As a commercial real estate developer, property manager and broker, there’s an obvious reason to support return-to-office (RTO): We want our tenants to find value in their leases. But on-site headcount, alone, isn’t a great measure of value.
Value comes from innovation, quality, productivity and a motivated workforce. Recent data published by Chicago Booth Review shows that these outcomes are more consistent in RTO environments than in work-from-home (WFH) or hybrid setups.
Early in the 2020 pandemic, studies suggested greater productivity when working from home. However, these results were questioned over time as businesses became better at evaluating productivity against pre-pandemic baselines. Many of the studies showing increased productivity with WFH were based on self-reported data, often reflecting more hours worked rather than actual milestones achieved.
Early pandemic-period productivity studies measured working harder, not smarter.
Trust me…
A well-executed RTO policy shows an employer’s trust in their workforce, believing that employees will use flexibility policies responsibly and commit to professional development and quality.
Advocates of WFH argue that business leaders who mandate RTO don’t trust their employees, and that they want to infantilize or control them. However, even before 2020, companies’ work-life balance initiatives often allowed flexibility for unexpected issues like a sick child or critical repairs to home or auto.
The technology used during the pandemic has made WFH more effective which has led to more employers—including many with post-pandemic RTO policies—to be more flexible when their employees need to work from home unexpectedly.
RTO + WFH: Where does hybrid fit in?
Studies and polls from respected sources such as Stanford, MIT Sloan and the U.S. Bureau of Labor Statistics suggest that hybrid is a solid alternative to WFH or RTO.
Hybrid work can improve work-life balance and was shown to increase retention compared to RTO. It also resulted in better collaboration, learning opportunities, socialization, and mental health compared to WFH. But for every pro, there seems to be a con:
Hybrid arrangements can allow for staggered work schedules, reducing office space and saving money, but collaboration can suffer.
If a company has everyone on site, even one day per week to facilitate collaboration, they lose the real estate cost-reduction benefit.
Assigning hybrid days by departments can increase engagement within departments but decrease collaboration among departments.
This can also impact work-life balance if designated in-office days don’t align with an employee’s outside responsibilities.
However, an RTO model that offers needed flexibility can be a win for both employers and employees.
Finding truths in data
There's a common critique of applied statistics popularized by Mark Twain and attributed by Twain to Benjamin Disraeli:
There are three kinds of lies: lies, damned lies and statistics
This holds true not only in how statistics are applied, but also in how data is gathered.
Data on hybrid and remote work makes an excellent case study of applied statistics, particularly when looking at how data such data has been collected and interpreted in the last five years.
Academicians at the University of Chicago Booth School of Business are studying post-pandemic work models, specifically remote work with more than 20 articles, videos and reports on the topic. In November 2024 CBR Line of Inquiry video "The Costs of Remote Work," Chicago Booth Clinical Professor of Economics Michael Gibbs, Ph.D., uses of more objective criteria to measure WFH employee productivity with a quite different result than those 2020 studies.
Gibbs’ data makes a case for RTO when productivity is measured by working smarter versus working harder. Using consistent, standard pre-pandemic productivity benchmarks Gibbs measured communication, collaboration and innovation (C,C&I) to evaluate productivity.
His data set objectively tallied communication, collaboration and innovation processes that were in place pre- and post-pandemic, as opposed to the employee-reported time spent working that was used to measure productivity in the initial months the pandemic that drove WFH in 2020.
“We found that the quantity of ideas fell statistically significantly in hybrid compared to working from the office, which we had not found from working from home. We also found that the quality of ideas fell, as it did in working from home. However, that was not statistically significant so, in some sense, we don’t have evidence that quality fell, but it is suggestive of a concern about that,” said Gibbs.
Gibbs’ findings are summarized in this table
Pre-2020 Office Baseline | WFH | Hybrid |
Quantity | Equal | Significant decline |
Quality | Significant decline | Insignificant decline |
The RTO model indicates greater productivity by most measures. While the number of ideas and innovations submitted by employees pre-pandemic was maintained during pandemic WFH, the quality declined significantly according to Gibbs’ data. Looking at hybrid work arrangements, employees submitted significantly fewer ideas. In sum, the study found that RTO is the best workplace arrangement for innovation, bred by collaboration and communication.
Additional resources
In addition to the UC Booth academic analyses on remote work, Forbes senior contributor Tracy Brower, PhD, writes about happiness and the future of work for the magazine. Follow both sources to keep up with the changing workplace landscape.
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