It used to be that Big Tech companies like Google, Meta, and Apple led the way when it came to workplace advantages. On top of great pay, they offered freebies like gourmet meals, massages, and on-site laundry. Then, when the pandemic made the office a physical danger, those same companies were among the first to offer the ultimate perk: the ability to work where you wish.
But, as their stock prices have suffered, Big Tech has not only dialed back on many on-site perks, they’ve also called workers back to the office. Facing hard times, they’ve retrenched into what they knew before the pandemic, typically asking workers to come into the office three days a week. Google is even factoring office attendance into performance reviews.
Smaller tech companies have since picked up the mantle of remote work. They are much more likely than their larger peers to allow people to work fully remotely, with 81 percent of those with fewer than 5,000 employees either allowing remote work or only having remote options, according to new data from Scoop Technologies, a software firm that builds tech to help hybrid teams coordinate and also tracks the office policies at major companies. Meanwhile, just 26 percent of companies with more than 25,000 employees are fully flexible.
Tech has the greatest variation in fully remote policy by company size than any other industry. This suggests that remote work is completely possible in the tech industry, but different-sized companies have settled on different policies based on how they think it benefits them or not. And their reasons for doing so might depend, in part, on how they want to portray themselves to the outside world.
Why the so-called “flexibility divide” among tech companies?
Tech companies with fewer employees are using remote work as a way to pull in more talent in what had been a notoriously difficult hiring environment and to signify that they, unlike Big Tech, are where progress is happening. People in the tech industry, especially, are more likely to be lured by remote work, according to Gartner, which has found that better work-life balance and greater flexibility were the top benefits tech employees would choose over 10 percent higher compensation.
That’s a big deal for smaller tech companies, which haven’t always been able to compete with the Googles of the world in terms of salary. Airbnb, which employs more than 6,000 people, has used its work-from-anywhere policy to attract not only more applicants — its career page saw twice the traffic last year as it had the year before — but also more diverse ones, with 21 percent of new hires being under-represented minorities.
“We want to hire the best talent we can all around the world,” Dave Stephenson, Airbnb’s CFO and head of employee experience, told Vox. “If we narrow that definition of getting the best talent around the world to being 50 miles around San Francisco, that’s going to put us at a disadvantage.”
At the same time, Airbnb has cut its office footprint by half, slowed attrition, and marked its first full year of profitability. The company pays to fly in its far-off employees — about 20 percent of its workforce — to be together from time to time. But this only happens if the company’s “ground control” team has deemed that there’s an important project that requires them to be in person.
“If they’re satisfied with their ability to balance their personal lives with their work lives, I think we get more effective performance out of people,” Stephenson said.
The situation is similar at Yelp, which also lets its 5,000 workers choose where they work and notched its sixth straight quarter of record revenue last quarter while also rolling out products like AI-powered search. The company says that remote work hadn’t hurt sales goals or engineering productivity but had caused a huge spike in its talent pipeline.
“I think we saw pretty early on during the pandemic that, wow, this is actually working,” said Carmen Whitney Orr, Yelp’s chief people officer, who joined the company remotely last year. “Happy employees are productive employees and that means happy customers.”
The ability to work remotely is most common among the smallest tech companies.
“If you can demonstrate that you’re able to create a team that is just as productive, if not more, by being remote, then there’s really no reason to not do it,” said Zuhayeer Musa, co-founder of tech compensation comparison platform Levels.fyi, which has nine workers. Levels.fyi was founded as a remote company in 2017, which Musa says makes it easier to continue working remotely.
In turn, remote work has meant the company has had better access to talent than it would if it demanded office attendance.
“If you require someone to move to a certain location, you are inherently limiting the talent pool that you’re going to be working with,” he said.
That could be what Big Tech is doing.
Amid economic uncertainty, flagging stock prices, and years without major innovation, larger tech companies are using their calls back to the office to signify to shareholders that they are grown-up and responsible corporations. Gone are the days of ping-pong-playing engineers and squandered profits. Here are the days of penny-pinching and strict oversight, probably in an office environment.
In other words, what were once considered the most innovative and forward-thinking companies are behaving a lot more like their stodgy non-tech corporate counterparts.
When it comes to allowing fully remote work, policies at big tech companies are closest to their non-tech peers, like Citigroup and Starbucks. Like their non-tech counterparts, many tech companies have quickly shifted to a structured hybrid model, where workers have to come in a set number of days per week. The share of large tech companies that are doing hybrid (65 percent) is nearly the same as large companies overall (60 percent), as is the number of days per week they want people in (2.5 on average), according to Scoop.
“Bigger companies, more complex companies, are more likely to be looking for more professional types of management,” said Kathy Harrigan, a professor of corporate management at Columbia University’s business school. “Investors expect that.”
And professionalism to them means butts in chairs. Harrigan says in-person work is necessary to coordinate the complicated, varied businesses these tech conglomerates now operate. The move to AI has only made in-person coordination more of a necessity, she said.
“They’re working with a more complex kind of product. It means a lot more coordination from a lot of different points of view, where previously these workers were permitted to work in silos,” Harrigan said.
One could argue that companies like Google, Meta, and Apple all ran very complex businesses during the pandemic, when they recorded record profits while their workers toiled from home.
“In the face of volatility and uncertainty, it is human nature to want to revert back to something that is a known quantity,” said Caitlin Duffy, a research director at Gartner, about the push to return to the office. “And so there might be some psychological things happening that may be overriding the evidence in front of them.”
The evidence, she says, shows that offering flexibility in where people work makes them happier and, by extension, more productive and innovative. Accounts to the contrary were “unfounded.” What’s worse, Duffy said, is that arbitrarily calling people back to the office might actually hurt workers’ productivity and innovation by driving fatigue and burnout.
Whether their back-to-office plans ultimately end up harming these companies remains to be seen. Big Tech companies, of course, might be able to sit back on their brand names and giant salaries to attract talent. But to some extent, with their flexible remote policies, small tech companies are expressing their ability to innovate and grow, just like the big guys used to do.