New report finds employees perform their best when working virtually — and senior leaders agree.

As the pandemic recedes in the rearview mirror, CEOs seem to have made up their minds: it’s time to get back to the office. We’re already seeing the lowest levels of remote work since pre-Covid times, and nearly two-thirds of CEOs believe there will be a full return to office by 2026. But if these executives view return-to-office (RTO) as a positive trend, they need to look more closely at the data. That’s exactly what Thumbtack did, with a market survey of over 1,000 people* who currently work in a remote job after previously working in an office setting.

The results of our study affirm our commitment to a virtual-first way of working. Among people who’ve worked in both types of environments and understand their pros and cons, the consensus is clear: virtual work is better for productivity, job satisfaction, mental and physical health, and family dynamics.

This reality can make RTO a costly proposition: the average virtual worker (56.1 percent) would require at least a 30 percent raise to consider returning to an office setting, and 16 percent would need to make at least 50 percent more. Otherwise, they’re likely to seek out an employer who shares their priorities. And for many, virtual-work is a must have: 36.5 percent of workers and 34.6 percent of senior leaders said they would look for a new job if virtual-first work was no longer provided. It’s clear employees and leaders alike have strong preferences when it comes to how and where they work, and they’re willing to take action if they’re not being heard.

Here’s what we learned in our study, what it means for our business — and what it can mean for yours.

Flexibility is better for business

We know the success of our business depends on the success of our people. Yet in the eternal tug-of-war between virtual and in-office workplaces, decisions are too often made without a true understanding of what helps people be most effective.

A common rationalization behind RTO is that flexibility may be a nice perk, but it comes at the expense of productivity. This is off-target. While it’s true that employees favor virtual over in-office environments, the full business impact goes much deeper than work-life balance. Consider that 74 percent of workers say they’re more productive with virtual work — and 75 percent of senior leaders (VP and above) feel the same way. Employees at all levels from individual contributors through senior leaders view virtual environments as superior because they can stay focused on quality of work without the distractions of office politics and “face-time culture.”

While some view in-office work as essential for career growth, the data shows just the opposite. 69 percent of workers at virtual companies have sought out additional professional development opportunities to help them improve in their role. 44 percent use the free time gained from working virtually to increase their productivity or learn a new skill to advance their career.

P.J. Linarducci, Thumbtack’s Chief Product Officer, has led teams both in-office and virtually and believes the benefits of both virtual work and in-person collaboration are clear, yet too many companies push “hybrid” models that offer the worst of both. “Hybrid models restrict hiring to specific locations and force regular commutes, just to have employees video conference with colleagues at home, or have mixed video/in-person meetings that no one benefits from” said Linarducci. “At Thumbtack, we’re committed to leveraging the best of both approaches. We tap into geographically diverse talent pools and offer the daily convenience and flexibility of virtual-first work. But we are deliberate about using face-to-face time for what it’s best at: relationship building, creative collaboration, and alignment.”

Still, it’s important not to take the benefits of flexibility for granted; simply telling employees to stay home won’t produce results. It’s important to invest in building a new working model from the ground up. New norms and tools should be chosen with intentionality to maximize the benefits of virtual work, such as flexibility, equity, and effectiveness. And you can maximize impact when virtual work is complemented with the relationship-building, collaboration, and connection of in-person gatherings. With the right approach, it’s possible to have the best of both worlds.

Virtual work builds well-being — at work and at home

More than ever people want to work for organizations that recognize their humanity and understand life roles they play outside of the office. Virtual work helps companies become more attuned to these needs, show empathy, and provide a work experience that makes a material difference in employees’ lives.

And it goes beyond doing the right thing, this responsiveness and personalization can drive a meaningful business impact.

The freedom to work in their own way is a key factor, as well. More than half of virtual workers said that the ability to personalize their work environment was a reason for their increased productivity, while 48 percent mentioned working during their most productive times of the day, even outside traditional work hours. Able to tailor their experience to their needs, 47 percent said that the home office environment allows them to concentrate better.

Healthy employees are essential for a healthy business. The mental and physical benefits of virtual work start with a more manageable way of life. 60 percent of these workers save over 5 hours per week by not having to commute, and 32 percent save more than 10 hours — replacing the stress of traffic with opportunities to take care of important personal responsibilities. A full 91 percent report at least one way virtual work has positively impacted their housing situation, including 33 percent who credit virtual work with their ability to own a house and nearly half with living in a more desirable location.

Virtual work also helps employees take better care of their bodies and minds.

When people work virtually, they’re less likely to be forced to choose between family and career, a sentiment shared by 81 percent of respondents. This is especially valuable for the 64 percent of respondents with children:

• 81 percent say they’re a better parent
• 80 percent are more available for important parenting moments
• 75 percent spend more time with their child(ren)

Making the right choice for your business and your workforce

Every business is unique — and every organization needs to make its own decision about its work environment. The large brand-name companies who advocate most vocally for RTO can have outsize influence in the discussion, but their needs can be quite different than other types of companies.

For some companies — in particular, those at an early, pre-product/market fit stage — the benefits of in-personal collaboration can outweigh those of a virtual setting. But for most others, including companies driving growth and scale, virtual work offers paramount advantages. One of the most important is the ability to hire and retain top talent by offering the flexibility workers prefer. Companies that fail to meet this expectation risk the cost and disruption of increased employee churn.

Virtual-Work Isn’t the Reason Your Employees are Disengaged

At Thumbtack, we’ve seen firsthand the difference virtual work can make as employees across the country take ownership of their setting and their calendar. Our team members feel seen and supported as individuals, and they repay our commitment to flexibility with dedication to the goals and success of our organization. At the same time, we’ve seen the impact in our numbers with the number of applications per job close to quadrupling since we introduced our virtual-first way of working.

Virtual work can make a convenient scapegoat for low productivity or disengaged workers, but the fault more often lies with culture or management. We believe you have to design a way of working led by your values, be willing to listen to employees, and make changes along the way to ensure you are enabling the success of your business and employees. For Thumbtack, that means continuing to invest in our virtual-first, not virtual-only culture by combining the benefits of working remotely with the connection of in-person events.

In the year ahead, companies that force employees back into the office will likely experience decreased employee engagement and increased attrition. After getting a taste of remote work and having it taken away, employees will seek out companies that provide the flexibility they desire.

The keys to business success are a clear strategy and goals, exceptional people leaders who empower their teams to hit ambitious goals and highly engaged and motivated employees. This will lead to companies being oriented around goal setting, execution management and accountability. However, standout companies will double down on investing in the development of their leaders and managers, who are the linchpins of teams, as well as the overall engagement of their teams. We believe the best way to do that is by offering a working model that serves the needs of employees and the business.

For companies that take a thoughtful approach, a virtual-first workplace can deliver a powerful business impact while alleviating key challenges around recruiting, retention, productivity, engagement, and more. Beyond our work product, a flexible work experience is better for our bodies, our minds, our relationships and families, and our communities. Why turn back now?

*Survey methodology

This sample of 1000 US adults (aged 22 to 65) was surveyed between October 5 and October 9, 2023. All respondents are (1) currently employed for wages in a professional or knowledge-based job and (2) shifted from working fully in-office to working at least mostly remote, confirmed by both consumer data and respondent self-confirmation. DKC Analytics conducted and analyzed this survey with a sample procured using the Pollfish survey delivery platform, which delivers online surveys globally through mobile apps and the mobile web along with the desktop web. No post-stratification has been applied to the results.