The shift to remote work represents perhaps the single greatest modern opportunity to improve your company's happiness, diversity, economics, productivity, agility, talent pool and environmental impact. It's easier to do now than ever, and the world's most innovative companies are adopting it at an unprecedented rate. But while this may be an incredible opportunity for companies that embrace remote work, it's also poised to become an existential threat to companies that don't.
I believe that offices are a fundamentally antiquated concept. So in 2016, I sold nearly all of my belongings, moved to Brazil, and officially started working remote. I traveled, met and worked with some incredible people, and grew dramatically as a person and professional. A few years later, I moved to Silicon Valley and returned to an office.
Through this experience of oscillating between having an office and not, I've developed a deep appreciation for the impact that flexible work arrangements can have on individuals, companies, and society as a whole. And while remote work has become a more and more common reality, it has also been met with deep resistance and misconception.
It's very easy to treat remote work like it's just another "ping pong table" or "nap room". That is to say, it's easy to view it as a trendy Silicon Valley job perk. But it's not; it is a fundamental shift in the way that humans work and live, and it's bigger than any single company or industry.
69% of U.S. companies offer flexible work arrangements today, amounting to an increase of 173% since 2005 alone. 66% of knowledge workers and 71% of Millennials believe the office will be obsolete by 2030. This shift represents perhaps the single greatest modern opportunity to improve your company's happiness, diversity, economics, productivity, agility, talent pool and environmental impact. All in one move.
Remote work makes people happy. 71% of remote workers say they're happy in their job, compared to only 55% of office workers. Over 80% of U.S. workers say that working remotely would make them happier. 91% of remote workers are glad they went remote, citing a better work-life balance, more time with family, and no commute as major contributors to their happiness.
While studying what makes people happy, researchers at Princeton found that commutes were the biggest detractor and family relationships were the biggest contributor to general human happiness and psychological health. The top reason people move is for work, and the top reason they don't is for family. Simply put, offices separate families. They force people to move away from home and spend an unnecessary amount of time just going to and from the office.
In San Francisco, over a lifetime, if you commute 3-4 days a week, you're talking about giving up 500 days of your life to commuting.
– Scott Mautz, Senior Executive at Procter & Gamble
The average commute time in the U.S. is 50 minutes, and has been steadily on the rise for the past five decades. This means the average commuter loses 9 days of their life per year to the commute. But that's not all they lose. Couples with commutes longer than 45 minutes are 40% likelier to divorce. Lengthy commuters experience more recurring back and neck pain, sleep and exercise less, and eat more fast food.
A 20 minute commute increase has the same negative effect on job satisfaction as a 19% pay decrease, and one in four people have quit their job because of their commute. Robert Putnam, a political scientist at Harvard, estimates that every 10 minutes spent commuting results in 10% fewer social connections at work.
Remote work is inclusive. Modern companies strive to champion diversity and inclusion, but are severely limited by the office, which excludes entire populations from the workforce by imposing geographic, economic, physical and cultural restrictions, among others. "Anybody can work here, including you, so long as you live in this country, in this state, in this city, which is invariably expensive and couldn't be further away from your family and culture..."
Remote work removes these restrictions and opens doors for women, minorities, parents, people with disabilities and more. Across virtually all categories, diverse candidates say that flexible work is the top benefit they desire. Women are significantly more likely than men to prefer remote work, and they're more likely to quit a job because it doesn't offer remote work. They also experience more harassment in an office setting, and are disproportionately affected by the lack of privacy that offices afford. Minorities are less likely to live in top job markets, and are given more access to opportunities when companies support remote work. More than one-third of remote workers are parents who decided to go remote so they could care for their children.
463,000 disabled Americans currently work from home, and 83% of them wouldn't be able to work from an office. Even so, only 7.1% of disabled Americans have been able to secure remote roles, while 81% are unemployed today. Remote work makes it possible for people like Matthew Ramir, a developer with cerebral palsy who once broke his ankle while commuting, to do his job safely, comfortably and confidently.
