73%: The Hybrid Work Paradox

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ELISE HU: I’m your host, Elise Hu. This season we’re focusing on hybrid work. We’ll let you in on some of Microsoft’s most surprising findings to help companies and individuals create a better future of work.

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ELISE HU: The biggest test for companies yet, more monumental than even last year’s sudden move to remote work, will be how to navigate the seismic shift to hybrid work. So, we’re kicking off this season with a 30,000-foot view with someone who knows the subject very well: Jared Spataro, the leader of Microsoft 365 and Microsoft Teams. Jared, thanks for being here.

Let’s start in the here and now. What are the key factors that you are considering, especially when thinking through back to the office start dates, because obviously, the ground information is changing almost every day.

JARED SPATARO: Just like any organization, we are most concerned about the health and safety of the people that we serve. We start with our employees, and then the people that we serve. So, that’s the first and foremost conversation topic when we’re talking about when we’ll be headed back to our office space in a more normal way.

ELISE HU: And Microsoft, of course, isn’t alone in that so many companies are saying that employees really want flexibility. A lot of them liked being able to have this remote work option when it all started. And it sounds like Microsoft is really embracing that, but it is quite a paradox, right, this shift to hybrid work. What do you think it’ll look like when things settle out?

JARED SPATARO: Well, let’s start with two different data points that really tell an interesting story. The first is focused on what people want when it comes to this remote type of flexibility that they’ve had. And we found in the study that we did called the Work Trend Index that 73 percent of people we surveyed—and we surveyed 30,000 people across 31 countries—said that they wanted the—

ELISE HU: Wow.

JARED SPATARO: —the flexibility to stick around post-pandemic. So, that was—I don’t think I would’ve necessarily predicted that pre-pandemic.

ELISE HU: (Laughter) Yeah.

JARED SPATARO: At the same time, 67 percent—same survey base—67 percent of people said that they wanted more in-person time with their colleagues too. So, we tend to think of this as what we’re now calling the hybrid paradox—people want to be back in person with their colleagues to be able to do more. At the same time, they love the flexibility. I hear people saying, “I never have eaten breakfast with my kids before. It’s sure nice to be at home for those little moments.” I think we have this great opportunity to work it out together so that the future is really the best of both worlds.

ELISE HU: And that is this idea of the Great Reshuffle, right?

JARED SPATARO: Absolutely. The great news about Microsoft is we have this opportunity to bring together data points from all over the place. And LinkedIn, at the same time that we’ve been studying this here in my part of the business, has also been taking a look at this. They have their—their talent network to look at and the data points there.

ELISE HU: Yeah.

JARED SPATARO: They found the same types of things. In addition to just flexibility, there’s another dimension that this Great Reshuffle is all about. And it’s the idea that people not only want and value that flexibility but they’re also thinking about where they work, why they work, how they work, if they really feel satisfied with their current employer. We had a datapoint coming from that survey I mentioned earlier that said 41 percent of people all around the world—remember, this is a very global survey, 31 countries—41 percent of people said that within 12 months they did not expect to be with the same employer. That’s what’s behind the reshuffle.

ELISE HU: Wow.

JARED SPATARO: Yeah, we haven’t seen numbers like that for decades. And that sets things up for that Great Reshuffle.

ELISE HU: How does this Great Reshuffle and the paradox that you set, how are these two ideas sort of linked?

JARED SPATARO: You have to zoom out, at least as I see the picture right now. The first thing that’s happening is that we are absolutely seeing that, as people are pushed into remote work—not something anyone would have chosen—that they learned new skills and that they saw benefits from flexibility. So it’s like, wait, I could do this and there are real benefits? So, that started to enter into, I’d say, the mind of the average worker in a way that it hasn’t previously. Remember, pre-pandemic, although people did work remotely, for the most part it was kind of considered an anomaly.

ELISE HU: Right, right.

JARED SPATARO: Then the second thing that has been fascinating for me based on the data as I read it, it sure feels like the pandemic has had as big an impact on people’s psyches as things like the Great Depression, World War I, World War II—these very big events that cause people to rethink what’s important to them. Where am I spending my time? Why am I spending it there? What should I be doing differently?

