When the Covid-19 pandemic hit, tech companies were among the first to close their offices and allow (or even mandate) fully remote work. It was considered a temporary solution to achieve social distancing and became an accidental workplace social experiment. Workers reported increased flexibility, better work-life balance and higher productivity, among other benefits. A 2020 Stanford study showed that business productivity increased by 13% when comparing companies’ profits to previous years.

Even though the data shows that remote and hybrid work boost productivity and the bottom line, some tech companies are now mandating a return to the office. Last week, Amazon announced it would require some staff to return to the office in a memo from CEO Andy Jassy. And Amazon is hardly alone. Several other tech companies have called some employees back to the office at least a few days a week.

In this post, I'll dive into what's driving these return-to-office (RTO) mandates, and into the concerns about proximity bias that these decisions have sparked in the workplace.

What is proximity bias?

Proximity bias refers to the tendency of people to favor and give preferential treatment to individuals who are physically present or working near them. In the workplace, this bias can result in on-site employees being perceived as more dedicated, engaged and productive than their remote counterparts. It can also lead to the exclusion of remote workers in meetings, not relaying important information to people working outside of the office and more.

The recent Amazon return-to-work announcement sparked healthy and engaging dialogue on LinkedIn, Reddit and other social media sites. Some employees complained about being required to work from an office only to be stuck on conference calls all day. Others heralded the return, citing the missed camaraderie an office setting provides. Still others mourned the loss of flexibility and agency required to perform at peak capacity without burning out. This all leaves the question: Is proximity bias worth worrying about?

The reality of proximity bias and its effect on culture

Is proximity bias real? A recent study revealed that in the event of a recession-fueled downsizing, 60% of American managers said it's very likely that remote employees would be the first to be laid off.

Amazon’s Jassy may have also displayed some bias in his memo to employees. In it, he proclaimed, "Teams tend to be better connected when they see each other in person more frequently. There is something about being face-to-face with somebody, looking them in the eye, and seeing they're fully immersed in whatever you're discussing that bonds people together. Teams tend to find ways to work through hard and complex trade-offs faster when they get together and map it out in a room." Simply because Jassy stated this, Amazon’s leadership may believe it is objectively true, which could introduce proximity bias.

The truth is that the masses have spoken, and they want to work remotely. Roughly 85% of remote workers report that they would like to continue working from home at least part-time for the rest of their careers. Addressing these desires will require massive trade-offs for companies forced to reconcile employee preferences with things like tax benefits for companies with in-office employees.

And yet ultimately, putting company culture first often leads to better company performance. A brand-new McKinsey research report underscores the need to build human capital and foster collaboration; it also points out the economic advantages of supporting healthy work cultures. The fact is that companies that prioritize building human capital are more resilient and have higher growth and higher profits.

Anu Madgavkar, a partner at McKinsey and lead author of the report, summed up the people and performance (P+P) data: "P+P winners [have] the ability to build very collaborative and bottom-up knowledge of organizations and then think about what sort of culture promotes that," she said. "[It's] the ability of people to feel free enough and supported enough and able to really participate very actively in what's going on in their company."

One can easily conclude that building a supportive and collaborative culture—and doing the work to sustain that long-term—leads to greater employee satisfaction, productivity and profits. But how does a remote working environment affect these efforts?

Is remote work a viable long-term solution?

For one thing, there are plenty of jobs in which remote work is not possible, because many functions simply can't be achieved from home. For example, Amazon warehouse packers cannot be remote and still do their jobs, whereas an AWS account executive would likely be able to complete vital tasks from almost any place with a broadband connection.

A Microsoft study of the effects of remote work on collaboration among information workers published by Nature Human Behavior revealed that the productivity boost from remote work might be short-lived. In addition, In a Future Forum survey of more than 10,000 employees, 41% expressed concern about how inequality among office-based, hybrid and fully remote employees may negatively affect work culture.

Remote workers may also miss out on some aspects of knowledge transfer, in which experiences from one set of people within an organization are transferred to and used by other groups within the organization. This kind of knowledge transfer often occurs informally between meetings, at office social gatherings or simply by witnessing others’ work when in the same space. This may ultimately lead to its own kind of proximity bias.

Bringing it all (work from) home

The remote work culture of the pandemic changed how people and companies approach employment. Companies that offer more flexible work situations have access to a larger talent pool across a wider geographic and socioeconomic area, ultimately creating a more diverse and equitable workplace. To put it another way, it’s expensive to live in many of the cities where large companies are concentrated, and that’s before we add in the expenses of commuting, office attire, childcare and more. In some places, having an office job is just too expensive for many people. But remote work changes that.

By switching to remote work during the pandemic, companies unknowingly removed barriers to entry and inclusion that hadn’t been widely recognized. That’s a good thing, and to the degree that it can be continued sensibly now, it should be. As they determine what balance to strike among remote, in-person and hybrid work, companies must look not only at job function but also at many aspects of performance and productivity data, employee engagement, job satisfaction, retention and other factors.

Companies are wise to allow some portion of their workforce to continue working remotely, leading to more satisfied workers and a more inclusive workplace. To avoid proximity bias, companies must assess all team members or candidates based on their abilities, not their location. Organizations can achieve this by using objective performance metrics in their evaluations.

As tax consequences come to light this year, layoffs are a weekly news item and expensive office buildings sit idle, I look forward to seeing what balance is struck in hybrid work that allows for productivity, engagement and scale in organizations. And I hope that these decisions will be data-driven—not based on who shows up at the office.