Today, we’re kicking off our second season with an extra-long episode featuring Professor Nick Bloom of Stanford University.
Nick has been researching work from home for over 20 years. He was heavily involved with policy, including meeting President Obama and speaking at the White House 2014 Working Families Summit.
Nick isn’t just collecting and analyzing data on tens of thousands of employees, he also consults with 100s of CEOs and managers. His work has been covered extensively by the New York Times, Wall Street Journal, CNN, BBC, Financial Times, and the Economist.
He was called the “Prophet of remote work” by Fortune Magazine, “America’s best work-from-home expert” by Business Insider, elected to the Bloomberg 50, and one of our 55 Top Remote Thought Leaders.
Today, we talk about why the media is often wrong about remote and hybrid remote work, what people want from work, why the office as we knew it is never coming back, and what the opportunities are for employees globally now that work is becoming more remote, including:
- Media versus data. The media is incentivized to paint remote work negatively. Nick’s panel data and another source like Kastle, which measures actual swipe-ins into the office, are flat in 2023; people are not returning more than before. Data over anecdotes, as Nick says.
- Remote = positive. Nick’s research shows no real negative impact on productivity. As he says, offering remote working days is a huge benefit for employees who value it about the same as an 8% pay increase.
- Intentional office days. Don’t let people return to the office to be on Zoom calls. As Nick said, focus on one-on-ones, mentoring, group meetings, problem-solving, training, presentations, etcetera. People come back to the office to meet other people.
- Offices won’t disappear. There will be roles that always remain on site, and therefore offices will not disappear. But they will have to be good enough to want to spend time in, which means bad news for ugly, old offices and office buildings.
- Global employees’ opportunities. If we can make jobs remote, people in Southeast Asia can take much better-paying jobs while working where they live. This is an amazing opportunity for our region.
- Outcomes, not keystrokes. Nick calls this the Marissa Meyer point, referring to when she took over Yahoo when it was a fully remote-first company. We need a better framework for measuring and evaluating good work to successfully manage hybrid and remote teams. And to be clear, this is not surveillance, it's not watching keystrokes.
I hope the insights from this interview serve as a reminder or even a wake-up call to follow the data and focus on giving people more flexibility to mold work to their lives rather than vice versa.
Start with people, then design work schedules, work days, and offices around them.
Future Work is the bi-weekly podcast from Daan van Rossum, CEO of FlexOS – the platform that helps hybrid and remote managers level up their leadership game. Find all episodes on our website, Youtube, Spotify, Apple Podcasts and all other podcasting platforms.
Daan: Nick, you started researching and advocating for work-from-home over 20 years ago at McKinsey, tell us about that journey. How did you discover and stick with this topic? You must have been the only one talking about work from home for quite a while, and did you ever want to stop?
Nick Bloom: It was a weird journey. There are two different genesis. One was when I was at McKinsey. I started doing work on management practices, left McKinsey, and went to academia, first at the London School of Economics and then at Stanford.
There's a lot of work I manage, including performance management systems and monitoring evaluations. But there's another component of it, which is being nice to people, which I think of as like flex time, maternity leave, job sharing, and work from home, which I was particularly interested in because, as one of four kids, when I grew up, both my mom and dad worked full time. They used to try to work from home during the school holidays. My dad was in the NHS as a doctor. My mom worked for the UK government. They're reasonably well paid, but it's also a super high-end job.
In the eighties, there were no computers. It was shuffling pieces of paper. I remember my parents having to bring their stuff home. And I just kind of got into it over time, and I was doing a bit of work.
The other thing that was a bit of a spur was the event with Marissa Mayer in 2013. There's a huge amount of policy and media interest around that. Also, I was very fortunate to have a student at Stanford, James Liang, who was the co-founding CEO and, by that point, chairman of Ctrip, a massive global travel agent. They wanted to downsize their Shanghai headquarters, thinking of sending the call center workers to work from home, or at least what I would not think of as hybrid, a few days a week. They did a big randomized controlled trial that I got involved in.
To be honest, there was no big general plan. It was all academia that led me to start working on it 20 years ago.
Daan: Your interest in this topic has been longstanding. Maybe by chance, you met the Ctrip chairman and wrote this famous report on their experiment of sending some workers to work from home and others to the office. You realized then that working remotely is completely possible. But that was before the pandemic and before other corporations started exploring.
How have the last two years been? As someone who has studied this for so long, do you feel you've been waiting forever for people to realize working from home is okay?
