05:13
problems are popping up. - What about something like
career advancement? I mean, if
00:05:17
somebody is out of the office a
couple of days a week and maybe doesn't have as much of a
connection to the office on a
00:05:23
daily basis, might there be an
issue there as well? - Yeah, so you know, there
were about 25 years of serious
00:05:30
research about remote work
before the pandemic, and it was all about the circumstances
you're describing, and that is
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you've got some people in the
office and a few who are not in or not in very often, and the
way hybrid is playing out, this
00:05:44
is maybe more likely than we
would think. Even though we have anchor days, people aren't showing
up for them. So if you're in the
00:05:51
office, the prior evidence was
overwhelming that you got ahead, and if you were not, you didn't.
Everything was worse, work wise,
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for you. You didn't get promoted
as often. Your wages were lower. Your engagement was lower. Your
commitment was lower. Your
00:06:06
turnover was higher. So you
know, if you have to choose and you are going to be the outlier
at home when your colleagues are
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in the office, just expect it
might be worth it for you, but your career is likely to take a
hit.
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- What about for new employees? It
seems like one of the stories we've heard a lot in the last
few years is, you know, kids
00:06:26
coming out of college, going
into the workforce, have developed this expectation that
hybrid work is how they are
00:06:33
going to work their career. - Yeah, they might
think that. I always ask their parents, and when you get a
group of people in a room for
00:06:43
executive education and other
things, and many of them are big fans of hybrid, you know? But I
asked him, "If your kid had a
00:06:50
choice of going into the office
or working remotely, what would you tell him?" And virtually
everybody says you should go to
00:06:56
the office, right? Because,
particularly when you're beginning your career, you know,
you don't know much that more
00:07:02
experienced people take for
granted. Like, how do you get along with people? How do you
know when you're not irritating
00:07:09
somebody when you're trying to
get help from them? How do you read the boss's emotions, then
get a sense informally about
00:07:17
what's going on, what the
priorities are? You know, the gossip that helps you understand
why somebody got fired that
00:07:22
you're never going to see in a
memo, right? You only learn that stuff if you're there face to
face, right? And it's important
00:07:30
to remind ourselves, everybody
who is saying how wonderful it is to be hybrid are people who
began their careers not hybrid,
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right? They began their careers
in offices where they learned all this stuff. You know, I'm
not in an office now, right? And
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I've been at Wharton for 40
years. I've got a pretty good idea how the place works. Doesn't
hurt me that much. It probably
00:07:53
does hurt my junior colleagues
that I'm not there more often. I should confess I'm on sabbatical
now, so I'm not required to be
00:08:00
in the office. But that's a big
issue, a generational divide. Senior people don't want to be
there. They don't need to, but
00:08:07
junior people need them there. - Well, and this goes a
little bit to another topic that
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you and I have talked about on a
variety of occasions, is that of workplace culture and how valued
that component has become for
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the office, not even, you know,
after the pandemic or during it, but before that it was
starting to really gain in
00:08:28
value, in terms of having a
successful office, partly was because you had to have a great
culture.
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- Yeah, I think, for sure,
employers at the top have recognized that's something
they're supposed to do is build
00:08:41
the culture. When we say
culture, we really mean, what are the rules, unstated, that tell
you how you're supposed to
00:08:47
behave and what's important? And
you learn those rules by watching, right? Seeing who gets
rewarded for what, who gets in
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trouble for what. What do the
senior people do? What do they seem to value? And it's not the
sheet of paper that comes around
00:09:02
and says, "This is our culture,"
right? Those things are all aspirational, and they
all kind of say the same thing.
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But it does matter if people
understand the same unwritten rules about how things are
supposed to work, and you can't
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learn that if you are remote, at
least not now, the way things are operating now. - But
00:09:22
we do occasionally see companies
calling back employees full time. Is the expectation that it's
going to continue that way kind
00:09:30
of in dribs and drabs? That
firms will kind of reach some kind of boiling point, or some,
you know, component, and they
00:09:38
feel like they need to bring
employees back full time? - Well, there's a stunning survey
done by KPMG this year where
00:09:46
they say that they've surveyed C-
suite people, and that 83 percent, I think, say they expect everybody
to be back in the office within
00:09:55
three years. Are they right
about that? You know, these forecasts are rarely very accurate. But for
sure, there doesn't seem to be
00:10:04
any uptick in push to get people
out of the office. And by the way, for people who think this
is all just about cynical
00:10:13
managers, if they were really
cynical and just cynical and cost conscious, it's way cheaper
to not have an office,
00:10:21
right? It's way cheaper to just
push everybody out and send them home and try to get things done,
because you save all that office
00:10:26
space overhead costs, right? And
the fact that they're not doing that means they must see some
kind of value.
00:10:32
- But are there scenarios where hybrid is maybe the best
option for an individual
00:10:39
employee? - Well, for sure, for employees. I
mean, this is why this is so politically charged, right? For
employees, many of them have
00:10:47
built lives around hybrid work
arrangements. Unfortunately, they've also built lives around
the lack of enforcement of
00:10:56
hybrid arrangements, you know?
Like, you have anchor days, but nobody's expecting you to be
there, and nobody's enforcing
00:11:03
them, right? And then you
adapt to that, and then, of course, you're all irritated
when the companies do start
00:11:08
enforcing those rules. But you
could get a lot -- I mean, this is mainly what our book is about.
