Remote work is a big, divisive topic right now. Some think it’s the future, while others think it was an experiment gone wrong.

But it’s also not the only way to attract top talent. And the equation for doing so has only gotten more confusion as a myriad of trends intersect, from layoffs to emerging technologies like AI.

So how can companies navigate this storm and truly attract the talent that matters? Listen in to find out.

There's not a lot of increase around why should people come and return back to work.

And is it return to work or return to office?

If it's 47% that want something, 53% have not listed that as something very significant.

We're probably at the point now where we need to bring in the nuance.

Organizations that can be transparent to say, that's just not something we can provide, may actually even retain their critical talent a little bit longer.

They're effectively paying for people to be on site, even though it's more expensive for them to have people on site a lot of times.

Remote work is a big divisive topic right now.

In fact, some people think it's the future while others say that the pivot to full-blown remote work was quote, 1 of the tech industry's worst mistakes.

How can so many smart people have such different opinions on this topic?

Well, remote work is actually just 1 of the many facets that come into play when you're trying to attract top talent.

And quite frankly, that equation has only gotten more confusing as several trends intersect, whether it be layoffs or emerging technologies like AI.

So how can companies navigate this storm and truly attract talent that really matters?

And as they try to do this, and they make changes to company policies, how can they tell if they're actually moving in the right direction?

Let's say a company changes the policy and several people leave.

Now is that unwanted attrition or is that the company culture becoming more aligned?

Today we have 3 people from different perspectives joining us to discuss some of these questions.

He is the co-founder of Keep Financial, which is a tool designed to help you enhance engagement, retention, and performance through vesting cash bonuses.

She's an advisor and leadership coach that has led several people in culture teams from startup to enterprise.

So you can bet that AJ has a pretty unique perspective on what it means to attract and retain top talent.

Hung is the writer and founder of Recruiting Brain Food, which is actually 1 of my favorite newsletters.

All right, I am so excited to dive in, but before we do, I just wanted to share that This episode was actually inspired by some of the unique perks that I had never seen before until I joined A16C.

That includes a full body health scan that we get from QBio or 5 weeks of full firm shutdown.

5 weeks where the whole firm is shut down.

So if you're hearing my voice, if you're seeing my face on screen, I'm actually on vacation.

As A reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund.

Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast.

For more details, including a link to our investments, please see a16c.com slash disclosures.

Okay, so I feel like there are so many trends intersecting right now.

There is a return to office or in some cases people being forced to return to office.

And so I guess just to kick things off with so many things happening at the same time, what are each of you paying attention to?

What's really grasping your attention when it comes to this question of what it takes to attract talent in

Yeah I think you're right to mention all of these trends.

I think they call it poly crisis these days, don't they?

And I don't think you need to be like any sophisticated academic to be aware of it.

Just being kind of in the washing machine that's been the last 3 years can tell you enough about sort of how much these trends are sometimes in tension, sometimes they're accelerants, sometimes they're suppressants and they're all just moving us around.

And the overall sense that most of us have, if we're truly honest with ourselves, is this sense of discombobulation, you know, this sense of, oh, I'm not sure, previous confidence that we had prior to 2019, 2020, I don't think any of us are as confident as we were back then, because we all know that we're in a world that is in the cusp of these huge changes.

And you've mentioned a few already to the geopolitical angle, hostile de-globalization, the cost of living crisis, record inflation, the huge shift that COVID pushed everyone to remote and now push everyone back.

And then if that wasn't enough, you know, only 6 months ago, open AI launched ChatGBT, completely changed everything again.

So I think all of us are thinking, okay, it's gonna be completely chaotic.

It's thinking about how do we kind of build a resilient business against unpredictable change.

And I believe it's actually an inflection point for us.

It's an inflection point for those that are thinking about ways to attract talent, thinking about ways to actually even help talent self-select.

And I think a lot of that is going to be grounded on what assumptions are we questioning?

So with the wave of all of these things that are happening, it can be very easy to kind of mass, you know, collide into that and say, OK, all companies need to be doing this now or most companies need to be doing this now.

I actually believe that where you want to land should be around what assumptions are right for the organization that you are trying to steer forward?

You know, when I think about it from an employee's perspective, and by the way, this varies from industry to industry very significantly.

I think a lot of times we think about the tech industry only, and many industries are still going through a lot of the pain that we all saw in health care, transportation, logistics, other areas are still seeing incredible challenges, hiring employees and retaining them.

