Five Years Later...
The Evolution of Flexible Work
Five years ago, I was in Europe on a business trip for Slack, nervous about getting back into the US given the advance of COVID. If I'd told you then that at the end of 2024, 68% of US-based firms would have a flexible work policy, you'd have laughed me out of the room.
Slack itself was office-centric, like almost every company at the time. Mike Breevort, an engineering leader in our Denver office, made 23 trips to San Francisco in 2019 – mostly to be "in the room where it happens" on important meetings. I'd spent the last 25 years commuting to offices daily, even though I'd led teams distributed across cities for 20 of those years. Digital was already the lifeblood of how we collaborated.
We founded Future Forum in the spring of 2020. The work wasn't really about workplaces and remote work; it was about what leadership practices unlocked productivity, connection, culture, and innovation. How you work has always mattered more than where.
Back in 2020, we were already pointing out that time mattered more than place, connection was digital as well as in-person, and flexibility had disproportionate benefits for historically underrepresented groups. All still true today.
But the 5-year-old return-to-office battle is emblematic of something deeper. Are you building a learning culture that adapts, or falling back on conventional wisdom? Do you trust your people and hold them accountable for performance, or do you rely on control and want to see the visual signals of hustle culture?
What follows is the latest trends and research; the presentation version is also available to download for free! If you use the slides, please cite sources (and I’ll always appreciate a shout-out).
Where Are We Today?
In summary, there's a modest shift in policies in the US, but nowhere near a massive wave back to 5 days a week in the office:
As of Q4, Flex Index data showed that 68% of US-based firms have some form of flexible work policy – roughly flat since Q2 2024.
What changed last year is a noticeable shift towards 3 days a week in the office as a policy, which went from 19% of firms in early 2024 to 28% by Q4.
Those firms asking for 3 days a week are likely getting ~2 days in reality. That's expected: pre-pandemic, the average was ~3 days a week in office given vacations, sick days, customer visits and people with flexible arrangements
Over the last two years, there's been a roughly 2-3% decrease in work from home if you look at high-quality sources like Nick Bloom and team's SWAA data or the US Census. That’s a solid 5X increase from 2019.
Data from Kastle Systems (below) and CBRE tells a similar story – CBRE saw a 3 percentage point increase by October '24 to 32% average utilization in the Americas. Asia Pacific is higher, with a fair amount of variability (Singapore is more flexible, China is not) and Europe in between the two.
Another telling factor: in the US, office vacancies and office mortgage delinquency rates hit all-time highs at the end of Q4; even firms with structured hybrid approaches are shrinking their footprint.
Meeting in the middle – 2 or 3 days a week in the office – makes sense to many, as long as their teams are co-located. That's close to what most employees want if you look at SWAA data or Future Forum research. Better answers are found through conversations among leaders and teams, accounting for being distributed vs co-located and the rhythms of teams and organizations – moments that matter.
Flexibility Drives Benefits for Companies
Having talked with a wide range of CEOs, CHROs and other leaders over the years, it's not that the 68% who are flexible are all remote-first adherents. For most, this is an issue in the rear-view mirror: they set a 3-day-a-week guideline in 2021, they're getting two days, but the business is operating well and they have no need to waste energy enforcing policies that have no impact on outcomes.
What many have realized is that the shift towards flexibility allows them to recruit from broader, and more diverse, talent pools. They often save money as well, through a combination of lower labor costs, higher retention rates and lower office costs. Going backwards can be massively expensive in terms of staff turnover – you can't unscramble an egg, and distributed teams are scrambled eggs.
Contrary to the "return to office" headlines, you can also see that hiring hasn't moved all back to office jobs: Robert Half reports that remote and hybrid job postings actually grew consistently through 2024.
So, what does the research say about flexible, hybrid and remote work? Here's a quick summary:
Productivity: Fully remote can be less productive, but the study that cited a 20% decline was of tech workers in India in the summer of 2020 at the peak of the pandemic. Other work has shown a wide range, but generally zero impact to +12% gains, especially in hybrid setups.
Connection: Time together does matter, but quarterly gatherings can boost engagement more than chance in-office encounters, and in one study ~25% of time together had the best results. An important note: they let teams figure out if that was 1-2 days a week, or one week a month.
