Rewards And Punishments: Remote Work And Returning To The Office

The ongoing struggle between employers and employees over remote work continues, with some employers threatening remote workers, while others offer more in-office benefits. We’ll see where it all comes out, but our tight job market currently gives workers—at least college-educated ones—the upper hand over employers.

The Washington Post recently reported how Google
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is moving from rewards to threatening punishment for its remote workers. For the past year, Google has been “luring” its remote workers “with free food and other perks.” But recently Google said workers must come in at least three days per week, or face negative consequences on their performance reviews.

Google isn’t alone. Amazon, Apple
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, Citigroup
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, JPMorgan Chase
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, Goldman Sachs, and many other big name employers are requiring workers—at least senior managers—to be in the office at least two or three days per week.

But notice that hardly any employer is ordering people back for a full five-day workweek. Elon Musk has been one prominent exception. Last year, Musk ordered Tesla employees to “stop phoning it in” and come into their offices, not some “remote pseudo office.” And in March, he emailed Twitter employees (at 2:30 am) that “the office is not optional.”

It isn’t clear Musk can make these commands stick. But even if Musk’s companies go to full-time office, they’re bucking current trends. The other big firms mentioned above aren’t calling for full-time office work (except for some senior managers), just two or three days a week—so-called “hybrid” scheduling. And hybrid seems to be winning.

The data on hybrid work are messy and noisy, using self-reports from workers and employers, and sometimes using different definitions in research. The federal Bureau of Labor Statistics (BLS) reported that in August-September of 2022, 27.5% of establishments reported employees teleworking “some or all of the time.” Put another way, that would mean 72.5% didn’t report any teleworkers.

That number seems lower than others. The Pew Memorial Trusts have reported that 41% of “employed adults with a teleworkable job” are working from home “some or most of the time,” while 35% report of them report working from home “all of the time.” How to reconcile these differences?

First, remember that the BLS report is all establishments, including industries where there’s very little teleworking—retail trade, construction, hotel accommodations and food services. In contrast, the Pew figures are for people “with a teleworkable job,” so it stands to reason their figure is higher. In fact, Pew reports “the majority of U.S. workers overall (61%) do not have jobs that can be done from home.”

Earlier BLS research found telework concentrated in business, financial, and technology jobs, many of which require college degrees. And research has confirmed that workers with college or post-graduate degrees are both more able, and more likely, to telework.

For example, the Census Bureau’s weekly Household Pulse Survey recently reported that 44% of respondents with college degrees or higher reported some hybrid work, compared to only 27% of those with a high school or GED degree. In contrast, only 16% of the higher educated group reported no telework at all, compared to 37% of the high school educated. This also means teleworkers are disproportionately white and higher-income.

The concentration of telework among higher educated workers is another reason why employers are struggling to get them back to the office. Unemployment is currently very low for the entire labor force—3.7% in May. But its even lower for adult workers with a college degree or higher—a very low 2.1%. A good portion of that is likely what economists call “frictional” unemployment—mostly made up of people changing jobs, transitioning from school, relocating geographically, etc.

Facing this tight labor market, especially for higher educated and technical workers, employers may have to offer hybrid work or other inducements. Some research suggests that “employees who have become accustomed to hybrid work” would give up some salary in order to not commute five days a week, and that higher-salaried workers would be more willing to do so.

Many human resource professionals reportedly see hybrid work as an “effective recruiting tool,” especially for those with child or dependent care responsibilities. Since that unpaid work falls heavily on women, some worry hybrid work will create a new “mommy track,” limiting women’s future career opportunities. This is especially worrisome for HR departments and employment lawyers.

For now, as Forbes contributor Edward Segal reported last November, employers are struggling to figure out what incentives might get workers back to the office, at least part of the time. We’ll see how telework plays out, especially if the labor market turns sour and employers can demand more from their workforce.

Getting workers back to the office will take more than incidental benefits like snacks and free coffee. But tough-minded employers also will need more than idle threats when their workers can easily find another job.