Nick Bloom: To explain, from 2010 to 2012, we ran this large, randomized controlled trial of around 500 people in Shanghai in Ctrip's call center. We randomly assigned volunteers based on odd birthdays. If your birthdate is even, you work from home four days a week; if it is odd, you must work full-time.
The reason the firm did it back then was that not only could we save a lot of space, but work-from-home employees could goof off. Their question was, “How much were they goofing off? Were they work a lot less?” In which case it's a bad idea or maybe not much less.
We ran the experiment and crunched the numbers, and what we find is that work-from-home employees were 13% more, which is a massive increase. Everyone was surprised! We double checked it when we went to the interview; it made sense because it turned out they said, "Look, going to the office and back is really time-consuming, and I am working, so I'm often late. It takes longer to have lunch, and it takes longer to have a toilet break. I can’t concentrate…”
But having said that, I wrote it for 2015, 2018, and 2019. I was surprised there wasn't more take-up. Then another view is, “Look, we've done one firm experiment. Maybe there's something unusual about Shanghai in 2010—something about the firm.”
When the pandemic struck, it was probably more optimistic that most of them would work from home, but definitely wasn't. Even I was amazed at how well it's worked out.
The bottom line from the pandemic, as we've gone in America, is that we've saved from 5% of days and worked from home to almost 30%, a six-fold increase, and it doesn't look like it's going back. This is a permanent change. Every business person, manager, and policymaker says, “Well, look, it's not clear that fully remote is what you want. You may want hybrids, but certainly we're not going back to five days a week for professionals in management.”
Daan: Fascinating! As you said, this is about being nice to people, and I believe in flexible work models because they provide individuals more autonomy at work, agency, and the flexibility to shape their work around their life and aspirations. The wider acceptance of work-from-home is positive because it seems more employee-centric in the organizations we're looking at.
Whereas hybrid and remote stands today? What are some of the key findings from the research you've been doing recently?
Nick Bloom: I would say to allocate your employees into three groups.
The first group is those who have to come in every day. From Europe and the US; that's about 60% of the entire labor force. At Stanford University, for example, the people that do cleaning, security, food service, and transport have to come in every day. This is not an activity you can do remotely. That's group one. There's really not much choice about it.
Group two is made up of a lot of professionals and managers who are settling into hybrids. Monday and Friday, you work from home; it's more like reading, writing, and analyzing in one-on-one meetings. Tuesday, Wednesday, and Thursday in the office; it’s more lively. It is more mentoring, more group meetings, problem solving, training, presentations, etc.
That seems to work pretty well. The evidence on that is that it's about net zero in employee productivity. You can think of arguments in both directions. I've looked at all the data. It has about zero effect overall. The huge benefit is that employees like it. They value it about the same as an 8% pay increase.
Read: the FlexOS guide to 100+ Remote Work Statistics
If you're a firm, and there are hundreds of firms, there's no reason not to, and there's a good reason, which is that it reduces quit rates and makes it easy to hire. So if I think of Stanford faculty, a lot of the administrators are managers; they're all hybrids.
The third group is fully remote. I'm not going to the most mixed group, but mostly by headcount, that's about 10%. So, fully in-person is 60%, hybrid is about 30, and fully remote is about 10. Fully remote, most of that 10% around the world is a lot of folks in data processing, call centers, HR, benefits, and payroll; a few are more high-end IT coders, journalists, copywriters, authors, etc.
At Stanford, we have about a thousand fully remote employees. They've been great, but they tend to do things like IT support. And if it gets really complicated or needs a hardware fix, they'll hand it over to somebody local, and the motivation for going fully remote is that it's dramatically cheaper for the university. So, for an hour of fully remote time, you're not paying for any space that saves 10%–20% straight off. You can have these folks globally.
So, the last person I asked where they were said they were in the Philippines. So, as you can imagine, you can get an amazingly highly talented person in the Philippines for probably two-thirds of what you get in the U.S., and you get a better employee.
Those three all make sense, and they all fit slightly differently. Most large firms have all three of those types in their company.
Daan: Whether you're a remote, hybrid, or in-office company, most companies will have to embrace all of these different models for different groups of people.
I have to point out one thing about what you said: "an 8% pay increase?”
Nick Bloom: Where does that number come from? We have now surveyed 38 countries. We asked across those countries and the US, maybe 200,000 people, and we got pretty accurate numbers. There was an interesting research paper in 2017 on this, and they found a very similar number.
Another way to look at it is that I did a randomized controlled trial a year and a half ago where we randomized people into hybrid in China or fully in-person. When they were randomized into hybrid, their quick rate went down by 33%. People really like it.