Being able to work from home is a huge stress relief. It gives me a lot of confidence that I'm able to function as a normal employee and be able to navigate the workplace with that disability.
– Matthew Ramir, remote developer with cerebral palsy
From military spouses and veterans, to senior citizens, to introverts and people with social anxiety, remote work allows for accessible, enjoyable, and personalized work arrangements which respect the nuances of the individual. It broadens the talent pool, enabling companies to hire people they never would have previously had access to, regardless of identity, socioeconomic status, physical ability or location.
Speaking of location, geographic diversity is often overlooked, but the reality is that human cognition and creativity are inextricably linked to physical environments. When everyone is in the same environment, as they are in an office, their thoughts are homogenized. Remote work allows the space for diverse and creative thought, and in doing so, helps companies develop truly global mindsets. It's one thing to empathize with someone, it's another thing to be someone. To live in the community, speak the language, and share the emotions of the people you build for. The only way to do that is with a diverse, distributed team.
Remote work enriches companies, employees & economies. Multiple studies have shown that by 2030, the US could see an economic boost of $4.5 trillion annually from flexible working alone, with much of that benefitting the people and communities that need it the most, like minorities and women, the unemployed and underemployed, and the vast number of underdeveloped rural communities across the country. But going remote doesn't just boost the economy. It also saves employees and companies a ton of money.
Apple spent $5 billion constructing Apple Park in Cupertino and Google spent $2.4 billion acquiring Chelsea Market in New York. Offices occupy 474 million square feet of space in Silicon Valley alone (a region with a housing shortage of 7:1) at an average cost of $158 per square foot per year, or $23,858 per employee per year. And here's the kicker: studies have repeatedly shown that, across all industries, office desks are vacant 50-60% of the time.
Even modest flexible work programs have been found to save companies an average of $11,000 per employee per year. In 2005, Aetna started allowing its employees to transition to remote work. Today, 14,500 of Aetna's 35,000 employees have gone remote, allowing them to cut 2.7 million square feet of office space at $29 a square foot, for about $78 million in cost savings per year. Amazon, American Express, General Electric, McKesson, Dell, Salesforce, Oracle and countless others have all done the same thing and saved multiple millions per year in the process.
If a Silicon Valley company with 30,000 employees were to go 50% remote, they could expect a savings of $357 million per year, on real estate costs alone.
And real estate is just the beginning. On average, it costs $97,166 to relocate an employee. Typically, they're being brought to pretty expensive and crowded places. The top job markets are almost always the cities with the highest cost of living, like New York, Seattle and San Francisco, where the average home price soars above $1 million. In Silicon Valley, you'll need a salary of more than $230,000 to afford a starter home. This has become such a problem that companies are spending billions of dollars to build housing units near their offices, in addition to inflated salaries, benefits, and tax expenses.
Then, employees spend an average of $4,000 per year commuting to the office. In the process, significant wear and tear is caused to expensive public infrastructure, like roads and train systems. Over 150 million people commute to work every day in the US. 76% drive alone, 9% carpool, 5% use public transportation, and 3% walk or cycle. In more than half of the top U.S. metro areas, more people work remote than commute by public transportation. The reduced impact on public infrastructure is so significant that the IRS created special tax deductions just for people that work from home. And at the end of all this, companies invest millions of dollars in research immersion programs to send their people back out into the world from which they came.
Remote work improves productivity. Researchers at Stanford University found that remote workers are an average of 35-40% more productive than their in-office counterparts. Arguably, one of the most productive aspects of offices is their ability to facilitate collaboration and connection. But they can also hurt it. 70% of office workers report feeling distracted at work, citing office noise and interruptions from co-workers.
Studies have shown that office workers can lose up to 86 minutes per day because of noise alone, and 65% of creatives said that silence was the most important requirement for them to do good work. It takes the average person 23 minutes to regain focus after being interrupted. What may be a serendipitous interaction to one person could be a productivity killer to another. Additionally, studies have shown that offices are breeding grounds for sickness. Unsurprisingly, remote workers are less likely to get sick, and thus take 56% less sick days.
