The office vs. everyone else
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Yesterday on Today Explained, we were in Portugal, where digital nomads are living the dream. Today, we're off to Miami, where people are surprisingly not at the beach. More than most other big American cities, they're back at the office, if they ever left at all. How often are you in the office here? Miami is five days a week in office. Five. Five? Yeah. Four days right now. Before it was five, actually, yeah. But it seems like the less hybrid you are...

the less happy you are. I like the hybrid. I'm a mom, you know, and so things happen around the house. It's not like I need someone to be babysitting for me, you know, if I'm doing my work or not. Amazon just ordered its people back to the office. Apple, JP Morgan, Chipotle, Disney, IBM, Tesla, and even Zoom have brought people back too. Companies want to get back to the pre-pandemic life. We're going to try and figure out if it'll work on Today Explained.

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We talked to tons of white-collar workers in Miami. All of them spent at least some time in an office, some by choice, some because they had to. But we especially wanted to talk to someone at the hedge fund Citadel because they recently moved to Miami and are super proud of their five-day in-office policy.

This floor is a lot fancier than the one I won. And people like software engineer Hasan Altaf are actually into it.

I think personally, I like in office a lot better than being at home. I think it definitely lends itself towards more creativity, collaboration. I think that I'm learning a lot more right now, being in the office and being at home. I'm getting a lot more done, to be honest with you. Hasan is young. Like, he finished college 10 minutes ago young. Did you tell me how old you are? How old are you? I'm 22. 22? Oh my god.

22? And Citadel is providing an easy transition out of college life. They're serving him breakfast and lunch, just like in a dining hall. They give you food so you don't go out, though. You know that, right? I mean, I'm still grateful. It's good food.

They've got lots of young people to fraternize with, just like campus, and they've got gear. I mean, my setup at the office is amazing. They have me with three monitors, really big TV-like thing, you know, a nice keyboard, desk that goes up and down, the one at home, not as nice. It's

It's a little monitor type of thing. I don't think I work as effectively at home. There's too many distractions. The bed is right there. You taking naps? I'm not trying to take naps if I do work from home, obviously. But I think in office, it's just creativity, collaboration, everything. The juices are flowing here. It's clear that he's stoked to be at the office because he's a kid, fresh out of college, eager to discover what it's like to have a real job. I guess I'm young, like...

It's really easy to get to and from the office. We're right beside the Metro Movers station. It's not a hassle. It's something that I think serves me well in my career and helps me grow a lot faster and increases my learning exponentially, which I don't think would be the same if I worked remotely or even hybrid. Do you think your work is better because you're here? 100%. There's no doubt about it. But when I look back at my first internship, that was during COVID. I was an eight-month internship all through COVID.

Honestly, when I was done with my tasks for the day, I was done for the day. I felt kind of disconnected with my team, as in they were just like faces on a screen. I never met them in person. I didn't really feel mission-oriented or fulfilled for my work. And I think as someone that wants to grow in my career and wants to grow as an engineer, as a leader, as a team member, I want to derive a sense of fulfillment for my work. And being remote just didn't provide that.

It's no surprise that this is the employee Citadel wanted us to talk to. Not a single mom who's struggling to balance a five-day in-office policy with supervising a kid on summer vacation, but a rock star software engineer who is super on board with the company policy. But they did let us talk to their chief people officer. You know, like the head of HR. One of the people behind Citadel's financials.

five-day-in-office policy. My name's Alex DiLeonardo, and I'm the chief people officer at Citadel Securities. We spoke to Alex in a dreamy meeting room with sprawling views of downtown Miami and Biscayne Bay. Yeah, it's great, and I think it actually represents all of what Miami has to offer to individuals making their career here. You have the beach out of one side, and you have the beach out of the other.

And you have our skyline out of the other. Alex is unsurprisingly bullish on Citadel's five days a week in office policy. I think people are actually opting in to work in this culture. So I wouldn't think of it as, oh, they're making a compromise to come to the office. I think they're actually excited about the opportunity to do so. You generally think that people are excited to come in five days a week. They don't they don't wish for one day Fridays, let's say Mondays from home.

