When the Covid-19 pandemic hit, tech companies were among the first to close their offices and allow (or even require) fully remote work. It was considered a temporary solution to achieving social distancing and became an accidental social experiment in the workplace. Workers reported greater flexibility, better work-life balance, and increased productivity, among other benefits. A 2020 Stanford study showed that business productivity increased by 13% when comparing business profits to previous years.
While data shows remote and hybrid working boost productivity and bottom lines, some tech companies are demanding a return to the office. Last week, Amazon announced it would require some employees to return to the office in a memo from CEO Andy Jassy. And Amazon is not alone. Several other tech companies have called some employees back to the office at least a few days a week.
In this post, I’ll delve into what’s driving these return-to-the-office (RTO) mandates and concerns about the proximity bias these decisions have wrought in the workplace.
What is proximity bias?
Proximity bias refers to people’s tendency to favor and give preferential treatment to individuals who are physically present or working near them. In the workplace, this bias can cause local employees to be perceived as more dedicated, engaged, and productive than their remote counterparts. It can also lead to remote workers being excluded from meetings, not relaying important information to people working away from the office, and more.
Amazon’s recent return to work announcement sparked a healthy and engaging conversation on LinkedIn, Reddit, and other social media sites. Some employees have complained about being forced to work in an office only to be stuck on conference calls all day. Others announced the return, citing the lost camaraderie an office environment provides. Still others lamented the loss of the flexibility and agency needed to perform at peak capacity without burning out. This all leaves the question: is proximity bias worth worrying about?
The reality of proximity bias and its effect on culture
Is proximity bias real? A recent study found that, in the event of recession-fueled downsizing, 60% of US managers said that remote workers are very likely to be the first to be laid off.
Amazon’s Jassy may also have shown some bias in her memo to employees. In it, he proclaimed, “Teams tend to connect better when they see each other face-to-face more often. There’s something about being face-to-face with someone, looking into their eyes and seeing that they’re fully immersed in whatever it is you’re discussing, it brings people together. Teams tend to find ways to work through difficult and complex tradeoffs more quickly when they come together and map everything out in one room.” Simply because Jassy claimed this, Amazon’s leadership might believe it to be objectively true, which could introduce a proximity bias.
The truth is, the masses have spoken and want to work remotely. Approximately 85% of remote workers report that they would like to continue working from home at least part-time for the rest of their careers. Meeting these desires will require massive compensation for companies forced to reconcile employee preferences with things like tax breaks for companies with employees in the office.
And at the end of the day, putting company culture first often leads to better company performance. A new McKinsey research report highlights the need to build human capital and foster collaboration; it also points to the economic advantages of supporting healthy work cultures. The fact is that companies that prioritize the formation of human capital are more resilient and have greater growth and greater profits.
Anu Madgavkar, McKinsey Partner and lead author of the report, summarized the people and performance (P+P) data: “P+P winners (have) the ability to build very collaborative, bottom-up knowledge of organizations and , then think about what kind of culture promotes that,” she said. “(It’s) the ability for people to feel free enough and supported enough and able to really participate very actively in what’s going on in their company.”
It can easily be concluded that building a culture of support and collaboration – and doing the work to sustain this over the long term – leads to greater employee satisfaction, productivity and profits. But how does a remote work environment affect these efforts?
Is remote work a viable long-term solution?
On the one hand, there are many jobs where remote work is not possible, because many functions simply cannot be done from home. For example, Amazon warehouse packers cannot be remote and still do their work, while an AWS account executive would likely be able to complete vital tasks from almost anywhere with a broadband connection.
A Microsoft study on the effects of remote work on collaboration between information workers published by Nature Human Behavior revealed that the productivity boost from remote work may be short-lived. Additionally, in a Future Forum survey of more than 10,000 employees, 41% expressed concern about how inequality between office-based, hybrid, and fully remote employees could negatively impact work culture.
Remote workers may also miss out on some aspects of knowledge transfer, where the experiences of one set of people within an organization are transferred and used by other groups within the organization. This type of knowledge transfer often happens informally between meetings, at office socials, or simply witnessing other people’s work when they’re in the same space. This can lead to its own kind of proximity bias.
Bringing it all (work from) home
The pandemic’s remote work culture has changed the way people and companies approach employment. Companies that offer more flexible work situations have access to a greater pool of talent across a wider geographic and socioeconomic area, creating a more diverse and equitable workplace. In other words, it’s expensive to live in many of the cities where the big companies are concentrated, and that’s before you add in the expenses for commuting, office attire, daycare, and more. In some places, having an office job is too expensive for many people. But remote work changes that.
