00:00:03
[Music] this is pete fader here the francis and paiwan cha professor of marketing at the
00:00:14
wharton school of the university of pennsylvania welcome to the fifth in an ongoing
00:00:20
series of meet the authors conversations that i've been having with various colleagues here from the wharton school
00:00:27
let's think uh number one we started off in january with my marketing colleague
00:00:32
michael platt talking about the leader's brain in march we stayed with marketing then
00:00:37
it was jonah berger talking about the catalyst in may katie milkman former operations information decisions
00:00:43
department spoke about how to change in june it was former colleague mauro gian now the dean at the judge school
00:00:51
over at cambridge talking about the platform paradox but today we turn to the management department
00:00:57
where it is my pleasure my privilege to be talking to another peter peter capelli the george w taylor professor of
00:01:04
management uh here at wharton director of wharton center for human resources we're going to be talking about uh the
00:01:12
future of the office work from home remote work and the hard choices we all face
00:01:19
uh peter for years you've been studying all the different uh forces shaping and
00:01:24
changing our workplace uh it's something you've been really deep into for a long time but
00:01:32
is it fair to say that nothing has impacted quite like covet yeah i think that's right you know
00:01:38
there's a flavor of the month feel to workplace issues a lot of it is pushed
00:01:43
by people who've got some financial interest they're selling a problem and selling a solution so we've
00:01:49
seen a lot of you know we're running out of people now we've got too many people
00:01:52
sort of stories but you know covet was this enormous experiment that was pushed on us
00:01:58
you know march last year we had 60 million people out of work it's just amazing and if you had told me
00:02:05
we wouldn't be back in our offices for more than a year if you told me that then honestly i would have said we'll be
00:02:11
living in caves and burning furniture for heat you know it's amazing that we
00:02:15
survived i mean it's it's just an astonishing story and so with that in mind you
00:02:21
you're kind of going out on a limb i mean you wrote this book back in let me
00:02:24
think 2021 when as as you said we thought this would all be over by the time we reached
00:02:31
november um so it's so it's pretty bold to go out there and kind of uh offer
00:02:36
observations and statements and predictions so tell us a little bit about your motivations for doing so what
00:02:41
the process was like and kind of how you feel it's gone well i guess the good news is it wasn't
00:02:48
a very long book so it didn't take all that long to write it i discovered that i was basically being asked to talk
00:02:56
about this all the time and of course the event that was triggering this is that
00:03:01
40 of americans were working remotely mainly from home and 70 percent of people who could work from home because
00:03:09
of the nature of their work were in fact working from home so we were running this big experiment
00:03:15
and the results are going to matter for a long time it turned out that i figured that you
00:03:21
know we'd probably be starting back to the office but you'll recall you know the discussion that we'd be
00:03:26
back by labor day but they meant labor day 2020 and then it was labor day 2021 and we're still not back right so
00:03:33
the pandemic is the gift that keeps on giving for topics like this because companies the very least now have and
00:03:41
and individuals have the opportunity to think about this uh a little more because it's not going
00:03:46
to be a surprise right that we're going to have to decide particularly whether to bring people
00:03:50
back or keep them home or do something different indeed and and so what would be as as you look back at the
00:03:57
book now you know a few months after writing it and of course it was published fairly recently um what would
00:04:02
be i'm looking for and i told you so that you can offer as well as a uh something that that surprised you uh
00:04:09
that you might have you know said or written differently well i think the big aha in the from the
00:04:17
book which was just an observation is that working from home during a pandemic doesn't tell you much about what it
00:04:27
would be like to work from home after a pandemic and you know i didn't really realize how
00:04:33
many studies had been done about remote work before the pandemic and so that was a that was sort of a bit
00:04:42
of an aha i guess the thing that has surprised me in terms of developments is partly to see
00:04:49
employers so all over the place i mean most are doing frankly what employers typically do
00:04:55
which is perfectly sensible and that is to wait and see what everybody else does
00:05:00
but the problem is you can't keep doing that i mean to not decide is deciding here right if you keep
00:05:07
everybody at home you're sort of deciding i think the the one development which is the
00:05:13