Individuals that I interview when they're on their way into this organization, some of them are coming from organizations where they do have a less in-office work standard. I think those individuals, one of the reasons they're excited about this organization is to come here, collaborate with people from other teams, move ideas forward at pace, and again, really perform at what they believe their highest level is. I think we're very clear on our culture, and I think people are then opting into that culture

Yeah. So it sounds like what you're saying is Citadel believes that the work is better when performed in person at the office. Absolutely. Individuals come here to have the best shot at the best career they could have in their life. And if you survey knowledge workers, and there's much public data on this, they say the most important thing in the value proposition that they expect from their

employer is the ability to learn. And we believe that learning happens best in person. If you look at the history of universities, they've largely been in person. So it, you know, the corollary of that is that individuals would come in person to the workplace to have their best shot at learning and developing their careers.

We spoke to a guy who works at Coinbase yesterday, and he was sort of comparing the crypto culture with the sort of more traditional finance. I hope that's not pejorative culture here in Miami and other cities, and how Coinbase crypto is totally flexible, totally hybrid. And maybe you guys and other more traditional banks, let's say, are more in-office people.

four or five days a week. And he thinks, he posited that as these boundaries between crypto and hedge funds and venture capital and traditional finance, whatever it is, continue to blur, that we'll end up in a more hybrid place across the board. Do you think five, 10 years down the road, everyone's going to end up being hybrid?

Yeah. Well, so, you know, as somebody who spent my entire career in the people space, I think it's great that all of these different forms of working are causing organizations and societies to ask questions about how best to enable individuals to succeed in their different roles and their different careers. I think, let me just say that, that I think that's wonderful that we're asking those questions.

But I also think that leaves a ton of room for organizations to choose the kind of environment that they provide and be very clear in sort of the social contract, the agreement with the colleague about what it means to work at this individual company. It creates a whole spectrum on which to play. So I don't necessarily think that all of these questions mean that every organization is going to end up crowded around one data point on that spectrum. I think it's great that we now have opportunities

options and individuals who care about and are optimizing different things can choose among those options. But I think we as an organization throughout our history have been very clear about the importance of in-office collaboration and what it means to our values and the performance and overall success of our colleagues. And I expect that we'll continue to kind of be focused on those themes. Citadel says to hell with your hybrid work policies, but we're going to ask if their bet on in-person work is going to pay off when we return on Today Explained.

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Today, Explain is back. We've been to Portugal. We've been to Miami. We've hung out in downtowns and co-working spaces. But it's time we get schooled. So we went to Nick Bloom, professor of economics at Stanford University, to find out how the pandemic has become permanent when it comes to work. And to find out where we're heading. Everything hybrid, increasingly nomad, back to the office. Which of these really works best?

I mean, the first thing is we're all very different in what we like. Think of it kind of like the office air conditioning. Some people like it hot, some like it cold, some don't appear to express any opinion. Just in the data we have surveyed about 100,000 Americans by now, you find that about 20% of people actually want to go in every day. I come in almost every day because I like being able to work around people and interacting with folks.

I find it much more productive. They say, you know, it's more social. I find it easier to learn and get mentored. I just think since I'm starting, the hands-on experience is very helpful. And maybe my apartment isn't great. I'm sharing it with four other people and I don't want to work in my bedroom and there's nowhere else.

There's 30% that the complete opposite. They want to work from home every day. Normally, when you talk to them, they'll say, "I have a massive commute. I want to see friends, family. I know how to do my job. I just waste time at the office and I'm just being bothered all the time." The thing is, I can't complete 100% of my work from home because I'm not seeing clients right now. If there's a need for me to be here in the office, I will for sure be here.

If they don't require that, why wouldn't I be able to work from home, you know, if I have everything that I need? And then there's around 50%, which actually probably includes me, that kind of feels like hybrid's what they want. They want to come in some days and work from home some other day. So there is enormous variation for individuals and managers. It makes this thing actually, you know, a nightmare. It's just very hard to navigate. We asked Nick what exactly the American workforce even looks like in the back half of 2024. Yeah.

So there are about 60% of Americans going every day. There's around 100 million people. It's the most common group. Next most common is folks that are hybrid. That's around 30%. So that's around another kind of 50 million. And then the remaining are fully remote. Most fully remote workers...

There's a lot of them in a call centers, data entry, tech, some journalists and some writers. They're in some ways the most disparate group. They're kind of all over the place. Hybrid workers tend to be a lot of managers, professionals, and then fully in-person jobs tend to be not always, but they're mostly lower paid. So think of, you know, food service, transport, accommodation. But there are some people like pilots, surgeons, very highly paid jobs, traders,

There's a bunch of traders on Wall Street. They need to use very fast computers, be right next to the exchange. You can't do that from home. I mean, there's also security issues. I've talked to companies where they say, look, we're dealing with health, confidential health data or financial data. We can't work from home. Sean, I'll answer another question, actually. There's a really interesting point on productivity is

which is, it's not obvious that firms should look at productivity, but they should maybe think more about profitability. So to explain why this is different,

If you look at fully remote workers, imagine you're a manager and you think, hey, look, these folks aren't as productive because they're fully remote. Imagine you think they're maybe 10% less productive. Initially, the knee-jerk reaction is haul them back into the office. But you should pause a minute and think, well, look, how much do they cost? Because it turns out that if you don't have an office, you typically save about 10% on costs.