You may think an 8% pay increase is a lot. If I flipped it around, I could say what happens when you go hybrid. Let's say you can work from home 2-3 days a week. First off, you avoid a 4 to 6 hour commute vs. 3 to 4 hours a week. We know from survey data that there are these happiness surveys going back decades. Even Daanny Kahneman, who's a Nobel Prize winner, has done some of these, and they're amazing.
What do you discover is the second most unpopular thing in the day when you ask people? It is work! People don't like working that much. That's why you pay them a lot of money to do it. The most unpopular thing, even more detested by them, is commuting.
First strike: you get rid of the worst activity on people's days. Plus, you save a lot of money, and now they can also live further away. They get rid of that stress and hassle.
It's funny. You should think about yourself. I had a job; one paid 8% less, but I only had to go in 2 days a week, and the other one paid the base, but you had to go 5 days, which do you take? If you only have to go for 2 days, you can live further away from your home office, have more space, a better neighborhood, and have more free time.
This is why, in the data we see, that's about the average number.
Daan: It makes so much sense. A lot of models out there and that's what we currently see.
Where do you think it's heading in the future? What kind of models will you see grow in size and which models will we see decrease? Will we eventually all work from home completely? Will we somehow still go back to the office? What do you think is the model that's going to be most popular?
Nick Bloom: In three years, I think we'll be looking at the Nike Swoosh. In the sense that if you go back a year or two, you see that work-from-home levels are falling. In Europe and the U.S., work-from-home levels have almost stopped falling now.
Running next year and certainly the year after 25 or 26, I think they'll be rising again. Why is that?
There are two huge long-term factors that are pushing out work from home.
Number one is "technology." We have data going back to the sixties on levels of work from home, and it was pitiful; it was 0.5% percent of days back in the sixties. In the nineties, personal computers came along, making it easier to work from home. Then you have laptops, you have the internet, and around 2010–15, the cloud starts to come in. Skype is a bit earlier. Zoom calls, etc.
What's happened is that technology is getting better, making it ever more effective to work remotely. That's still continuing. So, fact one is that technology is ever-pushing work from home.
Fact two: the growth of new firms what we see in the data very clearly is that young, new firms tend to be much more remote. The latest generation of folks coming out of college wants a university of entry into the labor market. They want at least one or two days a week to be remote. They mostly want three days in the office. They don't want to be fully in the office. Those companies and people, as they mature, are going to be tomorrow's medium and bigger companies, tomorrow's CEOs and managers. Both of those forces are pushing up. So I think it's pretty clear that there's a flat line in the U.S. The next change of direction is to head up.
In terms of when things will take off, I think they are slowly withering away. So, I saw a great piece in the USA earlier in the week that I liked a lot, talking about some jobs you never guessed could be pretty remote.
One of them is when you drive through a fast-food restaurant. In America, you shout into this loudspeaker to give your order, and then you drive up the window, and there's someone there who hands you a hamburger and fries, whatever it is.
Turns out I didn't realize that many of the people taking that order are remote workers because you don't need the person who's listening to the order to actually be in the restaurant. Why would you? They can be anywhere. It turns out it's much more efficient to have 40 restaurants served by pool folks; whenever there's someone at the loudspeaker, you're there.
Fully in-person is slowly going to slide back.
Hybrid, I think, will grow as more and more jobs are discovered. There's a nice mix between in-person and from home.
Fully remote is a tricky one to think about. I think in the U.S., that may shrink partly because of offshoring. When I talk to American and European companies, they say, Look, if I can have some do remote IT, why would I have that in the U.S. I can do that in Argentina, Nigeria, or the Philippines, wherever it is.
The other big driver is AI. If you think of automation computers, software is way ahead of hardware.
It always tries to replicate you. I could probably replicate your voice and maybe fool someone for a little bit. I could never physically replicate you. There's nothing even close to it. The robots that look like humans are vast, clunky, hulking machines.
Anything that's going to be automated is going to be fully remote work where you don't need a physical presence. So if you think of call centers, think of data entry. I think the future is a lot of hybrid. In Europe and the U.S., a big chunk of work is done in-person, not much fully remote and probably in Asia, South America, and Africa, where wage rates are still a bit lower, fully remote will live on.
But it's really AI that's going to be baffling. If I were working in a call center, the next 5 years would be safe. 15 years from now, I think I will be replaced by AI.
Daan: Such an interesting thought about how we measure remote work. You could measure it by how many roles in a company are remote. That may stay very consistent. But if you ask people in the U.S., what is your role? Maybe the number of remote roles will decline. Because if it's a remote anyway, why not bring it to our part of the world here in Asia, where you can probably get those very similar skills for a much lower price?