weirdest i think is this discovery that um the silicon valley companies in particular
00:05:21
are trying to make people pay to work from home right they're going to cut your pay
00:05:26
if you work remotely that was a surprise and that wasn't the initial announcement right that kind of
00:05:33
sneaked in on people a little later and that's a quirky one and that's what's kind of novel i didn't anticipate
00:05:38
that was going to happen absolutely yeah and so there's just so much we can say i
00:05:43
have a whole ton of questions for you but love to get some questions from the the folks uh listening in on the
00:05:48
conversation i think so many people have different perspectives on their own experience and getting back to work and
00:05:54
their experience about getting others to come on back so so please enter your questions through whatever platform
00:06:00
you're on uh but i i got a bunch more for peter over here so superior as we as
00:06:06
we go from from the book itself they said that some of the surprises that you're just referring to you know as
00:06:12
we're now moving forward um so like what what are you what's top of mind for you these
00:06:18
days i think uh you know the issue that everyone is talking about now is this issue of uh
00:06:29
what's the current state of the labor market which is kind of related to work from
00:06:33
home but kind of not and this is another one of these stories which turns out not to
00:06:40
be quite true this is the great resignation story right and if you actually look at the data
00:06:46
the average turnover in the u.s right now the last month uh which available i think it's i think
00:06:53
is actually still august data is 2.9 of the current employees have turned over in that month over
00:07:01
you know across the economy which they said you know the claim is it's the biggest number ever that's not
00:07:07
true uh it is the biggest number since they collected that set of data which goes
00:07:11
back 20 years so it's the biggest number in 20 years but if you looked before the pandemic
00:07:18
the number was 2.6 percent so we've gone from 2.6 to 2.9 is that a huge increase
00:07:26
i don't think so i mean what drives quitting typically is people quit to take jobs elsewhere so another kind of
00:07:33
myth is that the people who are quitting are going home to practice yoga there's no evidence for
00:07:39
that i mean the typical quitter immediately moves to another job and there's every reason to think that's
00:07:44
what's going on now the surprising thing is if you look at data and some of this
00:07:50
data comes from the folks that indeed who did some surveys of these folks if you look at unemployed people
00:07:57
unemployed people say who are not looking actively say one reason is fear of covid but the biggest reason is
00:08:04
actually that they think better jobs are coming and that's partly because of all the
00:08:09
noise and the press about oh my god wages are going up it's people are dead scrambling for jobs etc or workers and
00:08:16
it turns out our wages going up they're not really so if you looked at the pay
00:08:20
increases or pay levels in september of this year they're down about a tenth of a percent from last year at
00:08:28
this time right so wages at least real wages i should say so relative to inflation they're not going up they're
00:08:35
actually falling behind so that's probably not true either really surprising thing to me though is
00:08:41
if you look at people who sort of have jobs already which account for most of the people who take new jobs
00:08:47
they're not searching very much so a lot of people are sitting on their hands
00:08:51
waiting maybe they're waiting for covid to tail off maybe they're waiting to see what
00:08:56
employers are going to offer particularly on work from home which a lot of people care about because most
00:09:02
employers are not saying yet so we might be stuck in a little you know equilibrium here where
00:09:08
everybody's waiting to see what everybody else is going to do and nobody's doing anything and what's your
00:09:13
sense that really all of this is speculative and you're bringing about as much data
00:09:18
experience inside as anyone but what's your sense until we reach either a new
00:09:22
equilibrium or perhaps the old equilibrium in terms of of people going in and out of the drop market
00:09:29
well i think um i think the employers are kind of losing patience with a lot of a work from home
00:09:36
enthusiasm so if you look at survey data now on what employers or rather what executives
00:09:42
say versus what regular employees say regular employees are still really interested in some
00:09:48
opportunities to work more remotely executives are less interested in that and are more interested in getting
00:09:57
people back into the office and and getting going so you know my sense is on the labor market thing
00:10:04
this is going to write itself i think reasonably quickly what happened the whole problem
00:10:09
was caused by the fact that most employers waited until the last minute to try to backfill all the positions
00:10:18
that they had emptied out because of the downturn associated with kovitt but you