When you smash those two things together, all of a sudden, you end up in this Great Reshuffle where lots of people are saying, “Gosh, you know what, remote work and this new hybrid work is giving me more flexibility.” And, “Gosh, now that I come to think about it, I want to do something different anyway.” And that leads to a real shift in the labor market that I think companies are just beginning to experience right now.

ELISE HU: And, obviously, data is so important to undergird all of this, and y’all have gathered a lot of it. So, let’s talk about where the data comes from. There’s so many layers of research at Microsoft, so walk us through a few.

JARED SPATARO: Well, it’s interesting because, like a puzzle, we’re trying to piece this together. Nobody knows exactly what’s going on, and it’s very unique because we’re all going through it together. The couple of places that we’re able to—to get clues include what we call the Microsoft Graph. This is essentially telemetry from Microsoft 365, from Teams, from the products that people use every day.

ELISE HU: Break that down for me. ( Laughter ) For those of us who are not as technical.

JARED SPATARO: Well, Teams is a product that is used by over 250 million people on a monthly basis. And what that means is, is they fire up Teams and use it—that includes chat, meetings, phone calls. We’re able to take all of the telemetry associated with that and then build out a view of communication. We don’t do this on a one-on-one basis. It’s all aggregated data so we can look at large trends.

We’re able to see that during the pandemic, in some countries, the workday got longer by more than two hours, and in most countries it was longer by an hour. So, we could actually see patterns in how people worked to how they communicated with other people.

The second place is Microsoft Research. We have some great researchers here on staff and they really turned their resources, time, and attention to trying to figure out what was going on. And this meant that they were out doing real, first simple examples would include strapping these EEG monitors onto people’s heads and having them attend video meetings, and saying, let’s watch the beta brainwaves. Let’s see what happens.

It’s that type of research, primary research, that gets us the cutting edge of what’s going on. Is there such a thing as this digital exhaustion? Does it really exist? Where does it come from? And that’s the second big one for us.

The third one, then, turns us to customer and third-party research. This is where we work together with educational institutions, where we go deep with customers, where we have the opportunity to dig in and say, let’s look at this not just from a numbers basis, but let’s look at a particular scenario and see what’s happening.

ELISE HU: Got it, got it. And I understand that Microsoft is doing daily pulse surveys too. So can you talk a little bit about what those are and when you started them?

JARED SPATARO: We have an employee base of over 175,000 employees across the world in 190 countries. So just pulsing our own employees gives us a sense for where people are.

ELISE HU: Yeah. (Laughter)

JARED SPATARO: We ask them all sorts of questions, about how they’re feeling about their work, how they feel about the environment they work in, how they feel about their manager. And then we try to collect some long-form input that they can give us as well. So, it’s a—it’s a super-rich global data set that allows us to understand what’s going on with our workforce right now.

ELISE HU: Did anything surprise you?

JARED SPATARO: I was surprised, as the results started rolling in and then were consistent as to how what we would call the inclusion index has gone up. And what we mean by that is people now feel more included than they ever have at Microsoft, which is really fascinating.

It wasn’t something that I necessarily would have predicted previously, and I just think that it’s because we’re in this new place where people have adapted to being able to meet online. It’s a very level playing field. Everybody from the CEO to the—to the newest intern is online. They have all the same tools at their disposal.

ELISE HU: Yeah, it’s interesting to hear you say that notion about the democratization of work because of this moment and the tools that we’re using.

JARED SPATARO: The culture in any type of organization evolves over time. And one of the aspects of culture is that people who’ve been there for a long time tend to understand it better or navigate it better. But when we move to remote work, all of a sudden our interactions were being mediated through these tools. If I take Teams as an example, you had video conferencing. Everybody was a square, if you will.

One of the things that we started to see was that we were all adapting to the tools at the same time. And a specific example for us is the integration of chat into meetings became a very important part of what people did. We found that it gave people a voice in a way that they previously may not have had in some meetings.

So, as an example, I often see in my own meetings that people who may have been a little bit more reticent to speak up in person, for whatever reason, aren’t at all reticent to write something in the chat. And people read that, and they—it can take the meeting in a totally different direction. It’s not uncommon in our meetings for someone to say, “Hey, Sarah just put some data in the chat that we should really think about.” And it would have been hard. You would have had to find a time to insert yourself. Sarah would have had to get in there and show what she was doing. So, it’s a new modality that I think really is changing communication for better.

