Don’t Fall for the Return-to-Office Hype

Others are doing it, but that doesn’t mean you should too

Return-to-office is in full swing. YCombinator – the world’s top start-up accelerator and bellwether of tech trends – has moved back to San Francisco. I recently received this reply from an investor in YC start-ups, which echoes the prevailing sentiment:

But should you jump on the return-to-office bandwagon?

Maybe, but be careful.

The book Remote has a lot of good arguments in favor of remote work, and I’d recommend reading it if you haven’t.

In this article, we look at some of the less obvious things that you should consider before recalling your employees to the office, especially if you care about efficiency and are not a VC-backed startup.

What’s best for YCombinator might not be best for you

The #1 pitfall I’ve seen people make with big decisions is assuming something that works for others will work for them without considering how their situation is different.

If we assume for the sake of argument that return-to-office is good for YCombinator, let’s take a look at how their interests conflict with the vast majority of companies and employees.

YCombinator and most VCs only care about minting unicorns

$1+ billion outcomes are all that matter for YCombinator, and for most venture capitalists more broadly. This means insane growth at all costs. What’s best for them may not be best for all the individual companies in their portfolio, let alone companies without VC backing.

The main way this manifests is the question of growth vs. efficiency. For normal companies, efficiency and profitability are essential for survival. In the strange land of venture capital, efficiency is someone else’s problem later down the road.

If VCs believe remote work is more efficient but doesn’t accelerate growth, then they won’t care about it, especially at the seed stage.

Start-up employees are younger

According to Paul Graham in 2007, “the average YC founder is about 25.” According to a study by Radix, the average age of a software developer in the US is 39.8 years old.

This relates to remote work in a few ways. First, older people are more likely to have children. Remote work is more beneficial to people who have to juggle schedules with school or child care. Strict schedules also make it harder to put in as many hours when you have to commute.

Second, older people generally have more money and better options for a home office. Younger people are more likely to have small apartments or roommates, which can make remote work difficult.

Finally, younger people have different social needs. For many, work is an important place to establish friendships. People with families tend to be less inclined to stay until 8 PM on a Friday for happy hour.

People at seed-stage start-ups may prefer an office while people at other companies may not, simply due to age.

YC companies can easily attract top talent to an office

Hot start-ups in major tech hubs like San Francisco and New York can easily recruit and pay for the best talent in their own backyard.

For others, hiring great engineers is a major challenge.

Perhaps the biggest benefit of remote work is the ability to hire from a larger talent pool. This simply doesn’t matter much for small VC-backed startups.

Commuting isn’t free for employers

A shockingly common fallacy that a lot of people engage in is thinking that just because they don’t pay for something directly, the cost is zero.

Take sales tax, for example. When we had to start collecting sales tax everywhere at Collage.com following changes to the law for ecommerce companies, I heard comments from various lawyers and accountants that it wasn’t a big deal because our customers would just pay the tax.

My business partner, who is actually an economist, estimated that we effectively paid 80% of the tax. Why? A price is a price. Some people might not consider sales tax. However, if someone only has $50 to spend (and doesn’t intend to file a use tax return, which very few people do), then that is it and the company will get less money.

For return-to-office, the thinking goes that if you still require the same number of hours and employees commute on their own time (and dime), then it doesn’t cost anything to the company.

Wrong. If commuting is a burden rather than a leisure activity (I don’t personally know anyone who feels otherwise), then employees will factor that into their decision about which job to take. With all the remote job options, they will demand higher pay to go into an office.

Moreover, even if you demand the same number of hours, you are just making the work day longer. People may have less energy and lower productivity at the start and end of the day after a long commute, and you remove peoples’ ability to choose their work hours based on when they are at their best.

You may still decide that being in an office justifies the cost, but don’t fool yourself into thinking it’s free.

Trends are dangerous

Remember open office spaces? Despite significant evidence they hurt productivity, they were all the rage before COVID.

Why? It’s hard to answer that question definitively, but they were certainly trendy, with top companies like Facebook (before it was Meta) leading the pack.

It is safe to say that returning to the office is now a trend.

