The Economist: Is company culture suffering or thriving in remote work?

Key topics:Office mandates boost agility but hurt supportiveness and leadership.Remote work improves work-life balance but may reduce spontaneity.Culture impact depends on whether firms value agility or employee care..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here.From The Economist, published under licence. The original article can be found on www.economist.com© 2025 The Economist Newspaper Limited. All rights reserved.The Economist.“This isn’t just about productivity metrics,” Dara Khosrowshahi, the boss of Uber, told employees recently, after the ride-hailing company said they should all work from the office at least three days a week. “It’s about building the culture that will drive Uber’s next phase of growth.” Mr Khosrowshahi is not the only boss to appeal to such fuzzy ideas while herding workers back through the turnstiles. In January staff at Amazon were required to return to the pre-pandemic norm of working five days a week from the office. “People riff on top of one another’s ideas better when they’re together,” Andy Jassy, Amazon’s chief executive, told the Harvard Business Review when asked about the policy.Although company culture can be a slippery concept, executives are right to worry about it. Research suggests that a company’s values and norms, including those governing how employees work, behave and interact, can affect innovation, profitability and stockmarket returns. But does forcing people into the office improve a company’s culture? Our analysis suggests that the answer may depend on the type that a firm is trying to instil.Bosses, by and large, claim that having people in the office full time is a cultural boon. The spontaneity that often leads to new ideas is lost when employees work from home. Collaboration suffers, too. A study of 61,000 Microsoft employees found that remote working in the first half of 2020 made the tech giant more “siloed” and less “dynamic”. It is also hard to integrate new staff when their colleagues are not there to help them settle in.However, virtually all employees say they would prefer to do at least some work at home. Mark Ma of the University of Pittsburgh and his colleagues found that companies that insisted on workers returning to the office after the pandemic saw employees’ job satisfaction fall and turnover rise - with no improvement in company performance.To assess the link between companies’ working policies and their culture, we turned first to CultureX, a research firm run by Don and Charlie Sull, a father-and-son team. CultureX supplied us with a database of nine corporate-culture indicators across some 900 firms, constructed using feedback on Glassdoor, a workplace-review website. (You can explore the data here.) Our second source was Work Forward, an advisory firm which publishes the Flex Index, a database tracking the remote-work policies of more than 13,000 employers. It sorts companies into three categories - full-time in the office, fully flexible and hybrid.Combining the two databases, we found that firms which insist on staff being in the office five days a week won better ratings from their employees on “agility” - a company’s ability to anticipate and respond quickly to changes in the marketplace. “If you’re in the office,” explains Charlie Sull of CultureX, “you’re going to be able to receive information much more quickly and efficiently, and respond to new circumstances in a more adaptive way.”But on other measures, firms that were strict on office time scored worse than more relaxed ones (see chart). Firms with five-day mandates received lower marks from employees for supportiveness (whether employees feel like their bosses care about them), quality of leadership, toxicity (the extent to which disrespectful behaviour is tolerated in the workplace), candour and work-life balance. (On the three other measures tracked by CultureX, the companies did not score meaningfully better or worse.).The analysis has its limitations. In particular, it could also be the case that companies which care less about supporting employees or rooting out toxic behaviour are less inclined to heed workers’ pleas for more flexibility. Even so, the results are suggestive. “Companies that really score highly on agility - NVIDIA, SpaceX, Tesla - tend to strike a deal with their employees,” says Don Sull (who is also a professor at the MIT Sloan School of Management). Employees are offered generous pay, great career opportunities and other perks. “But the trade-off is the work-life balance tends to be really bad.”More than five years after the pandemic, companies are still trying to find the right mix of in-person and remote work. As labour markets cool, shifting power from employees to employers, bosses may be tempted to demand more office time, claiming that it will help corporate culture. For firms that prize agility, this makes sense. But the data suggest it comes a cost.

The Economist: Is company culture suffering or thriving in remote work?

Key topics:

From The Economist, published under licence. The original article can be found on www.economist.com

© 2025 The Economist Newspaper Limited. All rights reserved.

The Economist

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