It also turns out if you're hiring folks remotely, you can hire a lot better employee for your money because you're not looking locally, you're looking nationally or even globally. Numbers suggest that maybe fully remote employees can save 20%, 30% on your wage bill. What I often find when I talk to companies is they'll say,

You know what? The real thing is profits. If we want to really think about the remote decision, we really got to think about what is the most bang for the buck. It turns out often fully remote workers are actually extremely cost efficient. Turns out hybrid is here to stay. If you look at the numbers, before the pandemic is very low. As a share of days, about 5% of days in the US were fully work from home. It happened, but it's pretty rare.

peak of the pandemic, they went to 60%. Basically, anyone that could work from home was doing it, and they were doing it full time. This is kind of April 2020. Now it's fallen to about 25%, but it's been flat since the beginning of 2023. It's the last almost two years

We've not seen any particular movement back to the office. You know, it feels like there has been, if you read the media, Google, Walmart, even Zoom. Amazon wants its corporate workers back in the office full time starting next year. But it just turns out in big data for every, you know, one of those companies, there's a bunch of others that there's office leases expired and they say, look, it's a lot cheaper to get rid of the office and work from home. So we're now kind of stable. This is the new normal. You know, I repeatedly tell managers, execs, employees,

Look around where we are now in kind of fall 2024. This is where we'll probably be 25, 26, 27. In about five, 10 years, when I'm looking into the future, we'll probably be doing more working from home just because the technology is going to get so much better. So I live out in Silicon Valley and I meet companies designing amazing holograms like out of Star Wars or things called portals, which are 12 by 12 foot screens for...

video calls or virtual reality, incredible stuff. And it's not here now, but there are people investing millions into it. Five, 10 years, it will be. And we're not never going to meet in person. It's just going to be a little bit more remote than it is now. I will say, Nick, if you're consulting these companies, let them know I work hybrid. However, if you made me have a hologram of my coworker in my house, I would just go into the office. Let them know.

Forget it. No more beaming. This time I'm going to walk. I'm curious. So it feels like you're saying companies are realizing they can make more money if they go hybrid because they don't need to pay for commercial real estate. Does that also mean that they're not worried about employee productivity, at least on these, you know, in these laptop jobs where you can be doing them from Jakarta? Great question. So it's a tradeoff.

I was actually involved in a very nerdy, very scientific study on hybrid. Weirdly enough, the current chairman and original founder of a company called Trip.com, they're a big NASDAQ listed and a massive tech firm, was in my class at Stanford 15 years ago. I stayed in contact and I know their current CEO, Jane Sun. They ran a massive experiment. What they did,

is they took 1,600 managers, professionals, coders, accounts, finance folks, and they're all at that time coming in the office five days a week. And they said, look, we want to try out hybrid. So 800 of them, those that happened to have odd birthdays, so if you've gone on the first, third, fifth, seventh of the month, were allowed to work from home on Wednesday and Friday. And the rest of the group came in every day.

And we studied them for up to two years. And what you found is there was just no effect on performance, no effect on promotions, no effect on lines of code written, no effect on leadership scores, innovation scores, anything you could look at. And when you interviewed them, they said,

Well, look, you're right. If we only come in the office three days a week, there is a little bit less face time. There's maybe a little bit less meeting and culture, although generally the firm is better at making sure all the key things happen on those three days. They said, but on the other two days a week, we're at home.

It's been great because it's a lot quieter for me at home so I can think and study and it's good for deep work. And also I'm saving almost an hour and a half a day on extra commuting. And sure, some of that I used to go to the gym when I see my kids, but some of that I'm actually using to work more.

And in fact, in something you just put out, you also see folks tend to take shorter breaks at home. Like in the office, you take an hour for lunch. But at home, you know, go and make yourself noodles, maybe eat them over the keyboard or, you know, whatever. But it's taking 15, 20 minutes. So it turns out it's true. And it's pathetic. Yeah, I know. My achy is I was just saying something over the weekend. My achy kind of crunches in the space bar kind of stick. So I think that's too many work from home lunches.