00:10:22
could see the need coming right because you could tell when the restrictions were going to
00:10:27
be lifted it wasn't a surprise and yet for the most part most employers waited
00:10:32
until the restrictions were lifted so they're all trying to hire at once and
00:10:36
they're all trying to hire the same people particularly low-wage hourly sorts of relatively unskilled
00:10:42
folks that's the big thing and it's the reason why the vacancy level is so high
00:10:48
people are coming back into the job market it's just they're not coming back at the
00:10:53
pace at which all these new jobs flooded in all at once very interesting what about the
00:10:59
differential impact on different kinds of subgroups whether it's male versus
00:11:04
female young versus old blue versus white collar do you see any interesting patterns there
00:11:09
well there's some issues if you're an employer you should think about and you
00:11:12
know the big one is disparate impact as we say in employment law so you know if you think about okay we're going to
00:11:18
offer remote for remote work opportunities for people but you got to raise your hand and do it
00:11:24
and the first thing that does is it creates two tiers right you got one group of
00:11:29
people in the office hanging out with the bosses you got another one who's working remotely
00:11:34
one of the things we know from prior research the people working remotely don't do as well they don't get promoted
00:11:39
as often as quickly their careers suffer it's not a big surprise right if you're closer to the power you're
00:11:47
probably going to do better the people who are probably going to raise their hand more often
00:11:53
to work remotely are people with caregiving responsibilities and they tend to be
00:11:58
disproportionately women so you're going to set up this program for a group that's going to be disproportionately
00:12:04
women they're going to have worse labor market outcomes this really looks like disparate impact
00:12:10
if you're a plaintiff lawyer if you're an employer you better think about
00:12:15
you know how you're going to deal with these challenges because they're probably going to come
00:12:19
and we're seeing uh just again as you've said now a couple of times uh companies are unwilling to or unable
00:12:28
to kind of nail down a specific in fact i'm thinking of amazon where you know in the book you actually
00:12:34
took a you know said amazon's taking will take a fairly strong stand but then
00:12:38
just a couple of weeks ago andy jassy said you know each group can figure out on on its own
00:12:43
uh is that kind of exceptional rule uh i think i think if you're an employer there are
00:12:50
some real risks to telling every group just do whatever you want we kind of had that before
00:12:55
um you know there was a lot more work from home than we might want to admit a lot of it was under the table
00:13:02
you know people had deals with their supervisors to cut out early on friday it never showed up on any records and
00:13:07
things you know but the problem with that was this real inequality you know if i'm working for you
00:13:13
you'll let me do it i'm doing the same job working for somebody else they won't
00:13:17
let me do it so i think that's probably not the path to go down one thing employers ought to
00:13:22
really do is be clear these are our policies and procedures i think for sure employers are all over
00:13:29
the place right the tech companies particularly silicon valley companies were saying go away you know
00:13:35
and it's amazing for a company like google to say that which had turned being into the office into kind of a
00:13:41
fetish right we want you here all the time and here are all these goodies that will pull you in and keep you here and
00:13:47
now it's you know kind of go away then in new york you got the banks in new york saying forget it you're all coming
00:13:53
back right so most companies i think are trying to figure out frankly what everybody else is doing
00:13:59
nobody wants to be the one that's the outlier in your industry and some of that is because you may feel
00:14:05
in the job market you'll be out of luck people want to work remotely you say no
00:14:10
but your competitors around you say sure and then you start bleeding people right
00:14:15
right so it's not crazy to wait the problem is the longer everybody waits the longer it takes this job market to
00:14:22
sort of sort itself out and get more people into new jobs are changing their existing jobs very interesting well we
00:14:28
got questions flooding in over here let me uh fire away here it's the first one
00:14:32
coming from robert on linkedin how do you see the onboarding process in working from home times how will
00:14:40
onboarding uh change yeah well if you're hiring people remotely and a lot of places are you may
00:14:46
have this pete i do too we hired faculty i had not met you know i mean they're colleagues it's
00:14:53
been a year i still have not met some of these folks right uh it's got to be
00:14:57
really difficult to come into an organization and try to find your way around when you're working
