UPDATE:
The results are in! We dive into an analysis of what we’ve heard from you on the future of work, and whether it will be fully remote, on-site, or something in between.

We’d love to know how satisfied you are with your current job. Please spend just two short minutes answering our anonymous work satisfaction survey. We will share our findings in our next newsletter!

“It’s time to admit that remote work doesn’t work. WFH Friday is a four-day work week. Full WFH is a two-day workweek. When people are not in the office, every interaction has to be planned in advance. And that means a lot of information-sharing doesn’t happen. Remote is a great lifestyle, not a way to build a great company”

- David Sacks former PayPal Holdings Inc. executive and founder of Yammer, which was acquired by Microsoft Corp. in 2012 for $1.2 billion

Strong statements against remote work, like the one above, have become common in 2023. For the past year leading tech companies have stopped asking and begun mandating their employees to return on-site. 

What’s striking though is that these same companies resisting fully-remote work, are also the ones that create the core tools for remote workers across all industries. In other words, the companies that enabled remote work around the globe, it seems, no longer believe in it themselves.

Personally, over the years I have experience running games studios as fully on-site, remote, and hybrid. I’ve benefitted from the ability to hire experts remotely. And I’ve endured the pitfalls of misalignment and mental health caused by the communication challenges with remote employees.

But this analysis is not about my anecdotal experience. Instead, I want to present the pros and cons of remote work while trying to answer why nearly all of the leading tech companies are strongly advocating against a fully remote setup. 

If you don’t agree with my conclusions or have a conflicting point of view, don’t be shy. Hit me up on Linkedin or the Deconstructor of Fun Slack channel. Or even better, write your own analysis and have it published in this newsletter. 

Most importantly though, make sure to answer this short anonymous job satisfaction survey. We’ll share the insights the next week. 

Remote workers are increasingly less productive, anxious, depressed, and lonely 

“Why were all these smart people fooled? Partly I think because remote work does work initially if you start with a system already healthy from in-person work…and partly because it seemed to solve recruiting, which is always a bottleneck”

-Paul Graham, co-founder of Y Combinator on why some company leaders have soured on remote work after embracing it.

It’s very easy to rationalize the boom of remote work because it does offer many benefits to both individuals and the company:

• You can recruit people from more locations. The best/right talent may not happen to be living nearby or be willing to relocate, especially if your office is not set in an industry hub, especially if your office is not set in an industry hub. This is fairly important because most, if not all, companies need help recruiting senior talent.

• Remote work is employee-friendly due to the lack of commuting required and was noted to raise the level of disabled employment to all-time highs and thus reducing employment inequality.

• It is also cost-effective as you don’t need to have a physical office and you don’t have to compete with a local salary to get the talent living in high-cost cities. On the flip side, you can offer a much higher “international” salary to remote employees who live outside the expensive coastal cities. 

• Remote work can be more productive as employees can focus during the day instead of being distracted by conversations, spending time on long lunches and extended coffee breaks, or grueling hours commuting.

While the arguments for remote work are logical, they are beginning to be countered by both scientific and anecdotal data. 

A study earlier this month by researchers from the Australian National University, University of Newcastle and Macquarie University found not only was the average worker less productive at home, but they were also more anxious, depressed, and lonely. The research, which is not yet peer-reviewed, was based on 2400 employee responses across five surveys between 2021 and 2022.

Furthermore, according to The Australian Financial Review, the study found that each additional day an employee working from home led to a corresponding deterioration in productivity, efficacy, turnover intentions, depression, anxiety, and loneliness.

Given the happiness hybrid workers receive from having more control over their own life, you’d assume that those working from home must be happy as a clam. Yet, job satisfaction among fully remote workers was noticeably lower compared to their hybrid peers.

Here are five key insights about remote workers based on Current data:

1. Job happiness is strongly tied to age. Young remote workers continue to be the most dissatisfied with their jobs (as seen in the February 2022 report). Current data show that 62% of Gen Z adults (18-24) and 49% of young Millennials (25-34) working remotely are unhappy in their jobs, with fully remote workers more unhappy than hybrid workers. Conversely, 80% of Baby Boomers (55+) working remotely are happy in their jobs and just 20% are unhappy.

2. Remote workers report a worse work/life balance. For example, they are less likely to call off sick from work.

3. They are more concerned about their employment – they’re more concerned with being laid off in the coming months and express greater concern in general about their jobs.

4. They are more likely to feel that they do not belong to a social group.

5. Financially, remote workers are more likely to be better off than before the pandemic, compared to in-person workers. 

What do remote workers want?

“Our hypothesis is that it is still easier to build trust in person and that those relationships help us work more effectively. I encourage all of you to find more opportunities to work with your colleagues in person.”

-Mark Zuckerberg, CEO of Meta in a March blog post

Recent poll results hint at what might increase job satisfaction for remote workers. Among those currently job searching or planning to search for a new job, 39% of remote workers are driven first and foremost by income. 

Interestingly, 1-in-5 remote workers say heightened job flexibility is their top reason for pursuing a new position. Also, remote workers are nearly four times more likely than in-person workers to want greater job security, but less likely to be motivated by job benefits and career growth.

The data points above can lead to a hypothesis that remote workers desire more job security because, without strong in-person connections, it's easy to imagine becoming a layoff statistic.  If we don’t get the chance to regularly meet face-to-face with our peers and managers at the office we are likely at risk of overanalyzing every word said by over a video call or a Slack message. 