But, you know, it all tells you that,

hybrid at least, doesn't seem to damage productivity. What it does do for firms is it dramatically reduces quit rates, which saves them a huge amount of money on recruitment and retention. It's interesting to hear your data from Trip.com because the producer of this show, Victoria Chamberlain, and I took these trips to Portugal and Miami, and especially Miami, where we met a lot of people who are back in the office for five days a week. You heard them saying, you know, I like the hybrid. Do you think there's some companies out there that just...

aren't getting the memo here that there's not a great loss of productivity? What do you think it is that's keeping companies with a four to five day in-office policy? It's a good question. So take Amazon. They literally just announced in the last couple of weeks about having folks come back five days a week. Why is that? Why was three days a week not enough for Amazon?

There's a range of potential explanations. One explanation is, look, it wasn't very well organized. They didn't come in on the same three days. If you come in Monday, Tuesday, your Wednesday, Thursday, Friday, then that doesn't really feel that great. You come into the office and it's half empty and you're all on Zoom calls.

That's a management issue. It may be also, you most typically see RT at return to office announcements from public listed companies when they've not been doing very well recently or when they're about to release other bad news. It's like the classic scapegoat. It's like the CEO says, give me please another six months or a year. It's these work from home stuff, it's messing it up.

It doesn't fit. Amazon's actually been doing pretty well recently. It's not perfect. So I'm honestly a bit perplexed. You know, one way this plays out is they have a ton of quits. They find it harder to hire. I mean, I know from talking to my own undergrads and MBAs, they don't want to go in five days a week. So it's going to be harder to hire them.

They may reverse course to three. Amazon is a lot like the river itself. Their policy on work from home has changed direction about 10 times. So this may not be the final twist in this story.

Speaking not only to an employee of Citadel, but also to an executive at Citadel, their chief people officer, they really seem to be pushing this narrative that this is just our culture. Our culture is one where people come in to learn and learning happens best, just like at a university in person.

You studied this professionally. You've seen the writing on the wall. Do you think it's just a matter of time or do you think in five, 10 years, we'll still see companies like Citadel, maybe like Amazon, maybe like Bank of America who are demanding their employees be in office five days a week?

So it's definitely true a chunk of learning happens best in person. So I'm a professor at university. You know, I kind of teach for a living. And for sure, online class was horrible. So I'm never going back to that. And I did, you know, I did while it was necessary. But as soon as we were allowed back in person, I was like, I'm back in the classroom. But as a teacher, if folks have to do reading for their class or write an essay, that's probably better done at home because it's quiet.

So imagine you're a professor, and at one extreme, I say students have to stay in the classroom from 8:00 AM to 5:00 PM every day. They have to do their reading, writing. It's a noisy environment. That's not ideal. At the other extreme, you never meet in person is not ideal either.

Generally, innovation, learning, a lot of these activities are best done in a mix of some in-person and some quiet time. Citadel, I totally agree that you want some in-person time. I'm skeptical you need all five days. I suspect, for example, if folks came in four days a week, that may be enough. Let them work from home on Fridays. Let them have that as quiet, a reflection, deep work type time. It's their company, so they're free to choose.

Nick Bloom is an econ professor at Stanford University. That's what you call it when your A-key is sticky from too many work-from-home lunches. Sometimes it's like, geez, how did people do this before COVID every day and not even complain or anything, you know? Oh, they complained. Yeah, I'm sure they did. But there was no other option, you know what I mean? Now it's like, it's impossible to make people do it. And really, if you don't want to do it and a company makes you, you can just leave and go to another company that doesn't mandate it.

Victoria Chamberlain produced today's show. Jolie Myers edited. Laura Bullard fact us up. Patrick Boyd mixed with an assist from Andrea Christenstatter. And we had help from our executive producer, Miranda Kennedy. The rest of our team includes Halima Shah, Avishai Artsy, Hadi Mawagdi, Amanda Llewellyn, Miles Bryan, Peter Balanon-Rosen, and Rob Byers.

Our supervising editors are Amina Alsadi and Matthew Collette. Noelle King is my co-host. Breakmaster Cylinder is our remote worker. Today Explained is distributed by WNYC. The show is a part of Vox. I was having a mini panic attack. I was at F-U-C-K. It's friggin' Sunday. What the hell? Where did the weekend go? ♪

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and more, making every moment count. Klaviyo says that over 150,000 brands trust their unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and even beyond. You can make every moment count with Klaviyo. Learn more at klaviyo.com.