Concerted efforts to bring workers back into physical offices are being met with reluctance from many employees and creating a new conversation about the design and purpose of company-owned workspaces.

. . US labor productivity growth has returned to its pre-COVID-19 anemic trend with stark consequences for the economy. Working Smarter is a 4-part series that explores how the issue and the push to adopt new technology to try to fix it affects businesses and workers. AI offers welcome potential boost to sluggish US productivity growth Private equity looks at speedy AI adoption to boost value, maximize efficiency Generative AI to usher in new workplace reality for white-collar workers .

Meta Platforms Inc., Walt Disney Co. and Amazon.com Inc. are among the biggest companies recently seeking to push workers to return to the office. Their employees have pushed back, arguing they can continue to work as or more productively remotely. Workers are finding that sacrifices they made before the COVID-19 pandemic, such as lengthy commutes, lack of flexibility and extended time away from home and family, are not worth the trade-off for the perceived improved efficiency of being in a physical office space with colleagues.

"We were not choosing to go and work in the office, it was just a de facto obligation as part of working for our company," said Phil Kirschner, a senior expert and associate partner with McKinsey & Co. "Now when employees are being told 'You must come back,' they very quickly answer with 'Why?' or 'For what?'"

The ongoing transformation of work, along with a historically hot labor market and advancement in artificial intelligence, has compelled companies to start redesigning offices, allowing for more remote work and taking a hard look at what an office space should ultimately be.

The new normal

As their fully remote workers began returning to the office last year, Uber Technologies Inc. opened a new San Francisco headquarters with large outdoor terraces, a wellness center, operable windows and natural light. The new office headquarters for Marriott International Inc., opened in 2022, features multiple communal spaces and has design features aimed at conjuring more of a home than an office, like multiple couches and a fireplace.

Kirschner, who advises executive teams on post-pandemic workplace strategies and optimization of real estate, says the office of the future continues to evolve, but many concepts that dominated American work life for decades are dying a quick death. The cubicle, for one, is on the way out, as companies now see a diverse mix of space with private offices, workstations and semi-private booths as more amenable to worker productivity and efficiency.

A recent US Chamber of Commerce survey of commercial architects, builders and property owners and managers found that the biggest office building design changes expected were for more flexible workspaces, improved ventilation and social distancing, and allowing for more remote and hybrid work.

"There's going to be a lot of adjustment in the sector for the foreseeable future as we settle into a new normal," said Curtis Dubay, the Chamber's chief economist. "The office going forward is not going to look like it did."

There will be more collaborative spaces but less space in general, fewer corner offices, and more offices built in urban core areas around amenities workers want, Dubay said. Companies that do not update their offices will likely face recruiting and retention challenges.

"Companies want workers back because it's hard to monitor what they're doing when they're working remotely, and it's very hard to build a cohesive office culture with aligned goals when people are remote," Dubay said.

Productivity questions

Most successful companies see the need to offer employees flexibility but also value time spent in the office, where collaboration works best and productivity is improved.

A recent working paper from economists at the Federal Reserve Bank of New York that studied call-center workers at a Fortune 500 retailer found that remote workers answered 12% fewer calls per hour than on-site workers. The reasons for the difference remain unclear.

"It's possible that any worker would be less productive at home," Natalia Emanuel and Emma Harrington, the paper's authors, wrote in a June 20 post. "Yet it's also possible that less productive workers chose remote jobs."

The overall impact of remote work on productivity remains debatable, according to a Goldman Sachs analysis of work-from-home studies, which found it could reduce worker productivity by 18% or actually increase it by 13%.

Office investments

While the productivity impacts remain murky, the best way for collaborative work to get done is in person, said Peter Cappelli, a management professor at the University of Pennsylvania's Wharton School.

"If you care about performance and productivity you're going to be pushing that," Cappelli said.

Very few companies are making the investment in offices more conducive to productivity, he said, and even fewer are clearly making the case to employees why it is important for them to return to the office, even for a few days each week.

"If you want to bring people back, it's not like bringing them back from vacation," Cappelli said. "You need to start with the proposition of why you want to bring people back, you need evidence. What I see mainly is just ramping up the threats."