“Where” may not be as important as “how” people work.

First, let’s acknowledge that the U.S. labor market is still a complete disaster.

U.S. employers added 49,000 jobs in January, after a revised drop of 227,000 the month before. Unemployment fell to 6.3%, from 6.7% in December, as hundreds of thousands of people left the workforce.

That last part is key: That the unemployment rate fell not because of jobs being created or companies rehiring workers, but because people opted out of the workforce.

With that being said, it’s a good time to check in on how this whole “future of work” situation is going, given that we’re coming up on a year since the world got turned on its ear.

Remote May Be the New Reality

If you’ve been watching the headlines, you may think working from home is here to stay, regardless of what the future might bring for the economy or the healthcare landscape. Not only are people thrilled with not having to commute long distances, but they’re enjoying no longer being subjected to the demands of Big Pants. In short they’re out there and they’re loving it. Remote work is expected to dramatically increase, thanks in part to new, more welcoming attitudes toward technology among employers.

Companies are embracing this idea or remote work, attracted not only by the increased productivity of the staff but also at the idea that they could unload some of the expensive downtown real estate they’ve been leasing. In fact, white collar companies last year seemed to be competing to set “return” dates that are farther out if they’re not going ahead and saying people can work remotely for the foreseeable future if they so choose.

Research from Bain & Company (via Harvard Business Review) found companies have benefited from how finding and retaining talent has become easier because, with remote work now in place, location isn’t as much of an issue as it once was. People no longer have to be within driving distance of an office to be considered, and productivity has increased as a result.

A Gartner study reported that roughly three-quarters of employees who are new to the remote work world say work culture for them has improved with the emergence of remote or hybrid models. The positive changes in culture and engagement cited by Gartner indicate those companies are among the “best” as categorized in the Bain research, while others have had a harder time maintaining productivity, something that’s significantly influenced by employee engagement.

I’m willing to bet that many of the “best” companies – those who have seen productivity rise – have adapted in part by focusing less on employees being present for the traditional 9-to-5 workday and more on whether or not the work is being done and being done well. Doing so relieves a great deal of the pressure employees who also happen to be parents or other caregivers feel, giving them a measure of flexibility to holistically manage their life. It remains to be seen if changes to the five-day workweek are next or if that’s too much for us to handle right now.

Who Will Return to the Office?

It might be more than a little hyperbolic to say that the office as we know it – and have known it for a century or more – is over, but that doesn’t mean significant changes haven’t and won’t continue to happen.

Work from home isn’t for everyone, of course. Nor is it even an option for everyone. A PricewaterhouseCooper study found younger, newer workers are more likely to prefer the in-person environment than those who are older, likely because younger folks have fewer at-home responsibilities to manage and because they believe face-to-face is better for networking and building up a reputation.

Who returns to the office and who doesn’t could be dictated by who has or hasn’t received the Covid-19 vaccine, with the EEOC releasing guidelines saying companies can keep people who haven’t received the shot/s from coming back. Most importantly, that differentiation doesn’t, according to the EEOC, count as discrimination. An individual being able to prove they’ve received the vaccine, then, becomes important for everyone, despite the very real concerns such identification can cause other problems.

Right now most layoffs have happened among the elderly, women, black, Hispanic, women and low wage workers, including those who live in poverty-heavy neighborhoods. In short, it’s those outside the billionaires who are getting richer because of the stock market and other factors. Based on recent unemployment reports, it’s unclear if or when those people will be rehired, much less be in a position to decide whether or not they want to be in the office or not.

But What About Productivity?

Part of the Bain study shows differences in productivity between companies have widened, with top companies getting farther out in front and others being left further behind. That’s similar to how big companies have gotten bigger during the pandemic while smaller companies have had a hard time because they lack necessary infrastructure and other tools.

We estimate that the best companies … have grown 5% to 8% more productive over the last 12 months. Most organizations, however, have experienced a net reduction in productivity of 3% to 6% (or more) due to inefficient collaboration, wasteful ways of working, and an overall decline in employee engagement.

The short version is that companies successfully keeping employee productivity high before 2020 made a decent transition to work-from-home realities, while companies that weren’t doing well on that front had a harder time.

The companies that are the very best at managing scarce time, talent and energy — that is, the average of the top quartile of companies in our research — are 40% more productive than the rest (the average of the remaining three quartiles). This enormous productivity gap is a key source of competitive advantage for the very best companies.

Not only does talent acquisition and engagement influence productivity, according to Bain, but the study showed the number of meetings being held during the era of remote work increased by 13%, as did the number of people in those meetings. The only good news is that the average length of the meetings dropped.

Those numbers would seem to correlate to how many companies and managers have spent much of the last year wringing their hands over the loss of “watercooler moments,” decrying remote work because it removes the serendipity that supposedly occurs when two coworkers just happen to run into each other in the hallway and come up with a great idea. Because those weren’t happening, the number of meetings had to increase, apparently.

At the end, it seems each company will have to carve out its own future, deciding what kind of arrangement works best for the organization as a whole and the individuals it employs. In an ideal situation, those individuals have the same sort of freedom to make their own choices to adapt to a very different situation than was in place just over one year ago.