ELISE HU: Yeah, I imagine it really helps introverts or those who are more introverted among us.

JARED SPATARO: My sense is that’s true. My sense is it also helps folks who are earlier in career who are trying to just figure out the dynamics of how do these things work. You may remember what it feels like. You can think back to like, oh yeah, I remember trying to insert myself into a conversation.

ELISE HU: Yes.

JARED SPATARO: And now, you can do that in a different way.

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ELISE HU: And Microsoft has done a ton of research about remote meetings. Let’s take a minute to hear from researcher Jaime Teevan, who shared some insights with our correspondent Mary Melton.

MARY MELTON: Jaime is the chief scientist at Microsoft. She was new to the role when the pandemic hit, which is pretty remarkable, and that means she’s been at the center of the largest research effort in Microsoft’s history. So thank you, Jaime, so much for being here. Let’s start with remote meetings. Tell us what you’ve learned.

JAIME TEEVAN: Research that we’ve done using EEG brain scans of how people’s brains work actually show that meeting people remotely for the first time is really stressful. When you look at those scans, you can see the cognitive load is greater when you meet somebody remotely than in person. And then perhaps even more importantly, that initial remote meeting impacts our future interactions. So, that high cognitive load that you have when you meet somebody for the first time, when they’re remote, it persists when you’re in person. And it’s actually more stressful to see that person, if you’ve met them for the first time remotely, in person. And that actually really makes me worried for my twin boys, for example, who started high school this year but didn’t meet any of their classmates in person and had to, until eight months in.

MARY MELTON: Is there a disconnect that goes on when you see someone in person, when you’ve only experienced them through a screen? Just living in Los Angeles (laughter), it’s always strange to meet a celebrity who I’ve only seen on the screen my entire life, and they almost don’t look real. In hearing your explanation of that, I wonder if that’s analogous to this at all.

JAIME TEEVAN: Yeah. It’s so different to me to talk to somebody remotely versus in person. One of the things that’s been shocking, going back into the office, is that people are different heights. (Laughter) And it’s funny to be like, oh, I had no idea how tall you were.

MARY MELTON: Exactly. Not that I’ve had any Teams meetings with Brad Pitt, but when I first saw him I was like, oh, he’s not as big as I thought he was going to be. So, yeah, I could see how that could work.

JAIME TEEVAN: But then people have sides of their faces and backs and, and actually, we use a lot of these cues as well of being able to lean into somebody to indicate attention. Actually, one of the things that you find really hard with remote meetings is turn-taking. And there’s a number of reasons that turn-taking is hard. Some of them are technological. Turn-taking can be hard because there’s lag in the audio or those sorts of things. But a lot of them are actually the fact that when we’re meeting with somebody remotely, we lose a ton of cues.

You lose seeing a person as a full person. You lose a lot of the common ground, but you also gain a lot of things as well. So, one of the things that I love about remote meetings is being able to have my notes right in front of me. I also like being able to see everybody’s names. It’s actually made it much easier for me to remember who people are.

And another thing that we see is people are really using in-meeting chat, the sort of parallel chat that occurs next to a meeting a lot. In fact, 70 percent of Microsoft employees are using in-meeting chat. One of the advantages of that is it allows people to start participating without having to actively take the floor. You see that being used by people with less visibility in a meeting. For example, women find in-meeting chat to be particularly valuable to them. And then there’s also a really interesting point there too, which is as we move to hybrid work, there’s a real opportunity for us to start thinking about how to capture the best things that we’ve learned from remote work and carry those forward into our new ways of working.

MARY MELTON: Jaime, thank you so much for your time and your insights. Your work is fascinating and I really appreciate you sharing it with us.

JAIME TEEVAN: Oh, thank you, it was a pleasure.

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ELISE HU: Fascinating indeed. Okay, so all of this data helps undergird these giant Work Trend Index reports. Talk about the why. What’s the motive behind them?

JARED SPATARO: First, no one knows right now where it’s all going. So, we’ve tried to adopt this idea of being a learn-it-all rather than a know-it-all. That’s an important aspect of Microsoft’s culture that I think has served us well over the last few years under Satya Nadella, our CEO. He’s really, I think, trained us to say, gosh, it’s not the people who think they know what the world looks like or will look like. It’s the people who can learn quickly, who can take signals and process that.