Offices were invented during a time when collaboration and communication could only happen in person. The office was never optimal; it was necessary. That simply isn't true anymore.
Remote work also de-biases and reduces bureaucracy by forcing companies to measure performance by results and output, and nothing else. You're probably all too familiar with the fallacy that the people who spend the most time in the office are the most productive. When companies go remote, the focus shifts from office formalities to the work itself, because the work is what's most visible. This allows people to be judged by the quality of their work, rather than their physical appearance or office mannerisms.
Remote work attracts and retains talent. 95% of U.S. knowledge workers want to work remotely, 76% said they'd be more loyal to their employer if they could, and 74% would be willing to quit their job for one that offers remote work. Perhaps most compellingly, companies that allow remote work experience 25% less employee turnover than companies that don't. They're able to hire 33% faster too. Unsurprisingly, a lot of companies are catching on to this. In the last two years alone, there’s been a 78% increase of job posts on LinkedIn that mention work flexibility.
The ability for employees to work remotely used to be a distinctive perk. Today, it’s increasingly an expectation. You might not get special attention for offering flexibility, but you will probably stand out for not having it (and not in a good way).
– LinkedIn's Annual Talent Report
Remote work is inherently flexible. As organizations scale and age, it becomes harder to adapt to change. But when companies introduce work flexibility, they themselves become flexible in the process. During the COVID-19 pandemic, companies all around the world panicked to set up remote work, warning that the transition would result in reduced capacity and services. Meanwhile, remote companies like InVision, Buffer, Basecamp, Automattic and Zapier continued business as usual. Remote companies are decentralized, and decentralized companies are adaptive.
Decentralized work arrangements are a hotbed, and a forcing function, for innovation. They force companies to adopt more efficient tools and processes, communicate transparently and asynchronously, iterate rapidly and openly, and include everyone in the process. Where offices make hallway conversations possible in the short term, they become a crux for broken processes in the long term. You can get away with more inefficiencies in person, because they're less obvious. But those hallway conversations aren't inclusive, aren't documented, and aren't efficient. Yet they're typically one of the things we defend most about offices. They're a bug, and as the transition to remote work causes a company to innovate on its own culture, those bugs are fixed.
Your company is a product, and probably your most important one. It's the one you use to build your other products. You should recognize it has bugs too, and needs to be iterated on.
– Jason Fried, CEO of Basecamp
A company's culture is just as much a product of the company as the goods it sells. And while conversations about innovation tend to focus primarily on products, often the first step to innovating on a product is to innovate on the company which produces it. For this reason, a company's appetite for remote work can serve as a sort of litmus test for its ability to innovate.
Remote work adoption is a highly visible and unambiguous form of innovation. It's something you can ask about in an interview and get a simple "yes" or "no" answer. Often, self-innovation is the genesis for product innovation. If you want to improve the thing you make, you have to be willing to improve the thing that makes it first. The companies that lean into this innovation, rather than resist it, are the same companies that lean into product innovation.
Remote work is better for the planet. Every year, U.S. remote workers prevent 3.6 million tons of greenhouse gas emissions from entering the atmosphere by not commuting. That's the equivalent to planting 91 million trees. With those savings, you could power 538,361 homes for a year. Additionally, this results in 7.8 billion less vehicle miles traveled, 530 million vehicle trips avoided, $498 million in reduced traffic accident costs and $980 million in oil savings. Those aren't projections; they're real EPA statistics representing the impact of remote work today. Simply put, commuters and offices are two of the highest contributors of carbon emissions in the US, and remote work significantly cuts down on both.
But this doesn't even have to happen at a broad systemic level to make a difference. The impact that a single company can have on the environment, simply by adopting remote work, is immense on its own. When Sun Microsystems allowed its 24,000 U.S. employees to start working remotely, they discovered they were preventing the release of 32,000 metric tons of carbon dioxide every year, reducing their carbon footprint by 98%, even after accounting for increased emissions at home. Xerox did the same thing and found that its remote workers drove 92 million fewer miles, saved 4.6 million gallons of gas, reduced carbon dioxide emissions by nearly 41,000 metric tons, and saved the company over $10 million.