Reversely, that's a great opportunity for our region to suddenly move from; you have to find a job here and you have to take a paycheck here if you can market yourself well, and if you can be on a platform and you can find an employer in the U.S. or find an employer in Europe and get a job there, it's obviously such a huge opportunity for people here as well.
Hopefully, it's a win-win for everyone.
You talked about younger companies. If a young founder comes out of university right now, it's quite unlikely, unless you're Sam Altman, to say everyone has to be in the office 5–6 days a week, whereas maybe in older companies there's still some sort of nostalgia towards the time that we were in office.
We also recently did some research where we asked hybrid and remote managers, Are you seeing some of the problems that we keep hearing about in the media, challenges around productivity, creativity, innovation, and teamwork? And the answer was flat out, no! Only 2% of managers across all age ranges said that they experienced these challenges.
What is that big gap between what we hear and what we read in the media about companies saying you have to go back to work and the actual people managing hybrid and remote teams?
Nick Bloom: Right. We survey 10,000 people every month in the U.S. and about 50,000 globally. What you see is this hump-shaped desire to work from hope. So we take people from their 20s to their 65s; 20-somethings don’t want to work from home. They typically want to work from home for about a day and a half. They're going to come in three and a half days a week because they want to get mentored. They want to socialize, and in fact, their homes are normally small, crowded apartments. They're staying with their flatmates, which is not that appealing.
If you look at people over 50, they also tend to want to come in. They're kind of used to coming in. They're empty-nesters. Their kids are out of the house. The group in the labor force that's most keen on work from home is 30 to 40 because they tend to have younger kids.
Even if they want to work from home, maybe they are looking at one and a half days a week in their 20s and 50s and more like two and a half days a week in their 30s and 40s.
The other thing is that people ask, Well, look, how does that statement square up with Elon Musk's, Jamie Diamond's, and David Solomon's?" Well, I think we're talking about elite CEOs that are running massive companies, and they are a tiny fraction of the population, but they're a very particular fraction of the population because they're the fraction of the population that happily works 100 hours a week.
These are people whose life is work and who are totally focused on work. There's the story about Elon Musk working 130 hours a week. So if you love work and want to work every minute, then you can't keep yourself away from work. It's not that surprising. You want to be in the office five days a week, but they are not representative. We know from large surveys of hundreds of thousands of people that the typical 50-year-old is not like Elon Musk or David Solomon. They are typical 50-year-olds who want to go and work from home for a day and a half a week.
That's where the other disconnect is. As such, CEOs are very selected. The reason they're there is because they love work. They're not, surprisingly, particularly happy to work from home for a day or two.
Daan: Even though that's a very small group of CEOs, it still seems that the media loves to pick up on these stories. We just had Zoom a couple of days ago. Every single time one company says you have to work in the office again, that becomes a big headline. That's then always the proof that remote and hybrid work doesn't work. We have to go back to the office, and it does seem to be a narrative that keeps perpetuating.
Nick Bloom: Totally right! It's why data beats anecdotes. I'll give you the phases I've seen.
Phase one, I can remember well because I was doing a lot of media then as well, which was back in May, June, and July 2020. You can cast your mind back. That seems like more than three years ago. Back then, what was revolutionary was Facebook.
Mark Zuckerberg stood up and said that Facebook is thinking that this work-from-home thing may stick around for maybe a day or two a week. Everyone said, Wow, the media made it. So the media back in May, June, and July 2020 was full of stories of how the whole world was going to be fully remote. Looking at the market, you could already see that by June and July, companies were starting to call people back in because the very worst of the pandemic was starting to pass.
In reverse now, everyone's fed up with their stories. What they love is a contrarian story about X hauling people back into the office. I know from having looked at the data in the US that our monthly population is 10,000 a month, while the census has 40,000 a month. So I swipe data where you can see people swiping it in and out.
All three of those datasets are completely flat for 2023. What does that tell you? It tells you the media is picking up on what's more interesting. Honestly, if I were a journalist and my career and progress depended on clicks, comments, and forwards of my article, I'd probably do the same.
I totally get why the journalists are doing it. They care about their careers as much as everyone else does. And if you want to change that, we as the general public have to start frantically clicking on articles that say X is returning to the office, find the occasional one that says X decided to work from home, and click into it over 20 times. And maybe you change the narrative.
Daan: Super interesting: data over anecdotes; I couldn't agree more. We should look at what's actually happening in the world and not follow a couple of stories.
