Remote and hybrid work are enduring legacies of the pandemic for many businesses and employees.
"What began as an emergency response to the COVID-19 pandemic has become a durable feature of the modern labor market," according to a new paper from the National Bureau of Economic Research. "By 2026, roughly 100 million employees in Europe and North America worked schedules that combine home and office days. This shift creates large potential gains. Remote work can reduce commuting costs, expand worker flexibility and widen firms' access to talent, with particular benefits for workers facing commuting, disability, care or scheduling constraints."
However, this flexibility comes with tradeoffs.
"Many interactions that support coordination, learning, mentoring, problem solving and attachment to the firm occur informally and repeatedly through face-to-face contact," the report said. "When employees are no longer routinely together, these interactions may weaken."
The challenge for employers is how to strike the proper balance between remote and mandatory office time The bureau conducted a trial comparing fully remote work with requiring employees to work in the office one day each month. Researchers reached three conclusions.
First, working together in the office one day a month raises productivity. The effects build gradually, remain visible after the final office visit and are not accompanied by a deterioration in service quality. Customer ratings and internal audit scores remain stable, suggesting that higher output reflects greater efficiency rather than a speed–quality trade-off.
Second, evidence points to interaction, learning and feedback as likely mechanisms. Randomized seating assignments generate new peer links that persist beyond the office day, and treated employees report more regular managerial feedback, more effective team communication and stronger cultural fit. Monthly office days partially restored forms of workplace learning and support that otherwise were limited in the fully remote setting.
Third, monthly office days improve retention. Attrition accumulates more slowly in the treatment group, and the gap remains visible through the end of the observation window. These gains are economically meaningful, because the policy reduces the selective loss of higher-performing employees, an important margin in settings where onboarding is costly and service delivery depends on experience.
"The broader message of our paper is that remote work need not imply isolated work," the paper said. "This issue extends beyond our setting. Prominent remote-first or location-flexible firms, including Airbnb and Dropbox, already combine remote work with periodic in-person gatherings. Yet there is little causal evidence on whether such light-touch colocation policies improve workplace outcomes. Our results suggest that even limited, well-coordinated in-person contact can strengthen communication, productivity and retention without requiring a return to a traditional office model."
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