00:15:02
from home for those of us who've been in our organizations for a long time this
00:15:07
is easy it's a piece of cake you know everybody already you know how things work but if you're coming in for the
00:15:12
first time you have nobody to ask what's going on if you want information you got
00:15:16
to schedule a zoom call with people and they're irritated by that so if we're going to continue to do it and
00:15:23
have people come in remotely we really have to do a much better job everything has to be
00:15:29
explained to people in the onboarding process right we got to do a lot to get them to make connections through some
00:15:36
sort of visual you know virtual contact if we're not going to bring him in i think we ought to think also about
00:15:43
onboarding our current employees when they come back to the office assuming we bring them back they've been away for a
00:15:48
year and a half and this is a good opportunity to change the way things work because some of the
00:15:53
old habits might actually be broken if you didn't like the way things work before you know
00:15:58
this is a time to try to change them people are already shaken up a little bit and you actually touch on that in
00:16:02
the book about what happened right here at the university of pennsylvania and so i just without putting pen on the
00:16:09
spot how do you think those programs have gone uh it sounds like they've gone pretty
00:16:15
well the those programs that he's talking about were ones where parts of the university
00:16:20
uh decided for the staff in particular to make the return something more of a welcoming event i think knowing in part
00:16:28
that some people are nervous coming back for health reasons you know is it still
00:16:32
infectious in our workplace trying to chill them out on that but some of them you know have been away for a while and
00:16:39
you know they don't want to be back maybe uh and most of us i think want to reconnect with
00:16:46
other people so can we put that front and center can we make this a good experience coming back right
00:16:53
and also an opportunity for people to learn some different ways of interaction while they're in this mode of boy this
00:17:01
seems new right so that's what some of our colleagues here have been doing across parts of the university and you
00:17:07
know it seems a really smart sensible thing to do it doesn't take much time it
00:17:10
doesn't cost much money so why not very interesting here's a great question
00:17:16
from elliot from linkedin is it reasonable to assume that there'll be a boomerang effect uh when a work from
00:17:22
home goes out of vogue in in the short term think things will swing the other way
00:17:28
well if we mean boomerang by uh there's two ways that could boomerang right one is that employees who are
00:17:34
working remotely will say hey you know i really want to come back to the office there might be some of that but what we
00:17:40
know from other work from home events before this is that people get people who go remote are self-selecting
00:17:49
to do it they kind of know what they're getting into they kind of know after
00:17:52
this point what it's like they're not so likely to say you know i really missed
00:17:57
as one of my colleagues who left here said i really miss the chinese food truck on 37th street you know they
00:18:04
probably not going to happen a lot are there employers who will back up i think absolutely and i think this is one
00:18:10
thing to worry about on the employer side how are you making this decision right are you deciding to bring people
00:18:17
back because you really think it's going to be better or is it simply because you
00:18:21
don't trust that your employees will be able to continue to work productly unless you're
00:18:26
watching them right and that would be a really bad outcome having trusted them for a year
00:18:32
most employers report people really did pitch in and get things done and to now to tell them nah you know
00:18:38
we don't trust you come on back i think the one thing that employees seem to
00:18:42
appreciate the most during the work from home period is having more control themselves over
00:18:49
their time and having more trust from their employer and if you try to roll that
00:18:54
back now it's probably not going to get a good reaction from more harm than good uh
00:18:59
let's keep the questions coming sammy on linkedin as uh points out that uh that
00:19:04
they uh recently left go of of their office in new york now renting spaces on an unneeded basis for strategy sessions
00:19:12
and brainstorming so what do you feel about the future of work spaces uh are we already seeing some changes uh how do
00:19:18
you see that continuing to evolve well you know this comes to the very interesting question that not a lot of
00:19:24
employers have completely thought through and that is what's in it for us if we
00:19:29
change the way we work permanent remote work is pretty straightforward you know we're going to
00:19:33
take back your office and cut our real estate footprint and we're going to save
00:19:37
money instantly and we're going to save a lot of money if you don't do that