Even though we may say that most people love working from home, at least some days per week, and even though we can now say that the data is also showing that that is the way that most companies are going, what are some of the challenges that still exist in managing a hybrid or remote company?
You do a lot of quantitative research. You look at your panel of 10,000 people, but I also know you speak to a lot of company owners. You speak to a lot of people.
What are you still hearing in terms of where it is not working quite so well yet?
Nick Bloom: One big battle I hear is what I call coordination versus choice.
On the coordination side, there are folks, and in fact, the data supports this: people say that when they come into the office, the real reason they want to come in is to work with their colleagues, and we've surveyed people. And here you see overwhelming by some huge margin. The reason people come into work is to work with and socialize with colleagues, much as the reason one comes into work is to avoid the commute. So that pushes you in favor of coordination. We work together. There's not much point even on Monday, Tuesday, or Wednesday or Thursday. In fact, in non-coordinated workplaces, I often hear employees and managers tell me, Yeah, I came in; I spent much of the day on Zoom. There is a lack of energy. I'm really frustrated. What the heck did I do?
On the other hand, there are people saying, Look, it's all about choice and flexibility. You go, let people make the choice; your prescripting, your mandating days, you're taking it away.
My take is, Look, I get that choices are important, but there's a limit. If you look at what happened pre-pandemic, we told people they basically had to come in Monday through Friday from 9 to 5. No one was allowed to work from 6 p.m. to 4 a.m. on Wednesday, Thursday, Friday, Saturday, or Sunday. Our company has a working week.
Post-pandemic, we still work the working week, but I think there needs to be coordination. It doesn't mean the whole company. So you get five teams, and in team A, those guys like Fridays because it's a quiet commute; they come in. But I think that's the biggest hot button issue I hear.
I think the forces of coordination are winning this one out. But it's a big battle. Yeah, well, it's flexed.
Daan: Yeah, I would say that's exactly where we ended up falling, even though I love the idea of people making their own choices. Because whenever we have the freedom to choose, whenever we have autonomy and agency, we do better as humans. It gives us a sense of control; it gives us a sense of empowerment, not that we're just a bunch of little children. The company has to decide for us.
At the same time, if we want people to do certain things together in person, it doesn't make much sense to say, Well, just choose your own days, because then you have certain team members coming in on, let's say, Monday, Tuesday, and others on Thursday, Friday. So for us, yeah, we chose those two in-office days, and that is really the day for the whole team to be together.
We also make sure that we use those days very intentionally, so we don't just say, Well, you have to be here on Tuesday and Thursday. We really design those days to make sure there's always something to have people connect beyond just the work to socialize, to then go through key items together, and then also give people a chance to kind of work focus.
Because, just like you said about younger people in the U.S. here in Asia, it is also pretty common that people have places to work that are not really places to work, meaning that you typically just sit on a small desk in your bedroom and there are maybe three generations of people walking around in your house. So it can be pretty noisy. So that's what we offer.
For us, the thing that we landed on, I would say, is working well, and I think the team would agree. I think the other thing that we're hearing when we're talking to our customers and when we're seeing where the traction is for what we're putting out is really around this idea that, again, managers have kind of learned how to manage hybrid and remote teams.
It's not that they're totally new to it. And again, all the things that we're reading in the media around these big issues around productivity and remote collaboration, when you ask managers themselves, according to our research from last month, they don't see the problem at all, but they do kind of feel a little bit left alone in the sense that the company is not supporting them to become better managers.
Managing now is different from managing a couple of years ago. There are some newer skills that you may need, and I think that's the big thing that we're seeing where a lot of the logistics may be taken care of by the company. But in terms of actually supporting managers to be great hybrid and remote managers, that's where there still seems to be a gap.
Nick Bloom: I love your second point as well. If I had gone on that, that would be the other key thing to make hybrid work. One is coordination. Two is a sense of purpose when you come in. You're completely having two companies, as well. They say they coordinated A and B; they made sure on the day spokespeople were written. There are lots of meetings, trainings, and events that seem like there is a reason for them. Because that's how it takes off.
One company actually set it up for two days. Those two days were packed. People felt vibrant and energized, and in the end, there was demand for a third. We moved there. It's funny; I spoke to the board of Panera Brands, and they have a huge business now. They say half of our business, which you don't need to see, is catering to companies.
They said sales are doing okay. It's really down on Monday, particularly Friday. No one's buying sandwiches on Monday and Friday, but it's way up on Tuesday, Wednesday, and Thursday now. And it's kind of like the same story: everyone works from home Monday and Friday. But they're really keen that when people come in Tuesday, Wednesday, and Thursday, they have lunch together, they connect, and they bond, so they're not just buying them lunch.
