Weighing the Hidden Costs and Benefits of WFH — Nadella Is Asking The Right Questions

wfh-nadella-hidden-costs-of-wfh

By Brooks Holtom, PhD and David Niu, CEO of TINYpulse

When COVID-19 took hold in the U.S. and 42 states and territories issued mandatory stay-at-home orders, we commenced a massive work from home (WFH) experiment. In the short term, the benefits were obvious: employees working from home were safer, they saved time and money by not commuting, and many organizations were pleasantly surprised to find productivity did not suffer as much as they feared. However, some leaders wondered about the hidden costs. Specifically, Satya Nadella, CEO of Microsoft, shared,  

[R]aw productivity stats for many of Microsoft’s workers have gone up, but that isn’t something to “overcelebrate.” More meetings start and end on time, but what I miss is when you walk into a physical meeting, you are talking to the person that is next to you, you’re able to connect with them for the two minutes before and after. That’s tough to replicate virtually, as are other soft skills crucial to managing and mentoring...One of the things I feel is, hey, maybe we are burning some of the social capital we built up in this phase where we are all working remote. What’s the measure for that?

However, while Nadella and others have expressed concern about the erosion of social capital, little evidence has been published. For this reason, we sought to examine behavioral data to see if employees are reaching out in support of their coworkers more or less during this period. 

Using the TINYpulse Cheers for Peers platform, which enables employees and managers to give recognition to each other, we examined more than 100 American organizations that were clients in the same Q2-Q3 time periods of 2019 and 2020. This is what the data showed:

  • Cheers per Employee (CPE) dropped 20% YoY with September experiencing an even steeper drop of -28% YoY. The monthly peer-to-peer recognition rate was pretty consistent from April through September of 2019. However, it was dramatically reduced in the same six month time period in 2020.
  • Despite lower CPE rates in 2020, the quality of Cheers given in 2020 improved by 13%. Quality was measured by how many words per Cheers, and YoY saw an average jump of 13% in 2020.
  • Company values matter more than ever with a 49% spike of Cheers tagged with at least one company value. When providing peer to peer recognition, the sender can opt to tag company value(s). The rate of including at least one company value shot up 49% YoY, which may point to employees’ desire to reinforce their company’s shared culture.

In short, we saw a dramatic decline in the number of CPE. However, the quality of Cheers and the number of people referencing cultural values went up. 

As employees work from home, we believe their need for recognition likely is unchanged or possibly higher than when they are in the office and able to communicate thanks and recognition more easily. Thus, the reduction in recognition giving is concerning. It is possible it declined because people could not as easily observe coworker performance and actions in-person. 

But employees and managers may also be experiencing burnout and have less energy and time to provide kudos to their peers. Our Cheers data suggests Nadella was prescient when weighing the potential social capital impacts of working from home permanently. 

 

 

 

Conclusion

It seems the initial burst of benefits of working from home may fade over time. Now, we are starting to recognize the drawbacks from shifting from 100% in office to 100% work from home. The data highlights the potential for burnout and the risk of diminished social capital. This warrants further research as many companies are still working from home and weighing options moving forward.

Recently Microsoft announced it is hedging its bets by allowing people to opt in to working from home and generally only part of the time. Kathleen Hogan, Chief People Officer, noted, “We have also communicated that we are not committing to having every employee work from anywhere, as we believe there is value in employees being together in the workplace.”

If you’re encountering a similar situation, we recommend:

  1. Invest in employee recognition and lead by example. The research is overwhelming that people who regularly practice gratitude and recognize their peers feel more positive emotions, sleep better, and even have stronger immune systems. Peer recognition has dropped by 20% YoY, but this trend can be reversed, and it starts at the top. Challenge yourself to start your day with positivity by setting aside time to give three Cheers to your hard working team. And in turn, have your direct reports cascade down motivation.

  2. Highlight and reinforce company values. With so much change and uncertainty in the world right now, provide your team a foundation they can rely on, which are your company values. Blend this in with other key activities like team meetings, 1-on-1’s, and recognition, which has seen a 49% YoY jump in Cheers tagged with a company value. 

  3. Ask the hard questions and measure long-term. Like Nadella, don’t get swayed by short-term trends. Measure how your team is performing attitudinally and behaviorally long-term, so you can make the best decisions for your organization while balancing the hidden costs and benefits of WFH. 

Background

TINYpulse provides an employee engagement solution to help leaders quickly get the pulse of how their people are feeling so they avoid getting blindsided by taking proactive actions. Cheers for Peers is the peer-to-peer recognition portion of TINYpulse that positively impacts employee engagement.

We partnered with Dr. Brooks Holtom to help our clients better understand how the work from home trend is impacting employee recognition. Cheers to Nguyen Duong for the amazing data pulls, which are the foundation for this unique research.

In total, we analyzed 100+ U.S.-based organizations and evaluated their Cheers for Peers behavior from April - September 2019 and 2020.

For more information, please contact brooks.holtom@georgetown.edu or david@tinypulse.com.

David Niu

David Niu

October 15, 2020

 

 

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