Why do we need offices?

Technology affects culture

Beginnings

With all the hoorah lately about remote workers returning to their offices full time, I think it’s appropriate to consider why and when we actually need offices.

First, it’s important to make a few points clear about our first tests of telecommuting. My original objective was simply to determine whether it was practical to have remote workers, even for only one or two days per week. In 1973-74, our first test of telecommuting, we still had to use regional offices for the telecommuters because of technology limitations. Those telecommuters worked full time in their closer-to-home offices.

But, with the introduction of personal computers and higher-speed telecommunications, all that changed. Most of the day-to-day information needed for work could be stored in the PC. So, beginning in the 1980s, we could explore working from home at least part time.

Part time (now called hybrid) telecommuting was the rule through most of our and other organizations’ tests, with both private and public sector organizations, into the pre-Covid years. Although the number of full-time telecommuters steadily grew in that period, it was still less than 5% of the total. The usual distribution was about half time; two or three days per week at home, the rest of the days were in an office somewhere. Still, most organizations had no telecommuters whatever. For them, everyone worked in an office.

Then the pandemic Covid hit in 2020. Essentially overnight, organizations around the world were forced to send their office workers to quarantine either at home or to special facilities. At first, I feared that massive economic disruption would occur as a result of hordes of clueless instant-telecommuters with no idea about how to manage it. My fears were mostly groundless. Most organizations quickly adapted to the change. Many found the changes liberating and profitable. As the Work From Home advocates and their supervisors gained in experience, they became more effective, productive and adaptable.

Now the executives of many large organizations, private and public, want to go fully back to the old ways. Let’s examine why.

Stakeholders

There are multiple parties engaged in the Return To Office tussle: Employers, employees, support services and urban governments. The struggle is unequal-ish. Here are some of the positions.

Employers

Employers simply want to get back to “normal”: the way things were BC (Before Covid). They didn’t have to worry about the techniques of managing people who weren’t sitting before their eyes during much of the working hours. They could call meetings at a moment’s notice. They could tell at a glance whether employees looked productive. They could easily move around the physical office to be sure that all was well. It just came naturally.

They didn’t have to learn new management techniques. They didn’t need to focus on pre-agreed schedules, success criteria, equipment needs and home safety conditions. They didn’t have to plan meetings and participants in enough time to make sure everyone could connect together. They didn’t have to worry about productivity or motivation levels for distant workers. They didn’t have to worry about imbuing the organization’s culture in their employees; it came naturally. They didn’t have to worry about explaining to their superiors or clients about how empty the office looked when there were many home-based-workers. They could just concentrate on doing their real job.

Employees

Telecommuters disliked, even hated, the daily commute and its attendant air pollution. They craved the extra time it gave them to do whatever they liked on non-commute days. They were less stressed and felt more creative. They were more certain about their own performance now that they had regularly discussed the specifics with their supervisors.

They were able to keep up with the organization’s culture and gossip even better than their colleagues stuck in the office. They were able to go to the office on those occasions when they needed to talk to colleagues or clients face-to-face. They could exercise easily. They didn’t have to pay high prices for lunch in the canteen or at restaurants down the street. They were impatient with agendaless and wandering meetings. They became more engaged in neighborhood activities. They became quite willing to quit and find another job; one that encouraged WFH.

Many telecommuters became teleworkers by moving away from their organization’s city to a nearby or quite distant city. For them the commute to the organization’s home office became a costly chore, to be endured only occasionally. These people tended to be the more highly coveted by their employers.

Support services

Owners and staff of stationery stores, restaurants, liquor stores, cleaners and similar business dependent on the sudden absence of thousands of office workers were shocked and dismayed by the Covid-induced apocalypse. Weekday trade plummeted (including that of one of my restaurateur neighbors). Many businesses shut down completely or adapted to lower rates of traffic. Many moved elsewhere in, or outside of, the city.

Owners of downtown buildings, especially those with large amounts of office space, were devastated by Covid. As were employers with long leases for such space. Some owners have already begun to rebuild their office spaces for residential or more user-friendly designs. Lessees have also been negotiating their downtown space uses.

Urban governments

Downtown areas are major resources for cities, not only because of their large tax bases but also as attractants of the cities’ cultural activities. The drop of office uses has had a similar effect on the tax base. Causing great consternation among urban planners and city governments. They, too, would like the city to return to “normal”.

There are also land use and zoning issues. For example, in 1990 I was involved in changing the Los Angeles zoning laws to permit home-based workers. Many cities prohibit such activity. There are similar issues with housing associations, condominiums and the like that have to be resolved to accommodate teleworkers.

The Core Issue: Need

Why do we need offices? What good are they? Many of the assumptions listed above are questionable in practice. For example, in practice, employers can’t always call meetings at a moment’s notice because some employees are in different parts of the building. They can’t tell that employees are productive just because they always look busy. Properly trained managers usually find the job easier because the prime rule of successful teleworking is the implicit (or explicit) contract stating the employees’ work products, quality and schedule. That is, the burden of getting the work done is placed on the employee, not the supervisor acting as a cop.

The real need for an office is for occasions where the technology is inadequate to convey the needed nuances of communication that only face-to-face can satisfy, where there is expensive equipment available only in the office, or where there are physical security considerations.

Typical reasons for needing to be in the office are meetings for getting organized and starting or modifying new projects. That is, occasions where there is uncertainty among work groups. Hopefully, these are relatively infrequent in well-managed organizations. Similarly, new, inexperienced employees often need in-office time to become acclimated to the operational procedures and nuances of the organization. This might take a week or two to a few months, depending on the complexity of the organization.

One of the most important reasons for working out of the office include the presence of noise or too many distractions, where working at home has significantly lower levels of them.

Our decades of research in this area show that, starting with one weekly day at home, workers are more productive, less stressed, take less sick leave, feel more creative and are more loyal to their employers. These results tend to increase as the number of days per week at home increase until they tend to plateau around day four.

And, of course, there’s this counter example announcement sent on 2 February 2025 to all USAID employees:

“At the direction of Agency leadership, the USAID headquarters at the Ronald Reagan building in Washington, D.C. will be closed to Agency personnel on Monday, February 3, 2025. Agency personnel normally assigned to work at USAID headquarters will work remotely tomorrow, with the exception of personnel with essential on-site and building maintenance functions individually contacted by senior leadership.”

In this case the physical security of a federal agency was breached by a group of lawbreakers, allegedly including Elon Musk. Musk is well-known for insisting that all employees work in the office full-time.

What Next?

Why do big employers persist in insisting that their employees return to the office full-time? It can’t be because they get no net benefit from teleworking. In terms of the economics, teleworking produces a positive bottom line result for both employers and employees. Is it the edifice complex; does the organization’s status depends on having big buildings with its name on it? Is it because the C-suite likes proximity to other big company headquarters, regardless of cost? Is it the Caesar Complex; the need to have crowds nearby under your direct control? What is it? I’ve yet to see a rational reason for RTO.

Post-Covid the level of office space occupancy in central business districts worldwide has leveled off to between 30% and 50% of what it was pre-Covid. There are many consequences of this still to come.

Those are the subjects of more articles.