Daan: Makes a lot of sense.
On that point about the managers themselves, what do you see when you're talking to companies in terms of how they support their managers? How are they making sure that the managers have the tools and skills they need to manage these hybrid and remote teams? Is that starting to become something that companies care about and invest in, or is that still something that they leave to the people and hope it works out?
Nick Bloom: I posted on LinkedIn, and you're kind of going through that. I totally agree; again, this is critical.
Third point: I interviewed Marissa Mayer, CEO of Yahoo!, about what happened in 2013. And I kind of cut to the chase of it, but she said basically back then, I inherited this fully remote team and I had no performance management tools.
I just couldn't tell what they were doing. In the office, when you have folks working, you can watch them. It's not great. It's 4 out of 10 managers, but you can see all of them at their desks, typing away at their computers, doing something vaguely constructive.
So when they're fully remote, you have no idea. She said, Look, the thing you really need to make fully remote a success is performance evaluation tools. To be clear, this is not surveillance. It's not watching keystrokes and screenshots. Nick, have you met your sales targets? Have you produced your reports? or whatever your performance is? For me, that might be, say, teaching and research.
If you have good performance evaluation systems that can evaluate people in half day by a half day or over longer timeframes, then you're in good shape for remote work. Then you say, Nick, you can work from home Monday-Friday week out, but I'm going to evaluate you and make sure that you're meeting your objectives.
If you are, that's great. You're the boss. You're going to go play golf in the morning and make it up in the evening. That's fine. But if you're not making it, then we're going to have to reconsider that. As an employee, that's better too. The biggest upside of remote work or working from home on any given day is that I avoid the commute.
Number two, you hear, is the flexibility to do things like pick your kid up from school, maybe do some shopping in his car, go to the dentist, play a round of golf, whatever you do, and then make up for it in the evenings. And that is also very valuable. You can only do that if you're being evaluated on outputs. You can't do that if somebody is clock-watching you.
Daan: Again, to me, it goes back to that point of treating employees, our team members, as grown-ups. We're saying this is an agreement: I pay you every month, and in return, I expect some outputs, but I'm not going to micromanage you on when you come to work and how you do your work, because at the end of the day, everyone has different hours of peak productivity, and I think they're shifting too.
When I was younger, productivity was 10 p.m. until 2 a.m.; now it's 6 a.m. until 10 a.m. It's almost flipped, but you want people to do their best work when they feel like they can do it. And if they're doing that in between other things, that makes total sense. So that’s real work-life integration.
Nick Bloom: I completely agree. It's funny. On the aging side, you might have the same thing. I'm 50; 20–30 years ago, I used to work late into the night. Now, I remember being amazed when I was a kid at how my grandparents always got up so early. I don't have grandkids, but I like to get up early. I do fine. I feel fantastic. Start when I come back from the UK. I'm in America. Keep waking up in California because of the jet lag at like 4 a.m., and by 8, I'm like, Wow, I've done 4 hours. I feel great, and then, of course, by 7 p.m. I'm exhausted and pass out, but it actually works quite well.
Daan: But it speaks to the right point, which is that again, everyone has their own life going on, and we used to be forced to just show up at 9 a.m. and start to work no matter how we felt. Now that you can accommodate much more of how you're feeling and shape the work towards that, it makes total sense.
I think on that note, as people are having these days where they have micro productivity, as Microsoft calls it, where you choose pockets of time where you're working, and then maybe you do something that's more personal, how do you make sure that people can collaborate? How do you make sure that you don't have this second-class citizen problem where the people in the office have one experience and the people at home have another experience?
Some companies are now experimenting with core working hours. That's the couple of hours that you expect everyone to be online so that if someone asks a question over Slack, it gets answered. What do you see from your conversation and your research?
Nick Bloom: That is the real mix there. Hybrid workers generally have the same core hours as office workers. So I think of a standard company, Tuesday to Thursday, within the office. So for a start, those days are taking care of a lot of urgent business that gets moved to them.
Monday through Friday tend to be more relaxed. There's a bunch of evidence in science that intermittent working can be useful. As in problem solving as a group, then quietly thinking and problem solving as a group is more effective. That's one of the reasons for it.
I can certainly see a logic to core hours if you want. You want to check in with your employees, but you could easily say, Look, we're going to have 10 to 12 and 2 to 4 or something. You want to make sure that it doesn't, on the other hand, block employees because maybe you want to do something, go play tennis, or something. I have nothing against that, as long as they get their job done. So it sounds like I'm encouraging people to play tennis. You flip it around. Imagine your big antenna picking you up.