The second thing is we actually don’t believe that there really is a business of predicting the future as much as there is a business of creating the future. So, the underlying why behind it all—I want the best of both worlds. I want the beauty of having those colleagues of mine be able to really eat breakfast with their kids still during the week. At the same time, I think we have been missing some in-person interactions and the social capital that comes from that. So, I want it all.

ELISE HU: Sure.

JARED SPATARO: I think we can get the best of both worlds, but we have to do that together. We have to do that with culture and technology. It takes, I would say, a very pragmatic approach to building the future, and that’s what we’re after.

ELISE HU: Jared, you have said that we are the first truly digital generation of workers on the planet. Has this transition been easier for some generations than others, like younger workers?

JARED SPATARO: It’s been a mixed bag. We have seen younger generations who, I would say, are more technology literate take more quickly to the technology. Very simple example: Texting already was a very common way to communicate among millennials and certainly GenZ folks who are just starting to enter into the workforce now. So, texting as a part of a meeting, essentially, the meeting chat wasn’t a big deal. They picked up on it quickly.

The interesting thing, however, is that as we have gone out to analyze the data and figure out what we see happening there, that it actually has been more—when we asked people how they were feeling about their remote experience, this is in that Work Trend Index.

ELISE HU: Yeah.

JARED SPATARO: Sixty-one percent of leaders—and we defined a leader as someone who had decision-making authority for a part of the business—said that they were thriving. That was a full 23 percentage points higher than those without decision-making authority. So already, we have people in the organization who seem to catch up to the technology over time, and they said, oh, it’s great, I love this.

Now, in contrast, 60 percent of GenZ said that they were just barely surviving or struggling in this new work environment. And that was a surprise because I would have thought, well, you’re technology literate. And what it ended up, as we have dug into it, it’s not just about the technology. It’s about your ability to use the technology and pull on the networks, the social capital you’ve built up, to know how to get things done.

ELISE HU: Oh, yeah.

JARED SPATARO: And I just think we didn’t realize that when you’re early in your career, you’re still learning the ropes. It has been more difficult for sure, even though the tech is great, to learn those ropes.

ELISE HU: Did you see a generational divide, then, in how respondents answered the questions about whether they wanted to come back to the office full time or whether they wanted to stay remote or hybrid?

JARED SPATARO: We did see that. We actually saw three groups that were much more pulled or attracted to remote jobs. Those were GenZ, as we just talked about, so they felt more comfortable with this idea of let’s go remote, women in general, and those without a graduate degree, those three areas.

So, what we get excited about there is, from our perspective, remote opens new possibilities, not just for those individuals, not just for those groups, but for the economy. This is a great example where it’s clear that remote jobs and remote work seems to be very attractive for a certain segment or a couple of segments of the population.

ELISE HU: Well, as much as people want the flexibility that you’re discussing, there’s also a lot of uncertainty in this moment (laughter) which makes your job interesting, right, about how all of this is going to work practically, as you’ve mentioned. So, that’s a huge question. How are you thinking about creating a sense of place and culture no matter what the space?

JARED SPATARO: This is the million-dollar question right now, is where do we go from here, and what does place and space and belonging look like going forward? We believe that every organization is going to need to create a digital employee experience. For decades now, people have spent money creating a physical employee experience. They spend money on everything from carpet to chairs to painting to even art that’s on the wall.

ELISE HU: Yeah. ( Laughter )

JARED SPATARO: We believe that people are going to have to spend that same type of time, attention, and money on a digital experience that has persistence regardless of where you are.

So, in other words, if I wake up and roll out of bed and walk over to my office, and I happen to be working from home that day, I need to be able to feel like I’m a part of the organization that I belong to. I need to feel like I’m in the know. I need to feel like I’m connected. I need to see in many ways almost that branding in that field I know what’s going on. It needs to be able to give you those same signals that you got when you walked into your familiar office and you saw your receptionist and you said hello, and you walked in and thought, okay, today is going to be a good day.

So that’s one thing that we think is important, is this idea of investing in digital employee experience, just to get started.

ELISE HU: Can you paint a picture of some examples of how a digital experience comes alive for somebody?