But getting back to the key thing I'm thinking about is how do you create some stability in the system, right?

When you have all of these things happening, you know, macroeconomic climate, when you have, you know, AI creating questions, I think folks are looking for stability more than they were necessarily thinking about a year or 2 years ago.

And from an employer's perspective, that's frankly what they've wanted forever.

Given so many things going on, are there any specifics that you're seeing, whether it's in data reports that you're reading or just anecdotally what you're hearing?

Like Hong, you have so many readers of your newsletter.

I think the remote revolution, so to speak, opened a lot of people's eyes on this.

And we've got multiple data points to suggest that companies that are operating a remote first policy typically have a significant advantage against companies that do not.

And this pertains to, you know, the if you like quote unquote top talent.

Let's talk about them in terms of, you know, the software engineers, the high demand people that we've always been looking to recruit.

I think VMware, for instance, did a sort of before and after comparison in terms of their time to hire when it comes down to whether they're doing on premise hiring pre-COVID period and then they switched to remote hiring and they reduced their time to hire by 100%.

So they went down from basically half the time.

And in fact, not only through speed of processing candidates, but also through reduction of assessment load, because you know, the logistics simplicity of doing a zoom call compared to in person interviews, having to configure everything with the idea that this person, you know, may never come on site, suddenly unblocked a lot of sort of other things they felt they had to do.

I still think it is the case that the job seekers would ideally prefer a remote or at least a flexible working environment.

And there is a bit of a tension at this point where some companies are rolling back the remote policies or at least they're starting to put additional conditions upon it, which you can see it's kind of a mission creep back to the office.

But I think companies are trying to do this now maybe because they feel a bit more confident.

Market has to swing away, if you like, from the candidate control.

And maybe now the companies are seeing a little bit of an opportunity to claw back some of what they may have always perceived to be an overly permissive position when it comes down to, you know, working mode.

Thinking about your question, what trends, what data, what things we're seeing, what some anecdotal things, fractional work has hit the knowledge workers.

And I think if you think about top talent, you're seeing a lot more folks really wanting to take control of the things that they are working on.

I think there was a study and a research that was done that around 65% of folks would actually choose a job with slightly lower pay if it meant working at a company that aligns with their mission or their personal values.

And that's specifically true, I think, for the new generation that's getting into the workforce.

They want the ability to be able to say, this is the stuff that I'm working on and it is creating impact.

There is more of that type of critical thinking that is happening, I think, in the next generation of the workforce.

What I'm seeing, at least, are organizations that can provide ways in which to engage their current workforce to say, okay, what are the things that are truly impactful that you want to lean into?

But also, organizations that can be transparent to say that's just not something we can provide may actually even retain their critical talent a little bit longer, at least.

And I know that's a little bit different than what you'd normally see like a point A to point B.

But at least what I'm seeing is the more transparent the conversations you can have, even in hiring, right?

I think years ago it was like, come join this company, really awesome benefits.

Here are all the things you're going to experience.

Here are all the perks." And I think the companies that are going to win, and I tend to be a little bit more future-oriented on this and also curious, this is what it means to be at this organization.

And here's what you're going to be signing up for.

And if you can sign up for that, we're in for a wonderful road ahead.

And if you can't sign up for that, we may just be frustrating each other for the first year that you're here.

Those are the maximum things that I'm seeing is I think the workforce, especially those that are knowledge workers in the advent of AI coming into place and disrupting a lot of that kind of knowledge work.

You know, folks are starting to think about more fractional work, side hustles, things they want to lean into that are closer to what they're passionate about and what they want to contribute to.

1 is what's actually in the best interest of the organization as well.

You know, can they get the performance they want?

And I think, you know, the argument is yes, or productivity is great and, you know, and all these things.

But I think some studies are sort of coming out, Meta is sort of saying like they've noticed that people are back at the office 3 days a week are more effective, or if they've already been in the office for a while before they went out on remote versus native remote, you know, because they joined the company, you know, right during the remote phase.

I don't even know if that term has been used, but I think about it from that perspective.

Look, if you give an employee an option that says, hey, would you like to work from home 5 days a week with the complete option of coming into the office or not like who's not going to say okay they're going to say okay.

People talk about performance and the productivity of people in the office the thing I don't think that is very clear right now unless you all have information on this is what is the ultimate impact going to be on attrition on retention for people who are native remote or significantly remote now.

