August 2021. GrowthPolicy’s Devjani Roy interviewed Prithwiraj (Raj) Choudhury, the Lumry Family Associate Professor at Harvard Business School, on the future of remote work and the emerging culture of work-from-anywhere (WFA). | Click here for more interviews like this one.
Links: Faculty Profile | Twitter | “Our Work-from-Anywhere Future” (Harvard Business Review article) | “Why Work-From-Anywhere Is Here to Stay” (Harvard Business Review podcast) | “The Future of Work in our Work-from-Anywhere World” (Harvard Business Review webinar)
Acronyms :
WFA = “Work from Anywhere”
WFH = “Work from Home”
Prithwiraj Choudhury: Thank you for your kind words. My research is focused on studying the changing geography of work and its impact on productivity and migration. I am particularly focused on studying the emerging remote-work practice of “Work-from-anywhere” (WFA), where organizations offer workers the flexibility to relocate and live in their preferred geographies, rather than living in the location where the firm has an office.
One of my current projects is focused on estimating the economic and social welfare effects of remote workers migrating to Tulsa, Oklahoma, facilitated by a program known as “Tulsa Remote.” Yet another stream of research focuses on “all-remote” organizations such as Zapier and Gitlab, which do not have any physical offices. In that context, I am studying how periods of brief, temporary colocation among all-remote workers affects subsequent knowledge sharing, formation of workplace friendships, and productivity. Yet another project is focused on studying geographically distributed, virtual headquarters.
GrowthPolicy. Your recent research paper, “Virtual Watercoolers,” is both timely and prescient. I’d like to you comment on “hustle” culture within organizations and the WFH/WFA paradigm. Recently, prominent executives such as Jamie Dimon (JP Morgan Chase) and David Solomon (Goldman Sachs) have spoken out against WFH/WFA stating, “It doesn’t work for those who want to hustle. It doesn’t work for spontaneous idea generation. It doesn’t work for culture” (Dimon). Is there some truth to these anxieties that an organizational culture wherein mobility and career ascension is based upon mentoring and apprenticeship would be negatively affected by WFH/WFA?
Prithwiraj Choudhury: It is true (anecdotally) that we have all experienced spontaneous and serendipitous interactions in a physical office. However, as research by Thomas Allen dating back several decades shows, communication patterns in a physical office exponentially decay as the physical distance between the workers increases. Given that employees are usually physically seated in close proximity to peers who are similar in tenure and/or function, this could lead to very few interactions across hierarchical levels and/or across functional groups.
In contrast, an organization could organize virtual watercoolers, randomly curating a group of employees to have a brief Zoom call and in doing so, could facilitate communication among employees across hierarchical and/or functional boundaries. In our experimental study (with Iavor Bojinov and Jacqueline Lane), we find that being randomly assigned to virtual watercoolers with senior managers positively affects performance and career outcomes of organizational newcomers. Our study also provides suggestive evidence that the organizational newcomers who were randomly treated to virtually interact with senior managers report receiving more advice and mentorship from senior managers.
GrowthPolicy. In your paper “Work-From-Anywhere: The Productivity Effects of Geographic Flexibility,” you argue WFA “should be viewed as a non-pecuniary benefit that should be preferred by workers who would derive greater utility by moving from their current geographic location to their preferred location.” I’d like you to talk about the term “non-pecuniary benefit.” In what ways should a worker’s self-selection of WFA or WFH be tied to compensation? If so, how would such a compensation structure or policy be administered in practical terms? After all, workers might argue organizations are deriving pecuniary benefits from WFA/WFH: lower office-rental costs, lower HVAC and electricity expenses, lower food budgets, etc.
Prithwiraj Choudhury: Prior research by scholars such as Henry Sauermann and Wesley Cohen as well as by Nicholas Bloom, Tobias Kretschmer, and John Van Reenen suggests that that non-pecuniary benefits that appeal to workers’ preferences for work-life balance, can positively impact work outcomes and motivate effort. In our paper, we argue that these effects will be stronger to the extent a non-pecuniary benefit is offered by a limited set of firms. When we studied the productivity effects of work-from-anywhere at the United States Patent and Trademark Office (USPTO), arguably WFA was a non-pecuniary benefit being offered by a limited number of organizations.
As a larger number of organizations embrace WFA, the question of how to set wages, whether to make them task-specific (and, hence, location independent) or not, will become salient. This relates to the question of capturing and apportioning value created by embracing WFA. We need more rigorous research to estimate the productivity effects of WFA with and without location-independent wages. My hypothesis is that for skills in short supply (such as machine-learning experts), it makes sense to allow WFA with location-independent wages.
GrowthPolicy. One of GrowthPolicy’s core research areas is economic inequality. In what ways has the COVID-19 pandemic exacerbated economic inequality in a work culture that applies different productivity and mobility measures to knowledge workers and very different ones to unskilled workers? Broadly speaking, what steps should policy makers take to rectify economic inequality?
Prithwiraj Choudhury: It is true that WFA is easier to conceive for relatively independent, knowledge workers who can mostly work on a laptop. However, a whole host of workplace technologies are expanding the frontier of WFA to a wider range of tasks.
In the manufacturing space, one technology that I am closely studying is the digital twins model, where sensors and automation enable the creation of a digital replica of the manufacturing plant (or oil rig), and allows for some tasks to be performed from a distance. My hope is that innovation in communication, automation, and related technologies will mitigate the inequality related to opportunities for WFA across jobs and industries.
GrowthPolicy. Take our readers to the year 2050. What would be your predictions and forecasts about how WFH and WFA will change the nature of work and also the nature of compensation for work?
Prithwiraj Choudhury: My hope is that WFA will become the default choice for employers and workers. Given a large-scale adoption of WFA, wages will be largely location independent. Individuals will live in towns, cities, states, and countries that maximize their own utility, mitigating frictions related to immigration, dual careers, homesickness, etc. We will have a more equal spatial distribution of talent across countries and within countries across cities. Maybe some of us could be working from space!