JARED SPATARO: Yeah. If I make it very practical for a moment, it is the evolution of the Intranet, but in a very modernized way. So, the idea behind the Intranet is quite good because you were able to publish to your employees like, hey, here’s what’s going on. The—the thing that didn’t work is that you were trying to get people to visit an Intranet site the way they would visit the New York Times or Wall Street Journal , like, come on to this site. (Laughter) There was just never enough content there, fresh enough for it to be interesting.

What we’re finding, and the way that we have built our idea of this—this digital employee experience platform—is when you build it right into the place that people already spend their time, namely into Teams, you don’t have to ask them to go spend their time there. You have captured them at the point of interest and that’s exactly what we do.

ELISE HU: Sorry to quote you back to you again, Jared, but you’ve also said ( laughter ) that in the tech industry, remote work led to a rush for talent. So, this seems like a good time to discuss the changing geography of work, the idea that anyone can now work from anywhere. How are you preparing for that, because as this Great Reshuffle, this migration continues to happen, we’re not done with it, right?

JARED SPATARO: I think we’re just getting started with this Great Reshuffle. Let me just talk about maybe the defense and the offense, if you will, you know.

ELISE HU: Okay.

JARED SPATARO: What’s happening on defense. Certainly, I think in the tech industry, we are seeing competitors target each other’s talent. And what has happened that has been different than previous attempts, is that now everyone feels much more comfortable with remote work. And so, a competitor can come to one of your prized employees and say, “Look, you wake up on the same bed tomorrow, your kids go to the same school, you actually roll out and walk to the same office. The only thing that’s going to be different is they’re going to be looking at different people. And I promise you, we’re better. Come join us.” ( Laughter )

And the ability to not change, to essentially take away the transaction costs of relocation is huge. I’m definitely seeing the manifestation of that within our industry. And you have to play defense there by really taking a step back and saying, okay, what is it that keeps people in my organization? It can’t just be one aspect of what I used to think of as the package I offered them. Are they feeling really good about multiple aspects so that they’re in a good place here?

That would lead me then to the offensive side of things where, for the first time ever, I also think that you get to go tap into new talent markets in ways that you haven’t been able to do before.

ELISE HU: Yeah.

JARED SPATARO: So, just a simple example. I have a direct report that we hired during the—the pandemic here. We hired her in Atlanta. She told me, in my first conversation with her, “Look, if you tell me I have to relocate to Seattle, the conversation is done. I’m not that interested.”

ELISE HU: Oh, wow.

JARED SPATARO: Pre-pandemic, we would have said, we’re a very Seattle-centric culture. You’d have to be here.

ELISE HU: Yeah, and then you would have lost her too as a recruit.

JARED SPATARO: Exactly right. This time, I was able to say, “You know what? No, like, you don’t have to move at all. Like, you can stay where you are.” And our conversation not only continued, but ultimately, we were able to convince her to come join us. And it was just—it just allows us to tap into new labor markets, new talent pools in a way that we haven’t been able to do.

ELISE HU: We’ve talked a little bit about this already, this idea that one size doesn’t fit all when it comes to hybrid work. What data do you have to support that so far?

JARED SPATARO: I love to look at the data and have it make me go, I’m not sure what’s going on. And we had two data points that—that did that for us a couple of months ago that really led to an interesting insight. We looked at what we called “focused work.” This was the idea that you could zero in on something, push everything to the side and get some work done. Among employees who said that they plan to spend more than nine-tenths of their time working at the office—so, these are the people who said, I want to get back into the office, please—58 percent cited focused work as the top reason. Presumably, what they were telling us is it’s a little hard to find my focus at home, and we can understand that. There’s a lot going on at home.

Meanwhile, among employees who said that they plan to spend nine-tenths of their work at—working time at home, 58 percent—again, the same share—said that focused work was the reason why. In other words, those employees were telling us, I go in the office and I can’t focus. Everybody talks to me. ( Laughter )

And so, what was so interesting about those two data points for me is it just showed this idea that like, hey, different strokes for different folks. We essentially have two different working styles here, manifesting themselves in a more flexible way by saying, hey, for me, focus happens at home; and someone else saying, but for me, focus happens at the office when I shut my door. And we just think that that’s great. We think we should be able to accommodate that flexibility.

ELISE HU: And for those coming back in, how have you maybe modified or redesigned the offices? Will they look different to an employee who’s walking through the door for the first time in, gosh, almost two years?