Culture: Don't get me started, but happy hours and slogans on walls aren't culture. It's how you treat people, what and who you reward, and how decisions get made that tell people your culture. The shift to flexibility has been the number one driver of improved cultures – balancing autonomy and team needs.
Innovation: We've known for years that it is more driven by psychological safety than watercoolers. Getting "weak ties" built through digital connections as well as in-person sessions matters, but the foundations of trust matter even more. Recent academic research shows that distance is no longer the impediment it once was – thanks to better collaboration technology.
Learning and mentorship: Potentially the largest area of challenge and unknowns, but the issues here are as much intergenerational as time together. Gen Z is less likely to turn to a manager than YouTube, and we now have two generations of five in the workforce who are digital natives.
Going Backwards Doesn't Help
I've written recently about CEOs who want to RTO, but I still get surprised by the weekly call from someone who hasn't thought through it. Even fundamental questions like "are your teams co-located or distributed" and "do you have enough seats" aren't always raised to CEOs pressing forward. What problems are we trying to solve, and should we instead focus the time and energy on building outcomes-based performance management?
Here's what the research is telling us about return-to-office mandates:
The employees most likely to leave are highly skilled and more experienced workers – they're the most marketable.
Women are more likely to leave than men, in two studies by a 3-to-1 margin; in the US, women are the primary caregiver at home 90% of the time/
What drops for everyone else is engagement, even among leaders. When you're working from home 2-3 days a week delivering results and the CEO says "come in five" what you hear is "we don't trust you."
Making people move because you changed your policy or to relocate with their team is the same as telling them to quit – even execs. Besides uprooting families and friends, higher mortgage rates and housing prices often means a 2X higher housing bill. Lack of promotions pale in comparison.
There hasn't been a study yet that has shown any financial benefit to firms of moving to 5 days a week, nor any studies where mandates have helped. The same is true of stock prices: no benefit.
There are studies that show that flexible firms outperform their peers and stock market expectations – it's not conventional wisdom (yet) so it's high payoff.
The link between 5-day return demands and desires for people to quit are also clear. The DOGE efforts in the Federal government said the quiet part out loud.
There's also a strong correlation between mandates and a couple of factors: is your firm an investor in commercial real estate, and have you been conducting layoffs? RTO mandates are often a soft layoff strategy.
What Works
Having worked with a range of firms who've built successful flexible work programs, and co-authored a book about it, there's a common framework that I've seen work. Two elements briefly:
Outcomes-based management. The most fundamental investment many flexible firms have made is a shift towards outcomes-based management. Moving to any given system – OKRs, MBOs, KPIs – requires sizable investment. From executive alignment on goals and priorities through measurement systems to change management, it's fundamental.
Even modest efforts bear fruit: the conversations alone force awareness that we're not really articulating goals in ways that help align and drive our teams.
The upside is tremendous: even a questionably executed OKR tracking process is 100 times better than assuming that because someone's behind is in a chair, they're working.
Learning cultures. Companies that have been most successful with flexibility – like Airbnb, Allstate, Atlassian, Dropbox, Target and Zillow – have all made investments to make flexibility work for them. Most often, trading out some of their office space for redesigned spaces, travel for distributed teams and small teams to drive enablement and train managers.
They may not have everything "perfect" when it comes to flexibility, but it's getting better all the time and their focus has shifted. They're still working on making workplaces better, creating meaningful gatherings for teams and better patterns around in-person collaboration. But they're far more focused on leadership development, making better use of time and adopting generative AI tools to redesign workflows. They've moved on to bigger challenges.
The same framework applies to generative AI adoption, by the way. Change management doesn’t happen through policy pronouncements, mandates and demands to do more with less.
Five Years From Now...
So, five years from now, will we still be talking about return to office drives? The current efforts will undoubtedly drive numbers up this year, but the long-term cost and performance benefits of flexibility will ultimately win out – if nothing else than because over 90% of companies started in the last decade were "born" flexible.
Human-centered ways of working help you get the most out of people. If you believe generative AI has the potential to transform organizations, it will demand more interpersonal, EQ-based skills of teams – not command and control. It will also require that you collaborate even more through digital tools, not through hallway chats.
The future of work isn't about going backwards.
Fantastically helpful digest--thanks, Brian.
Great article by Brian. And great research to support it.