I think we're too early in this process to know whether those people are still going to feel the connectivity to the organization or whether they're going to feel like they can just you know leave sooner because they haven't made the personal connections that as Strong as they made the personal connections when they were in the office all the time So that's like 1 body of questions that I have and I think about the other thing is about all these different parts.

What's important to attract, you know, the kind of workforce that you want.

I remember the old adage that used to go between my parents where my mom would say, she's going to the store.

And my father would say, yeah, but it's 60% off.

And, you know, the fact that there's still cost and expense associated with this stuff.

You know, a lot of the statistics we get back go 63% of employees want that, 47% of employees want that.

We need to think about the reverse of those percentages, which mean that's

that wants something, 53% have not listed that as something very significant.

So my personal perspective on this is something we're working on is completely flexible compensation benefits package where basically people can get exactly what they want from a comp and benefits perspective to you know sort of employers to size in employees to personalize it because every 1 of us on this podcast right now is different.

We're all going through different things in our lives.

That's all going to shift 3, 6 months from now.

Systems out there should be flexible enough, especially in this age of hyper-personalization, to allow employees to make decisions today and then make slightly different decisions a few months from now without it negatively impacting the employer.

I mean 1 thing that comes to mind there is the fact that we don't really have that much data to your point about who top performers are and what they prefer, right?

Because we kind of give everyone the same set of benefits and I'm sure some analysis could be done across companies but to that end You can imagine how, to your point, Rob, kind of any benefit could be seen in a positive or negative light.

Like let's just use the wide swath of benefits that Fang offers.

Well, if you're offering nighttime meals, you could imagine that, oh, okay, people are gonna work harder and later.

You also might imagine if you're offering meals and massages and all of these kind of auxiliary benefits, you may just attract talent that wants to relax and not work very hard, right?

And the same analysis could be applied to a lot of benefits, right?

Palmer Luckey says that he offers his employees tools and technology for all of their side projects, not just their work projects, because he thinks that'll attract ambitious people.

But again, you can imagine how someone might position that as, oh, I'm actually funding people's next company, not my own.

But you know what I love about that is it's a principles-based approach to providing a benefit.

He's saying, I'm not telling you what to work on.

I'm just saying that I'm going to provide you with the platform, with the tools to do the thing that is exciting to you.

And by the way, it might be that, you know, my kid's school wants to do an auction and I want to run the online auction piece of it.

I think that's the key is allowing people to be able to, you know, individualize and be their authentic selves.

And I think that's a really big part of what culture is.

Rob, I can't agree more with what you just said there.

And also, I think there's a lot of wisdom that can be pulled from, I mean, it's graduation season right now.

There are a lot of new folks that are graduating that are wanting this kind of work.

I think A-Team actually published a really wonderful data set around what new grads are actually looking for with their new employers.

And some of the standout pieces there are really about the terms, Rob, that you had discussed and I think you had offered earlier too, which is around that flexibility, that personalization.

And then the thing that I'm adding along is, okay, what is it that is going to resonate with them to be able to create more impactful work?

For them, career growth is impactful work, not the ability to, you know, go up a rung on this non-existent ladder that has existed for decades.

And so that actually gives me a lot of hope for the new generation, but it also is going to take us being able to educate folks that are currently in the workforce to receive that kind of mindset.

The fact that companies are thinking about how they fund other things outside of the work that people are currently doing in their organization is showing really interesting signals.

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You mentioned the younger generation and it does feel like there's some data showing up that, you know, as all 3 of you have alluded to, this is not a monolith.

And it does seem like certain generations maybe respond to different perks or different types of cultures.

Let's just use remote work as an example.

Can you really offer an organization where, you know, some people get to work fully autonomously and others get to go into the office.

Are you able to break down an organization so that you can kind of offer different generations what they're looking for?

a matter of certain companies just needing to orient around certain group kind of targeting Gen Z while others targeting maybe an older generation.

How do you think about attracting different folks with so many different competing interests?

KING 1 provocation that I have is, do organizations believe that remote work is a philosophy for the organization or for specific roles in the organization.

People are talking more about remote works for everyone, for the whole entire company.

How can you get really strategic and say there are specific roles in the company that can be remote.

How does that manage from a fairness and equity perspective?

1 other piece that is coming up as you ask that question is around how are people communicating the roles?