To continue with the hypothesis, we can assume that cumulating anxiety bleeds into poor work-life balance as remote employees attempt to work harder to increase their job security. This can backfire in collaborative industries. A self-guided individual may get more done, but unless their work is asynchronous, there’s a  risk that they are not helping the rest of the team but rather pushing them in the wrong direction. 

And as their misguided extra effort fails, the anxiety around job security only ramps up leading these remote employees to see new remote workplaces where the same doom loop will likely continue…

The problem with remote work

“Working isn’t just about personal productivity — it’s about being a team player and helping to raise the performance of others. I can understand the employee’s perspective, but I think it’s lacking something critical: It’s not just about you. What do I mean by that? You might be able to execute your work on time and to standard in a remote environment. But what about your colleagues? Absent your presence, leadership, mentorship—can they thrive?”

-Jake Wood, CEO of corporate philanthropy company Groundswell

The issue is that people very often lack the ability to see the challenges of remote working, and over-focus on the advantages of working from home brings to them on an individual level. 

It seems very easy to focus on what works best for me - not what works best for my team, the project, or the company. While in a management position, it seems to be easier to see the challenges related to company culture, lack of communication, or even miscommunication that may lead to frustration and overall poor performance.

1. The challenges in communication arise when all discussion is done on message boards and video conferences. A written word from an avatar is not the same thing as a discussion face-to-face. Lack of human interaction easily leads to a loss of nuance, which is vital in how we as a species communicate.

2. The organization will be missing out on ad hoc conversations between co-workers at the coffee corner or during lunch breaks, or even just bypassing each other in the hallway. This is bound to make the company less creative.

3. Companies also don’t like to mention the lack of loyalty that comes from having people in a remote setup. Remote workers are more motivated by pay increases than hybrid or onsite workers, which paired with a lack of team acculturation is a recipe for hiring job hoppers. While it may be much faster to fill positions with remote workers, it could also form a leakier pipeline.

4. Hiring the best people from different countries and paying people in many countries becomes a tax and legal nightmare. While hiring from other countries could help lower the average salary paid, often the middlemen services that distribute this payment take very high fees which reduce this profit margin by up to half.

5. Remote work burns people out more and is in general more stressful because it is harder to onboard people, teach new processes, and have effective knowledge sharing. We can see this in the data that kicked off this analysis. Remote workers are often unhappier than their hybrid peers.

6. We’ve also seen that despite the increase in an individual working remotely the overall team tends to get slower, more disorganized, and less creative when more people are working remotely. This has been evident in our industry with the vast majority of new games missing deadlines and quality standards. 

7. Most importantly though, it is very unlikely that you can build and maintain an engaging and outstanding company culture with people in a remote setup. Focus on empowerment, clarity, efficiency, and work-life balance are simply the ways of working that are the result of remote setup. 

In the end, it’s never black and white. There are different profiles of performers who are worse or better off in remote situations. For example, folks early in their careers are likely to miss out on skill development and building out their professional network as well as their social capital without exposure to people in offices.

There are a lot of articles written on how to bring this back for remote companies with online events, flying in remote workers for offsites, team whiteboard sessions, or happy hours (none of which are free, by the way…). But based on the initiatives of leading tech companies the best way for a company to foster creativity is to bring their employees back on-site. 

The Future, for most of us, is Hybrid 

“I think definitely one of the tech industry’s worst mistakes in a long time was that everybody could go full remote forever, and startups didn’t need to be together in person and, you know, there was going to be no loss of creativity. I would say that the experiment on that is over."

Sam Altman, CEO of OpenAI who previously led the prestigious Y Combinator  

During the market boom, companies were cautious to demand their employees to return back on-site due to the fear of employees leaving to work for a company that allows full remote work. The management was worried that their attempts to correct the issues on-set by mandated remote work were seen as a lack of trust towards employees working from home.

But that was before the recession, inflation, and subsequent interest rate hikes. Now the ball is back in the employers' court and they will do what they see most useful for the company's overall good instead of maximizing the benefits of individual employees. 

But then again, on an individual level, things are never that simple. A remote worker may have moved to another city, taken a mortgage, and begun setting roots in the local community. Given the difficult economic situation of high-interest rates and a broken housing market, relocation for many individuals may be simply impossible.

Individuals who cannot choose to return to a hybrid setup at their company could always make a case for an exception if their performance while remote has been commendable, or seek remote work jobs at companies that place remote setups as a key part of their strategy. 

While most of the big tech companies are leading the way by mandating their employees to work a certain amount of days from the office, companies like Epic seem to have doubled down on remote work. This could give them and many smaller companies an edge on the talent front - assuming they can negate the vast negative effects of remote work.

In practice, this means that your manager makes your job suitable for working from home — provides you with support, makes sure there isn’t conflict and there’s lots of coordination with co-workers — then those adverse effects start to go away. And presumably, they could go away entirely if an organization handled it well enough. After all, many of the large tech companies are so distributed these days that even if you're in the office, you're getting on the video to meet anyone. The walk across the campus is already 15 minutes.

In the end, remote or on-site work shouldn’t be a partisan issue. The best way of working for any studio is the one that maximizes the success of its products and services. 

If the performance of the studio is at its peak with teams being mostly on-site, then the leadership and the team have to bite the bullet and move into this model - even if it means losing some people who refuse to follow. The same goes the other way around if a studio has unlocked access to key talent or adopted lower-cost operations by leveraging a remote-first work environment successfully

Finally, remember that as a leader, you have to set an example. If you want your team back on site, you have to make sure the leadership and the management are on site first.   

Michail Katkoff 

Ps: special thanks to Tiffany Keller for challenging and giving a much-needed perspective