You could get a lot of the
00:11:15
advantages of in person, and not
have everybody there four days a week or five days a week, but
you have to be a lot more
00:11:24
purposeful about it, you know?
If employees are only there two days a week, and by the way,
it's not going to be the same
00:11:30
employees all the time now,
because companies have shrunk their office space. They
can't even get everybody back
00:11:36
anymore at once. So if
that's the case, and I'm a new employee, it's going to take me a
long time to figure out even
00:11:44
what my peers and bosses are
kind of like as people. And that all has a cost, right? You could
speed that up, but you have to
00:11:53
be purposeful about it. You
could speed up social interactions, but you have to be
purposeful about it. And so far,
00:11:59
the problem, and one of the
motivations for this book, is that we haven't been purposeful.
We basically just sort of
00:12:04
assumed that people who are in
remote and hybrid are really just the same as they were in
the office, and it's not.
00:12:11
- How do you, then, do you expect
to see this play out over the next several years ahead? You
know, where does
00:12:18
this -- when we revisit this in a
decade, where are we looking? - Yeah, I try not to make
predictions, because I'm rarely
00:12:26
very good at them. One thing
which is quirky, though, about we have an equilibrium, that view,
which we hear a lot. You know,
00:12:34
just the equilibrium keeps
changing, right? Is that employers, and particularly human resource
people, you see this a lot,
00:12:41
really, really want to fit in
with what everybody else is doing. And right now, quite
unusually, we have just a big
00:12:52
variety of practices across
organizations. Is that going to be stable? Are employers going
to grow, used to the fact that
00:13:00
what they're doing is not what
everybody else is doing? And I don't think so, right? So if you
saw, after Amazon announced at the
00:13:08
beginning of this year, they
were bringing everybody back, there was suddenly an uptick of
other big companies doing the
00:13:14
same thing, right? When Jamie
Dimon announced that, not only are they bringing everybody
back, but they're building a new
00:13:19
building sort of suited to
everybody being in the office, ears perked up around Wall
Street, and that started to
00:13:26
shift there too. So I don't
think it's going to be stable, but I also don't think that by
next year everybody's going to
00:13:35
be back in the office either. I
think it'll be a years long change exercise.
00:13:39
- So then when a new employee gets
an offer and it includes a hybrid component, how do you
think they should view the offer
00:13:48
and how they should view going
into that job? Because I think you and I both, I think, feel
that the value of being in the
00:14:00
office, if it's four days a
week, if it's five days a week, it is really valuable,
especially for a new employee.
00:14:06
- Yeah, well, I guess what I would say
is, to some extent, nobody will prevent you from being there
more than the anchor days, right? But if
00:14:15
you've got an organization with
say, oh, it's hybrid, but it's only two days a week, and you
ask them, you know, "How is
00:14:21
that determined?" Well, every
local manager gets to decide, which is often the case. I
would, other things equal, not
00:14:28
go. And the reason is because,
even if you're going to go in, people are not going to be
there, right? And you won't get
00:14:35
the benefits of being there,
right? So, you know, I would say when you're beginning your
career, you need to meet people,
00:14:42
you need to learn, and you're
going to learn by watching and asking questions. That's really
hard to do if it's not face to
00:14:50
face. So if you think it's not
going to work, even if you can go in, unless other people are
there, it's not
00:14:56
going to help you. - How do you
hope that this book resonates in the workplace moving
forward?
00:15:02
- Well, you know, I hope what
would happen is that employers take this more seriously. That
is the question. But also, okay,
00:15:11
we want to be hybrid. How can we
do it better? And will they be willing to do that? I don't
know. To be honest, I'm not the
00:15:21
most optimistic person. But it
requires effort and time from the senior people in the
companies. And I guess the trend
00:15:30
I've been seeing over the recent
years is that they're less and less interested in hands on
management, and more and more
00:15:37
interested in being the kind of
outside boss who's cutting deals, who is doing M&A's, is working on
finance. And the inside of the
00:15:47
organization doesn't have a lot
of direction, you know? And this will take a lot of direction to
make this better. Now, maybe
00:15:54
there's a way to delegate that.
If you have a Chief Operating Officer, for example,
maybe there's a way to delegate
00:16:01
that. It's not going to -- by the
way, human resource people do not volunteer for this job,
because if they give it to you,
00:16:08
you don't have the power to
execute it. You're just going to end up looking bad. So, you
know, it can't be delegated to
00:16:15
lower level people. It can't be
delegated to people who don't have power. And it's not going
to work if you let each little
00:16:22
group decide what they're going
to do. You're quickly going to get a race to the bottom,
because nobody wants to be the
00:16:27
bad guy telling their employees
they're the ones who have to come in. - Peter, always great to talk with
you. Congratulations on the
00:16:34
book, and look forward to
chatting again. - Thank you, Dan, and happy birthday. - Thank you
very much. And the book is
00:16:40
titled, <i>In Praise of the Office:
The Limits of Hybrid and Remote</i>
00:16:44
<i>Work</i>. Peter Cappelli, our guest,
is the one of the authors, Professor of Management here at
the Wharton School, and director
00:16:50
of the Center for Human
Resources. - Thank you for listening to the Ripple Effect.
We hope you found this episode
00:16:56
informative and engaging. Don't
forget to subscribe and leave us a review so that we can continue
to bring you the best insight
00:17:03
from the Wharton School.