We talked earlier, before the COVID. I have a 7-year-old. It's nice to have to pick her up from school. I feel totally apt to spend 45 minutes doing that and watch 45 minutes less TV at night. That's like a choice. And I happily make that choice.
That's the kind of thing you want employees to be able to do. On the other hand, I guess you do want them to be available if you need to.
I actually spoke to David Solomon, the CEO of Goldman Sachs, a while back, and he said, Look, one of the big things about why certain roles have been getting back into the office is that they just respond much faster. The trading systems, the computer systems that support these people, trade literally billions of dollars a day. If they go down, you are losing enormous amounts of money. And if someone's in the office, they respond instantly.
So there are some roles where the response is so critical. Think of an airline pilot. I want them in the office, inside that cockpit, rather than remotely, because if something goes wrong, I want them to respond now. I don't want them to respond 20 minutes later when it's too late. There are a range of jobs and roles where response is critical. There are others that are less critical.
Daan: It makes total sense.
We have to obviously tackle the big question of offices, real estate, and office space. With all of these new models and people working from home more—we just talked about Monday and Friday—Panera doesn't have to deliver any sandwiches to the office because there's no one there. How will this impact offices?
Our companies, as we saw during the pandemic, are actually going to downsize their offices. Is everyone moving to a hotel system? Where do we sort of see the dust settling when it comes to the physical space that people used to work in?
Nick Bloom: Firstly, I think this concept of peak office is about right. We probably, at least in Europe and the US, have reached the peak of office square footage. Asia is still growing a lot. So that may be different.
Secondly, we know there's what's called the donut effect: about a million people in America have moved out of big cities into the suburbs as they are more hybrid, similar to what happens in Europe and Asia.
I've been looking at my MasterCard. You look at what people are spending on my credit cards, and they have shifted out to the suburbs. So huge cities and their offices are much emptier than they used to be. The nice ones are not doing so badly because if you're Goliath National Bank or whatever huge company you want folks in for hybrid, you want them in somewhere nice.
Well, it's all been done very well. It's kind of nasty old-fashioned offices; some of that stuff's being converted to residential, which is good. I don't think it's apocalyptic. Why? Do you think what happened is that there's not going to be much construction of office buildings for maybe the next 5–10 years? It really slowed down. While the current stock of offices slowly dissipates.
If you own a lot of office buildings in the centers of big cities, yes, you've lost money. Radical change tends to generate a lot of winners and losers. But I don't think it's the end of the office world. And yes, they're a bit more empty. I mean, Fridays are gone. Roth, the head of Vornado, this vast American real estate company, said they given up on Fridays.
Nick Bloom: Yeah. He said Friday is dead. That was his exact words. So you are now looking at a three-phase week. Monday through Thursday, when people are typically at work; Friday, when they're working but are home; and Saturday and Sunday. Apparently, restaurants’ biggest night is now Thursday night. People work from home on Friday, but they also tend to start a little later.
Read: The FlexOS Guide to Asynchronous Work
It's always been radical, as in 2020, back to a more moderate rate of change, but yes, I personally would not be building any new offices in big city centers for a while, unless maybe they're growing like crazy, maybe Bangkok, or I don't know which cities. There are some Asian cities, particularly in Asia, that are growing, and some in Africa are growing very fast.
But otherwise, I'd be nervous about that market.
Daan: Definitely. Do you then see that again, if people are coming in pretty consistently, let's say two or three days per week, that everyone just keeps their own desk, they keep their photo frame on their desk, and they go to their assigned desk, or?
Nick Bloom: Yeah, that's right. I'd say there are two models. Again, the world is much more complicated. Why do I just give you the 50,000- or 30,000-foot version? There are two models.
One is a hybrid. You come in, let's say Tuesday, Wednesday, or Thursday. We all keep our desks upside is simple. The downside is that you're not saving any space. Or B, if you say right, team A, you are Monday, Tuesday, Wednesday; team B, you are Tuesday, Wednesday, Thursday; team C, you are Wednesday, Thursday, Friday, etc.
On the upside, you save a bunch of space. You could save whatever 40% of space you have at maximum.
The downside is that now everyone's going to have a clean desk every day, eager to click on somebody who may take your desk.
The second downside is that somebody is going to have a Friday. Someone is going to have a Monday, and these people are often very happy about it.
The third downside is that if you ever want both teams to work together, you may find there's no common date.