00:19:42
and if you say we're going to have some sort of in-between arrangement could you cut your office space anyway
00:19:49
that's kind of the bet the problem is we tried that that was the hoteling movement
00:19:54
in the dot com period it started then and it didn't work i mean frankly by 2005 or so there are a bunch of stories
00:20:03
in the media saying whatever happened to hoteling because it had been pulled back
00:20:07
in most places the problem with hoteling which means you don't get a permanent
00:20:11
office when you need to come in we just get you a space you know the problem with that is most people who come back
00:20:17
to the office do it because they want to meet their peers and colleagues and with a rental room it's not clear
00:20:24
you're going to meet them you know you get a office any place in the complex
00:20:28
where it might be vacant or a special temp office area we've got we also know
00:20:34
that people like the idea of having their own space and being able for some people to decorate it or make it feel
00:20:40
more like them you know and so there was a lot of pushback by the employees in silicon valley particular and it kind
00:20:48
of folded right so if you think it's going to work for you the question to ask yourself is
00:20:54
why do you think you're different i mean what is it about your approach where you
00:20:58
think it's going to work because we ran this experiment before it didn't work
00:21:01
for most people why do you think it's going to work for you and i do want to say that that's
00:21:06
this just a really fascinating aspect of the book and for for anyone listening uh
00:21:12
instead of just saying it's all new it's all different we can't learn from the past i think uh peter
00:21:18
you've done a really great job of pulling together synthesizing a lot of that that uh literature and just
00:21:24
experience to really give us some foundations to to better understand where we're going so i'm sure
00:21:30
as a scholar it just felt very rewarding to see some of that uh all the research
00:21:35
just all of a sudden come to light in a really dramatic way well and i think also as
00:21:41
you would well know to be able to see that there actually was research you didn't have to make stuff up right
00:21:46
now we actually have answers to these questions right so and we also have a lot of questions about talent management
00:21:52
and so on gene is asking a question about your recommendations for how employers can maximize retention and
00:21:59
attract the right kind of talent you know beyond all the logistics of time and space and all that how do we bring
00:22:05
in and hold on to the right people well retention is the harder thing because you know the big aha around
00:22:11
retention is that social relationships hold people in organizations and with remote work we're breaking a
00:22:16
lot of those social relationships so we're gonna have to deal with that somehow figure out how to retain people
00:22:24
because the main way that we've done it hasn't worked is unlikely to work very
00:22:28
well one of the things we did learn during the pandemic work from home period is a
00:22:33
quirky statistic from some surveys that employees reported that their relationship with their supervisor
00:22:39
actually got better if you're really cynical you might say well i don't see my supervisor i like
00:22:44
her much better now but i think there was some purposeful action on the part of some
00:22:50
employers to make the supervisors get in touch with the remote subordinates every
00:22:56
week and in the office we don't do that very often partly i guess because we think
00:23:01
you see me all the time why should you why should we have a sit down and talk so we could probably do a much better
00:23:08
job of this if we get people back in the office but even remotely than we have probably done in the past
00:23:14
on the retention side it's a bit of a trick on the hiring side you know one of the
00:23:19
things you hear from the tech companies in particular is that they think this is
00:23:23
going to be a boom for them because they can now hire people anywhere because they can say you don't
00:23:30
have to relocate you can work for us wherever you are including by the way outside the us we don't have to worry
00:23:35
about getting you a visa because as long as you don't work in the u.s you don't need a visa but you could
00:23:40
be our employee someplace else which is probably true i guess the question they maybe not
00:23:46
thought enough about is other employers could do that to your employees as well right so you know your
00:23:52
retention problem is going to be really bigger if we go down that path the other thing i guess if i'm the
00:23:58
employee is to say to worry a little bit what happens if they just want to turn me
00:24:04
into a contractor which is quite likely to happen somebody in the finance area will say
00:24:09
well why is peter an employee anyway you're paying these payroll taxes and stuff for him and you know he's not here
00:24:14
you don't see him you're managing him remotely why don't you just make him a