Because again, if you go to a company, you think about the Atlassians and the Automatic, you know, who runs WordPress, they were remote way before remote was a thing.

were remote when it was more stigmatized as a thing.

And so I wonder how they're presenting things now with the learnings based on having come from pre-COVID remote to post-COVID remote.

And I think there's a lot of wisdom there we can pull.

Great that you mentioned the likes of automatic and other companies like Basecamp and basically companies that were remote first pre-COVID.

So they made a conscious choice to do so rather than be forced by external circumstances, which is the vast majority of everyone else.

And there were some interesting features as to how they did that.

I mean, firstly, they did in fact target experienced workers.

A lot of remote companies did not hire early entry talent because of exactly the concept of this person needed to have control of their home work environment, so to speak.

So they couldn't be living with parents or in a busy flat share with you know student college or whatever it might be.

They also needed to have the experience of working independently without the proximity of management and all of that kind of pointed towards someone who is basically a senior contributor that had experience.

And again, if you look demographically at the types of people that are most pro-remote, the remote evangelists, so to speak, they are all of that demographic.

They are Individual contributors who have established a level of expertise that have built up some social capital, built up some capital capital so they can go ahead and provision their home office in such a way that makes sense for their lives.

Typically they even people that are quite young families take care of and think about and that kind of adds a plus plus plus to the concept of having that control at work.

You speak to young people entering a workplace for the first time, that is the last thing they want.

There's a great bit of research by a company called Isons who basically conduct an annual survey for graduates in the US and elsewhere as to what they desire.

And this is the first time when I encountered this kind of gerontocratic view of what remote was.

It was very clear that someone who was an early career person did not want remote.

It was something that you know they thought about yes no they literally didn't want it.

They wanted the office because they wanted the learning.

They want the acceleration of learning through being alongside more senior people and they wanted to get out of their domestic situation.

We're just living with their folks or living in a busy you know crowd shared place.

So AJ is completely right and I think Rob you mentioned earlier about this idea that you know we've treated things monolithically and sometimes we need to make generalizations of course in our type of conversations.

But we're probably at the point now where we need to bring in the nuance because what is positive for 1 group of people is negative for another.

And when it comes to things like building companies and designing an organization we might need to make choices as to which demographic that we service.

You know if we are absolutely a remote first company we are probably optimized as an employer for a senior individual contributor that has already achieved a certain degree of material comfort in order to provide for home working has social security in the sense of social capital.

So in other words, they don't feel they need to come to the office in order to make friends.

I went to an event last year in Barcelona and I was actually stunned by a comment.

This is by the way at 2022 was like peak remote evangelism.

There wasn't even a question mark that was a bad idea.

Apart from 1 guy who stepped up and said I hate remote and everyone just stuns like who is this guy who say this heretical claim.

Turned out he was from Latin America, I think, Venezuela or something.

And he said he was a recent immigrant to Poland, a random town in Poland.

And he said it was the worst thing ever to be remote from the office because he had no friends, he had no social contact, he literally had nobody because he was a new person in the country where he had no social contact, no social capital and he actually walked 1 and a half hours into the office every day in order to interact with the 2 or 3 people that might be there.

And when I heard that story, it started opening my eyes and realized, you know what, we have to consider the social environment, the social capital that everyone has and the higher social capital you have, the more confidence you have not to have to make those friends at the office.

But if you're a younger person relocating, you're an immigrant, you've gone to a different place, you probably want to go in and meet your work colleagues.

It's funny, my anecdotal, not scientific surveys have suggested that there's become this expectation for younger folks to have the right to work from home.

I'm not saying they want to, it's just is something that is kind of this, you know, an alienable right that they have.

And it brings up whole concept of, you know, should it be a privilege versus a right?

I think when you talk about people that have built up social capital and things like that, it sounds a lot more like it's a privilege that somebody's earned over time and they're able to take advantage of it.

My last company is a company called cabbage.

I would have been that guy on stage in Barcelona back in

who was refusing remote work because it was something that was being requested by a lot of people.

And I was very committed to what I thought was in an office culture we had built that was really special and really created these authentic connections between people.

Now, we ended up doing 1 floating day a week that people could take advantage of after you had been with the company for some period of time a year or something like that.

So, that's how we actually addressed that.

And then we moved into the pandemic, And I was blown away by the level of productivity of the team.

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Inside the 2023 Talent Tsunami: Layoffs, Remote Work & More