And the fourth downside is that if it seems unfair, what I've heard is that people say, Well, we're going to change it. So not everyone's going to have Friday indefinitely. But then you get this nightmare of, I'm going to organize childcare. And for the next six months, we choose Wednesday and Thursday and Wednesday, Thursday, and Friday. So it actually gets quite complicated, and in the end, most companies I talked to are saying maybe we'll go to that scheduling model. But for now, have you been on the desk?
Now there are some interesting enough companies that downsized so much during the pandemic that they can't do that anymore, and they're kind of struggling a bit. I think it might have been Bloomberg or the Wall Street Journal, some journalist, or maybe the New York Times, who was talking; they said there are now more people, or the F.T., there are more journalists than there are desks.
And they said, Are you to come in early to grab one; otherwise, there's no desk? So it's clear, and I've heard this from three or four companies, that real estate guys got really enthusiastic about downsizing in 2021. Now they want people back from hybrid. They discovered you're only doing 60% of the days, but they're all on Tuesday, Wednesday, and Thursday.
So, pick your poison. But look at the very minimum, with no one worse off than before. If you just have the same office space, give them the same desk. They just work Monday through Friday; it's no worse off. And also, to be clear, pre-pandemic, we didn't use offices on Saturday and Sunday. We didn't use them until 6 a.m. It's not that radical, actually.
Read: The FlexOS Guide to Hot Desking
Daan: Exactly. When you said that, the landlords were saying Fridays were dead. We never used to worry that Saturdays and Sundays were dead. That's just implied. So maybe there's just a new reality.
Nick, I know you have to get back to other obligations, more important ones than this interview. So I really want to thank you for your time. I just wanted to end with two very quick questions.
Number one is that you obviously talk a lot about remote work, but I've seen some amazing stats come out of your research. Do you have any favorites—maybe an odd one that came out of your research?
Nick Bloom: I mentioned one of them today. We were talking about LinkedIn and Twitter. It didn't take up that much space. Rather, it's pretty shocking, which is why we ask people what would happen if they were sick.
Now, I will be more precise. We asked people, and we saw over 10,000 Americans. We asked them, Were you sick at all last week? And 600 said yes. And we asked them, What did you do in terms of work? And the options were to work from home, go to work, or not work at all. And for those who could not work from home, 75% said they'd go into work anyway, which is pretty horrifying. They're sick and heading in anyway. But for those that could work from home, it's still shockingly high; 35% said they're going anyway, but another 35% said they will work from home, and the rest said that they wouldn't work.
That stat says if you want to head off future pandemics, future infections, even just a little local flu and things, working from home, particularly with some flexibility, is a great idea because they've stopped X from coming in and infecting the rest of the office.
Daan: Absolutely. That's shocking, and again, that's just another maybe undiscovered benefit of hybrid and remote work.
Then the very last one: if there was one thing that you wanted to communicate to the world, one wish you have for humanity, something that you could put on a big billboard for people to see, what would it be?
Nick Bloom: I think it's all because the pandemic led us to have this enormous increase in work from home. But it's been pretty incredible. So for companies, it's actually been a big boon because you can have happier employees, a lower turnover rate, and save a lot of office space. For all of us as employees, as an enormous boon. I mentioned before that people value hybrids about the same as an 8% pay increase.
And for our families, I spend much more time at home now because of that and see my kids. And finally, for the environment, I'm trying to calculate out the numbers, but it looks like the net effect is pretty positive from the huge reduction in commuting and a lot of business travel. So interesting enough, commutes are down, and leisure travel is back to pre-pandemic levels. Business travel is still down because people aren't traveling for that 1-hour virtual meeting they're doing on Zoom.
If there is any silver lining, I feel very positive that this work-from-home revolution has been amazingly good, and it makes me wonder what else is out there lying undiscovered. Another one, as a parent of kids, is a three-month summer holiday. This came about because, a hundred years ago, I used to have the kids out of school to harvest the field.
But none of my kids are harvesting the fields anymore. It seems like an inefficient use of schools, and now I'm sure we could organize for parents. I mean, it was a headache in the summer to deal with camps and stuff. So it has to be a better way to do that than the kind of Victorian system of vast summer breaks.
Daan: Yes, absolutely. Okay, great. Nick, thanks so much for being on. Thanks for sharing your insights. And we'll make sure to link your LinkedIn and also your websites in the show notes so that people can discover more of your research and your findings. Thanks so much for being on.
Nick Bloom: Great. Daan, thanks very much for having me. It's been a lot of fun.