By shifting to remote work during the pandemic, companies have unknowingly removed barriers to entry and inclusion that were not widely recognized. This is a good thing and, insofar as it can sensibly be continued now, it should be. When determining the balance between remote, face-to-face and hybrid work, companies must look not only at the role of the job, but also at many aspects of performance and productivity data, employee engagement, job satisfaction, retention and other factors.
Companies are wise to allow part of their workforce to continue to work remotely, leading to happier workers and a more inclusive workplace. To avoid proximity bias, companies should evaluate all team members or candidates based on their skills, not their location. Organizations can achieve this by using objective performance metrics in their assessments.
As the tax fallout comes to a head this year, layoffs are weekly news, and expensive office buildings sit idle, I look forward to seeing what balance is struck in hybrid working that enables productivity, engagement, and scale across organizations. And I hope those decisions are based on data – not based on who shows up in the office.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.
Moor Insights & Strategy provides or has provided paid services to technology companies such as all technology industry research firms and analysts. These services include research, analysis, advice, consulting, benchmarking, acquisition matchmaking, and video and speaking sponsorships. The company has had or currently has paid business relationships with 8×8, Accenture, A10 Networks, Advanced Micro Devices, Amazon, Amazon Web Services, Ambient Scientific, Ampere Computing, Anuta Networks, Applied Brain Research, Applied Micro, Apstra, Arm, Aruba Networks (now HPE), Atom Computing, AT&T, Aura, Automation Anywhere, AWS, A-10 Strategies, Bitfusion, Blaize, Box, Broadcom, C3.AI, Calix, Cadence Systems, Campfire, Cisco Systems, Clear Software, Cloudera, Clumio, Cohesity, Cognitive Systems, CompuCom, Cradlepoint, CyberArk, Dell, Dell EMC, Dell Technologies, Diablo Technologies, Dialogue Group, Digital Optics, Dreamium Labs, D-Wave, Echelon, Ericsson, Extreme Networks, Five9, Flex, Foundries . io, Foxconn, Frame (now VMware), Fujitsu, Gen Z Consortium, Glue Networks, GlobalFoundries, Revolve (now Google), Google Cloud, Graphcore, Groq, Hiregenics, Hotwire Global, HP Inc., Hewlett Packard Enterprise, Honeywell, Huawei Technologies, HYCU, IBM, Infinidat, Infoblox, Infosys, I nse ego, IonQ, IonVR, Inseego, Infosys, Infiot, Intel, Interdigital, Jabil Circuit, Juniper Networks, Keysight, Konica Minolta, Lattice Semiconductor, Lenovo, Linux Foundation, Lightbits Labs, LogicMonitor, LoRa Alliance, Luminar, MapBox, Marvell Technology , Mavenir, Marseille Inc, Mayfair Equity, Meraki (Cisco), Merck KGaA, Mesophere, Micron Technology, Microsoft, MiTEL, Mojo Networks, MongoDB, Multefire Alliance, National Instruments, Neat, NetApp, Nightwatch, NOKIA, Nortek, Novumind, NVIDIA , Nutanix, Nuvia (now Qualcomm), NXP, onsemi, ONUG, OpenStack Foundation, Oracle, Palo Alto Networks, Panasas, Peraso, Pexip, Pixelworks, Plume Design, PlusAI, Poly (formerly Plantronics), Portworx, Pure Storage, Qualcomm, Quantinuum, Rackspace, Rambus, Rayvolt E-Bikes, Red Hat, Renesas, Residio, Samsung Electronics, Samsung Semi, SAP, SAS, Scale Computing, Schneider Electric, SiFive, Silver Peak (now Aruba-HPE), SkyWorks, SONY Optical Storage , Splunk, Springpath (now Cisco), Spirent, Splunk, Sprint (now T-Mobile), Stratus Technologies, Symantec, Synaptics, Syniverse, Synopsys, Tanium, Telesign, TE Connectivity, TensTorrent, Tobii Technology, Teradata, T-Mobile, Treasure Data, Twitter, Unity Technologies, UiPath, Verizon Communications, VAST Data, Ventana Micro Systems, Vidyo, VMware, Wave Computing, Wellsmith, Xilinx, Zayo, Zebra, Zededa, Zendesk, Zoho, Zoom and Zscaler. Moor Insights & Strategy Founder, CEO and Chief Analyst Patrick Moorhead is an investor in dMY Technology Group Inc. VI, Fivestone Partners, Frore Systems, Groq, MemryX, Movandi and Ventana Micro.