For employers banking on a surge of workers returning to the office this summer, Microsoft would like a word.
The Redmond tech giant, which has probably gamed out the back-to-office challenge as carefully as any organization, says the stream of workers coming back to its own offices has grown steadily since April 4, when the company began requiring work to be in person at least 50% of the time unless employees have permission from their managers.
“We can watch things like badging data, and it continues to go up for us,” says Jared Spataro, Microsoft’s corporate vice president of modern work, who advises CEO Satya Nadella on hybrid work strategy. The company had roughly 57,000 employees in Redmond, Bellevue and Seattle in 2021.
Still, Microsoft won’t say exactly how close it is to hitting its back-to-office goals, other than to warn that it’s probably not imminent. To the contrary, Spataro says it could be six to nine months — early 2023, in other words — before Microsoft has a clear idea what a post-pandemic workplace “equilibrium” looks like. He also thinks many other office-based employers face a similar wait, despite some forecasts of a back-to-office surge by fall.
One factor: Microsoft thinks employees with kids will need to get through several months of the 2022-23 school year before they can settle into “a predictable rhythm of work patterns,” Spataro says.
“I don’t think summer will give us a good view,” he added.
As important, even employers convinced that productivity has suffered under remote work may need more time selling that rationale to workers who think the pandemic proved otherwise.
Workers “are not the same people they were two and a half years ago,” Spataro said. “They don’t buy the argument that they can’t have any flexibility.”
Microsoft’s ultracautious approach fits with its well-known obsession with measuring everything. But it also reflects the slower-than-expected pace of the broader back-to-office trend, which has seen office occupancy stuck under 45% for months, according to one widely watched tracking website. And office workers expect to spend an average of 2.7 days a week in the office, according to a recent survey by a commercial real estate company.
As important, Microsoft’s go-slow approach jibes with its fears of losing high-skilled employees to more flexible rivals or of being unable to hire enough new workers to keep pace with its booming sales — in, among other things, remote-work technologies.
In May, Microsoft said it was boosting salaries and stock compensation as part of retention efforts.
But the impacts of Microsoft’s go-slow back-to-office strategy go well beyond its own offices. Since the start of the pandemic, many other employers have taken their cues from Microsoft’s cautious approach to the office and likely will be watching closely as the company stages its long-awaited return.
Microsoft’s success or failure over the next six to nine months “could set a precedent,” says economist Hart Hodges, co-director of the Center for Economic and Business Research at Western Washington University. And central to that outcome, he says, is how effectively Microsoft can internally “market or ‘sell’ the need for workers to return.”
Selling the office is clearly key to Microsoft’s hybrid work strategy.
The company has been quick to supply its employees with copious research data on the complicated impacts of remote work. That includes a massive study by Microsoft researchers, published last fall in the journal Nature Human Behavior, suggesting that remote work’s blunting effects on collaboration and communication could “impact productivity and, in the long-term, innovation.”
Despite that data-driven certainty, however, Microsoft is taking something of a soft approach that minimizes top-down dictates and emphasizes the evolving, bottom-up nature of its actual hybrid strategy.
Although the company sets the strategy’s broad outlines, day-to-day details are left to managers and workers, Microsoft says.
Flexibility is the watchword. Managers and workers will be allowed to figure out where workers do their best “focused” work, though Microsoft will provide managers with training and tools to handle that complicated task. Geography is no longer as important: Workers hired remotely from other locations may be allowed to stay remote, a shift that has “allowed us to tap into new labor markets in ways that we haven’t been able to previously,” Spataro says.
Microsoft is also leaning on existing internal norms and performance metrics that reward collective behavior. For example, Microsoft has found that more recent hires are more eager to be the office to network and learn “the culture and the feel of this new organization,” Spataro says. That in turn has allowed Microsoft to push other employees by saying, “We need … you in [the office] so that we can create that” culture, Spataro says.
But the pandemic has also highlighted the limits of conventional corporate norms, not least around what Microsoft employees call “the deal,” or employment terms. Although salary and other financial compensation is a key part of that deal, workplace flexibility is growing in importance, Spataro says. “How, when and where you work … is going to be a permanent feature of the labor market going forward.”
Spataro thinks Microsoft has a good sense of what that new deal needs to be, and that the mix of broad corporate goals and street-level flexibility can hold onto their talent. “We’ve already seen the labor market respond well to that,” he says.
That optimism is shared by many business observers, for now. Hodges thinks Microsoft’s emphasis on productivity and flexibility probably gives it an edge in getting people back, and could “provide a road map for other firms.”
If Microsoft loses workers or has to adjust its goals, other companies may shift their own strategies, Hodges says.
But if Microsoft can reach its 50% goal without losing a lot of talent or slowing its hiring, Hodges says, “I think others will follow.”
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