Flexible work policies are easier to adopt now than ever. The tools and processes are all in place, the cultural and individual implications have been studied in great depth, and the remaining resistance to remote work typically amounts to little more than general change aversion. My dad has worked fully remote since the '90s. If he could do it then, we can certainly do it now.
In fact, you've probably already had some degree of experience with remote work, even if not through a formal policy at your company. From staying home with the kids to taking shelter from a pandemic, many of us have benefited from flexibility at work, and in turn, we've proven that it's possible. But I want to be clear: quarantine and remote work are not the same thing. One-off experiences with flexible work are not comparable to formalized remote work arrangements.
When companies formally adopt remote work, it becomes ingrained in their culture, and the cognitive load of switching between the office and home dissipates. Remote workers become a priority, and the necessary tools and processes get put into place. But that only happens when organizations make the commitment to do so.
Furthermore, remote work isn't a panacea for your organization's problems. If it sucks to work at your company from an office, it will suck to work at your company from home. It's important to go in with the right expectations, knowing that remote work isn't perfect, but it is a critical step in the right direction. If you're ready to take that step, I have a model that I'd like to propose to you.
Despite the data and arguments presented here, offices (and people who like offices) aren't the problem. Rather, remote work is the opportunity. Companies can choose to go fully remote, partially remote, or simply support flexible work policies. The important thing is that they do what's right for them, within the context of their industry and corporate culture. Most will probably choose to have a little bit of both, and the data indicates that's actually the right way to approach this.
Gallup studies conducted with hundreds of thousands of employees show that the most productive and engaged workers spend 60%-80% of their time remote. They're also the most likely to have a best friend at work - even more so than office workers. Interestingly, these numbers slip as people spend more time remote, or more time in the office.
The sweet spot for productivity and relationship-building is a weekly schedule of roughly one day in the office and four days remote.
With this in mind, I would like to propose what I call the Hub & Spoke model. This is a hybrid approach to flexible work, where companies go regionally remote. Here are the core concepts:
Importantly, this model is flexible and should be adjusted according to the needs and culture of each team that implements it. One could imagine numerous areas of optionality, including:
Truly, optimization is at the heart of remote work. The problem isn't that companies still work from offices; it's that they only work from offices. We're taking a "one size fits all" approach to work arrangements, where the office is the only option. It isn't time to get rid of that option, but it is time to introduce a few others which fit the diverse individuals and teams that comprise a healthy company, and can adapt with the company as it grows.
As companies scale, remote work becomes less of a choice, and more of an unavoidable byproduct of growth. If you've ever worked at a large company, you've probably participated in countless meetings where every attendee is in an office, but nobody is together. You're all participating in a video call from multiple different offices. That's when the oxymoronic term "remote office" enters your corporate vernacular, and at that moment, you're officially de facto remote. You’re physically in an office, but you might as well be anywhere. And it happens much earlier than you'd anticipate. The tipping point is around 300-500 employees, depending on the quality of your organization design.
If you intend to scale your company, you also intend to go remote, whether it's explicitly part of the plan or not.
We recognized this at HubSpot when people started dialing into meetings from different floors of the same building. At the time, we had less than 500 people in the building, spread out across 3 floors. On a much larger scale, we've observed the same phenomena at Google, where we have teams in more than 150 cities around the world. 48% of our meetings involve employees from two or more buildings, 39% involve two or more cities, and 30% involve two or more time zones. It's unsurprising that both companies have become remote work innovators, recognizing the opportunity, and also the necessity.
This is a defining moment for the world's greatest companies, which will be faced with the choice of adopting remote work or hemorrhaging top talent to more innovative cultures. In this way, remote work can either be viewed as a significant opportunity or a great existential threat to a company, depending on how they respond to it. The question simply isn't whether we will go remote. It's when and how, and each company's answer to that will determine whether they're thriving or dying at the end of this.
