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The Power of Proximity

April 24, 2023 | Posted in: Wealth Strategies

In addition to my role at Diversified Trust, I serve on the board of directors of two major companies. So, I have at least three sources of perspective on the question of returning to the office. My general impression is that the work is getting done and that there has not been a noticeable decline in overall productivity. However, I have been concerned that “work from home” may result in damage to intangibles such as corporate culture, teamwork, and mentoring.

Well, a recent paper titled The Power of Proximity-Office Interactions Affects Online Feedback and Quits, Especially for Women and Young Workers was discussed in an April 24th New York Times article written by Emma Goldberg and Ben Casselman. It confirmed my suspicions. The study is very narrow in that it only focuses on software engineers at a single firm. However, I believe its findings can be generalized. The study found that remote work increased the productivity of senior engineers but significantly reduced the amount of feedback that junior engineers received, particularly females. While there were certainly other factors involved, this lack of feedback led to a greater likelihood that these employees left the firm. The authors suggest that at least in the case of white-collar knowledge workers, presence in the office is important in early-career development. Moreover, they are concerned that there will be a career penalty that will particularly impact women, younger workers, and people of color who may not have the professional networks that being in the office can help provide. Moreover, this penalty may only emerge much later in the form of disparities in pay and promotion.