JARED SPATARO: When it comes to safety, we’ve been looking at local regulations and we follow those things. If we need to spread out desks and create social distancing, we do that. But for the most part, as people have gone back, the offices aren’t all that different. They aren’t redone or redesigned.

One of the big questions that, of course, is, do you need less or more office space and how will that space need to look? We are finding that people, when they come into the office, are in many cases hoping to have more connections with others. And so, we are looking at what we would do to change the space so that it’s more connection oriented rather than just focus work oriented, which is the case historically at Microsoft.

ELISE HU: Yeah. How are you all thinking about employees feeling left out in this new model?

JARED SPATARO: Our perspective on this is that first, we offer flexibility, and then second, that the rubber hits the road. The most important touchpoint that any employee will have with the company will be his or her manager. We just think that managers are so important in this experience going forward.

For us, the culture makers, the culture shakers, those are the managers. That’s where it really hits and where we see if people are getting the experience we want them to have.

ELISE HU: And I understand Microsoft has something called the model, coach, care management philosophy. Could you explain that philosophy?

JARED SPATARO: You bet. What we really expect from our managers is that they model the behavior that we want to see for employees. If we are really saying give flexibility to people, we want managers to be flexible. We don’t want managers to show up in the office five days a week because employees feel a real pressure to show up then.

In terms of coaching, we want them to—to not be directive and tell people exactly what to do, but instead to help people learn how to do things on their own. This just essentially gets to teaching a man to fish as opposed to just giving him fish.

And then the third component has been so important during the pandemic, and it’s caring. We’ve really asked managers to lean in, in a way that you don’t often hear in a corporate environment. This idea of employee wellbeing clearly has popped as a trend that we think will be important for organizations going forward.

ELISE HU: Well, it’s not only good for the employees and good for retention, it’s also good for the bottom line to have happy and fulfilled workers.

JARED SPATARO: What companies are after, I think, is sustainable productivity—it’s just like the difference between a sprint and a marathon. Like, you’ve got to learn the pace and you can only be good over time if you have that sustainable differentiation competitively. And you need to really, I think, cultivate that within your workforce to get it right.

ELISE HU: Okay, let’s jump ahead. I know you don’t like to predict the future, but let’s assume it’s October 4, and maybe, hopefully, folks have started returning to the office. So, what excites you most about the possibility?

JARED SPATARO: I might have an unlikely answer for you. What excites me most, and I look forward to, is this idea that it’s a—it’s a non-event, that what—what happens is that the news is that there isn’t any news, that we just keep on ticking on, that people go into the office when it’s right for them. People stay at home if they need to or if they want to. Really, what ends up happening is we start to get that best of both worlds.

We definitely know people want to be in the office. We, again, we go back to the numbers and they show us that, but—but I just hope that that day starts to feel like, wow, what I really noticed was how well we just kept doing our jobs, even though people were scattered all over the planet. Flexibility is going to be good for everyone.

ELISE HU: You’re optimistic that we’ll be able to bridge the physical gap and create this better future of work together. What drives that sort of excitement?

JARED SPATARO: It’s better for everyone. It’s better for employees. It is recognized as, wow, the flexibility is valued. It’s better for employers. Not only can they tap into new labor markets, new talent pools, but they also can have a sustainable competitive advantage because their people can keep going. It feels like, yeah, I can keep performing at this level over time, over the long term.

What you’ll start to see is, wow, the companies that are doing it are just performing better. Their people are happier and they become talent magnets in many ways. And so, I think that we’ll start to see the best practices spread quickly, even if it’s lumpy at first and people figuring out how to do it, those things will very quickly be shared.

ELISE HU: Jared Spataro, who is the corporate vice president for Microsoft 365 and leader of Microsoft Teams. Jared, I so enjoyed getting to geek out with you over this.

JARED SPATARO: Likewise, Elise. Thank you very much.

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ELISE HU: You’ve been listening to the WorkLab podcast, from Microsoft. There’s a WorkLab digital publication too. Check out microsoft.com/worklab for more insights about the future of work, and please rate, review, and follow us wherever you listen to your podcasts.

WorkLab is produced by Microsoft with Godfrey Dadich Partners and Reasonable Volume. I’m your host, Elise Hu. Our correspondents are Mary Melton and Desmond Dickerson. Thanks for listening.