00:24:17
contractor we like that better for accounting reasons it shows up looking better on our books let's do
00:24:23
that right so we've already seen some controversy and legislation arising uh
00:24:29
even pre-pandemic about you know uber drivers and so on do you think we're going to see more changes along those
00:24:35
lines well my guess is that we will may see more legislation and it varies protecting contractors broadly defined
00:24:45
making it more difficult to turn people into contractors broadly defined right or at least enforcing the existing laws
00:24:53
more than we have democratic administration that tends to happen anyway so we'll see
00:24:58
where they go in the future it depends who's in the white house whether they
00:25:02
take that seriously or not got one more question for you as we're running short on time uh you know we're
00:25:08
talking before about the the differential impact on different groups of employees
00:25:15
diana's asking about gen z so uh first i'd like to ask you do you think that there are differential
00:25:22
impacts or for new employees and and secondly what advice would you offer for uh for young employees to be entering
00:25:29
the workforce and with all of this uncertainty and change well you know the first thing i feel compelled to say
00:25:35
because i just got out of a phd seminar we're talking exactly about this is you
00:25:39
know the national academy of sciences this last summer summer 2020 published a report debunking
00:25:46
the whole idea of these generational differences that they don't exist right
00:25:50
but you want to be really careful about working remotely because you don't know
00:25:54
an awful lot about how things work maybe generally but especially in the organization you're going into and you'd
00:26:01
like to have the most opportunities possible to learn stuff so i would really make a
00:26:07
big push to be in the office if at all possible because this is a huge investment in
00:26:12
your career at that point and if you miss it first of all if you're not in the office
00:26:18
it's easy to be the last one hired the first one let go people don't know who you are they have
00:26:24
connections to you and secondly there's all kinds of things you learn about how
00:26:27
the world works and business works or your organization works that you just can't pick up remotely so i would say if
00:26:34
you're a young person coming into the labor market go to the office that's
00:26:38
great i'm going to try to squeeze one more in for you a question from from david uh real quick uh put you on the
00:26:45
spot a little bit can you point out an organization that that's navigated this
00:26:49
whole thing particularly well well i think there are different ones that have navigated it differently by
00:26:56
different approaches so in the book i talk a little about clorox as a company that has thought about the on
00:27:02
re-onboarding very purposefully and that you know that's that's good uh i think
00:27:09
in terms of organizations that have decided to come back bring people back i think comcast has been good at the way
00:27:16
they've done it they've now given a date they said you know we're going to bring
00:27:19
people back we're going to work through the problems i think any company that communicated
00:27:24
well along the way and communicated the uncertainty as well to be able to say look we don't know you know we got to
00:27:31
see what the state does what the city does with its regulations how the virus plays out what's happening with the
00:27:37
delta variant you know organizations that are willing to be transparent that goes an enormously long way i don't
00:27:45
think your employees will fault you for not telling them what's going to happen
00:27:49
if you tell them why you don't know but if you keep it a secret and don't talk
00:27:53
to them they're going to assume there's a conspiracy going on and that actually all your jobs are going to
00:27:59
china or something like that so you get a bad outcome if you're not letting them
00:28:02
know even what you don't know good advice good advice so we have so many questions but we don't have time for
00:28:08
them so i do want to thank everyone for uh not only tuning in but for for taking
00:28:12
the time for being so engaged and such an important topic and with that in mind if
00:28:18
participants haven't done so already future of office right here available in
00:28:22
the wharton school press bookstore wherever books are sold and actually if you go to the wharton school press
00:28:28
bookstore 40 off discount on the future of office ebook so the promo code is meet peter uh
00:28:37
yeah meet peter capelli all one word uh but love you all to stay updated um with our
00:28:43
meet the authors series peter it's so wonderful to have you as part of it again i can't think of a more timely
00:28:49
topic or a more suitable expert to talk about it so thanks so much for taking the time great thank you
00:28:55
and again thank all of you for taking the time as well this is pete fader signing off from the
00:29:01
wharton school at the university of pennsylvania [Music] [Music] you