When things are trendy, people do them because other people are doing them, not because they make sense.

In the case of ditching remote work, there is some validity to following others because now there are fewer competing remote job options for your soon-to-be-disgruntled employees. However, there are still a lot, and it will be harder to attract people who prefer to work remotely.

The point here is not about whether remote work is good, but that anyone making such a decision should try to ignore what other people are doing and focus on what is best for their company.

Office work has significant hidden overhead

Everyone knows how much they pay for rent and office furniture, but in-office work has other large unknown costs.

For better or worse, being around other people takes time. You have to converse with your colleagues to maintain social relationships, worry about how you’re dressed, and generally spend time thinking about others’ social perception of you while you’re in the office. On top of this, there’s all the office politics. (This is all worse with open office spaces, of course.)

Sure, there is some of this in a remote setting, but you interact with other people on your own terms and choose how much effort to put into social interaction.

In addition, I have personally found that being around other people increases groupthink. It’s easier for people to think in a bubble when they are literally enclosed by the same four walls.

Of course, there are benefits to socialization and collaboration in an office as well, and remote companies often have in-person meet-ups to build trust and foster connection.

But, if you’re analyzing the costs and benefits of office work, don’t just write down office space on one side and better communication on the other. It’s more complicated than that.

It’s all about the talent

I’ve already mentioned that recruiting from a larger talent pool is a major benefit of remote work, but it bears repeating.

If you’re doing a cost-benefit analysis of remote work, your short term costs and benefits will entirely depend on your current workforce.

However, even if an office would be better for the team you have today, remote work could still win in the end by helping you attract and retain a better future team.

Now that everyone has had a taste of remote work, those who like it and have the freedom to choose will keep working remotely.

Who has the most freedom to choose? The best people. They have the most financial independence because they have the highest salaries, and they can get a job wherever they want.

I was just talking to a friend who’s a top-tier data scientist looking for a job, and he’s not even considering Amazon because they’d make him come to an office five days a week.

Other people may prefer an office, but labor is a market governed by supply and demand. With so many companies going back to the office, it seems more likely now than before that remote employers will have better employees available at a lower cost for some time to come.

Remote work isn’t for everyone

I love remote work personally and have been successful with it.

However, I’ve also seen it go poorly, like when Collage.com (my last company) went out of business a year after selling and being run by executives who didn't understand remote work. (There were other problems too, but I believe remote work issues were a significant factor.)

From what I have seen personally, there are two cultural issues that mix very badly with remote work.

Remote work is bad with low candor

The first is what I would call a low-candor culture, which is common in American companies. In a low-candor culture, people tend to not say what they think when it’s uncomfortable.

If you’re remote, this leads to people not sharing any critical opinions and keeping everything bottled up until it explodes.

Low candor cultures can survive in an office because it’s easier to pick up on non-verbal cues in person. It’s also easier to open up when you’re physically in a room with someone.

If this is how people in your company are accustomed to discussing uncomfortable topics, you probably need an office, though hybrid work may suffice.

Remote work is bad with low accountability

I have also seen companies that suffer from low accountability, where people fundamentally don’t want to work any more than they have to.

For example, if you ask someone a question and they give you an answer they are unsure of because finding the real answer would be more effort, then you have low accountability.

When you’re in an office, it’s easier to pin people down and actually get things done in this type of environment.

You can say “Hey, did you actually follow up with person X to see if the new proposal would work for them or are you just assuming? No? Let’s go find them right now and get an answer.” Or, maybe you put everyone in a meeting to make sure there are no gaps in communication.

I have encountered this type of thing most commonly with outsourcing where people have a mercenary attitude.

It’s hard for low-accountability teams to be as productive outside of an office, even in a hybrid setting.

The bottom line: is remote work right for you?

This is a difficult question that is not going to have the same answer for every organization, nor should it.

The important thing when making such a decision that has a major impact on the lives of every employee is to do so carefully with full consideration of your unique situation, and try to resist pressure based on what others are doing.

Going against the grain also has its benefits. As for the comment earlier, here was my response: