Name: SEE YOU AT THE WATERCOOLER?: A CLOSER LOOK AT THE RTO DEBATE
Uploaded: 2025-05-20
Duration: 19 min 55 s

As return-to-office pressure ramps up, Zillow is holding its ground—keeping all 6,900 employees fully remote. The company’s remote-first approach, known as “Cloud HQ,” has reshaped operations, boosted engagement, and quadrupled job applications. But is flexibility a competitive advantage—or a risky gamble? McKinsey’s latest research suggests what’s important is not where people work, but how companies intentionally design the experience to unlock innovation and impact. In this conversation, a McKinsey workplace expert and Zillow’s chief people officer explore the nuance—not the noise—of the RTO debate, offering data and on-the-ground insights from both research and real-world application. 

SEE YOU AT THE WATERCOOLER?: A CLOSER LOOK AT THE RTO DEBATE

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Thank you, Elizabeth, um, and now a message from our partner Gild on how it's helping people turn hard work into debt-free degrees and real career growth. I'm working towards the career that I want with no debt. I saved up for years to go to community college, and in two semesters it was all wiped out. Having something you worked so hard for vanished so quickly, it was heartbreaking. I found out Chipotle has this great benefit called guild where they pay for your education. So I got a job at Chipotle, signed up for guild, and now I'm getting a degree without paying tuition. Not only that, I've been promoted twice with Chipotle and guild. I'm just getting started. All right, um, so I edit a lot of stories about RTO, and you really need to take it from me that the reader interest is off the charts. We get love letters, we get hate mail, we hear about it one way or another. So show of hands who here has been part of delivering an RTO mandate to a workforce? OK, yep, lots of hands. OK. Who here has been personally traumatized by that experience? Still lots of hands. All right. Our next guests are here to help us understand how flexible work or lack thereof affects corporate culture and things like productivity, success, and happiness. Dan Spalding is the chief people officer at Zillow, which lets staffers work from where they want to, and Brooke Wettle is a workplace expert and senior partner at McKinsey and Company. So please join me in welcoming them to the summit. All right, Dan, I'm gonna kick it off with you. Um, Zillow has something called cloud HQ. What does that mean and what made you take the leap? Yeah, uh, first, thanks for having us here to share our cloud HQ story. We're, we're really excited and, and proud of it. Um, for us, cloud HQ is about enabling our employees to work where they work best, whether that's at home, in the office, or in the office sometimes. Now we call it cloud HQ because we wanted to take the politics of proximity out of the equation and start from a place that remote work isn't a perk, it's a business strategy. And so for us at Zillow, it's an intentional strategy of everything we do starts in the cloud. It's gonna be documented, it's gonna be written down, it's gonna be clear for our employees to follow. So whether they're working at home or in the office together. Uh, that they know the rules of the road and, and for us it's, it's, it's been really transformative on our, on our culture. Yeah, so you've had some notable results. I'm gonna go through them. 4 times the number of job applicants, 84% of employees say that they can be themselves at work, and there's been a 5% increase in women employees. What was your secret sauce to making this work? Well, we started from listening to what our employees wanted and what they clearly wanted coming out of the pandemic was a workplace that wasn't going to change the rules on them and a workplace that understood that we all learned different ways of collaborating, different ways of working. Uh, and, and so we started down, how do we figure out what the future of work is going to look like, and applying those learnings to building a really intentional strategy around how do you enable remote work that doesn't feel remote, uh, that that allows for in-person connection, allows for teams coming together, um, and. Those results that you just listed really speak for themselves. We're we're 5 years into this project. We've made a ton of mistakes, but we learned from them. And the best part, we're building this in partnership with our employees, so they're really motivated to come to the office when we ask them to come to the office versus feeling like we're forcing them there. All right, we're gonna get back to those details, but Brooke, I'd like to, uh, ask you, so McKinsey released a bombshell study earlier this year, and it found that across remote, hybrid, in person, the levels of burnout, intent to quit, effort and satisfaction were all pretty similar. So do work arrangements matter at all? Yeah, first of all, I've never heard of McKinsey report called a bombshell report, so thank you for that. Um, yes, it was, it was a surprising result though, to your point, we did find that, uh, irrespective of the model, we looked at hybrid, remote, in person, we found that burnout levels, exactly as you say, intend to quit were all similar and so it it it begs the question, right? Well, what's happening here? And if you look. Yeah and and this is what we did, we looked at 5 practices that we know are critical to workplace culture and health, and those are collaboration, uh, and connectivity, right? It's one kind of category innovation, and then you have, uh, mentorship and skill development and what we found is that employee perceptions of all five practices were extremely low. And most interestingly, leaders' perceptions of those practices were orders of magnitude higher, which got us thinking maybe the what question, what policy should we have is perhaps not the wrong question, but not a sufficient question. The more important question, the more nuanced question is how do you implement any kind of workplace policy? Right, and, and so we see study after study say that like workers really love remote options. They like really, really love it. So how do you square what we know to be true with the results from that study? Yeah, well, I think you know it's interesting and and and I've seen the same studies that talk about the preference that a lot of workers have for remote work or hybrid work. Those same studies though typically elucidate a number of other key factors that drive employees to stay or go, and those would be things like compensation. It matters, right? People like to get uh paid something that they think is a fair wage. Uh, meaning and work, especially that connection with the manager, right? Do I feel valued by by my team and my manager, uh, and development. So I would encourage us to take a more nuanced, a more, um, differentiated approach to thinking about this. And by the way, Dan and I were talking about this earlier, flexibility can manifest in many different ways. I work with a lot of manufacturing, uh, companies, a lot. Retail organizations that are building flexibility into in-person work right and we've seen the um the kind of the uberization of of different shift models um there's been some great innovation on that front it's in particular to support working parents right and we're gonna get back to that cohort in particular right Dan, we've heard about the big upsides to cloud HQ. What were some of the specific challenges you ran into, um, lessons learned along the way, stuff you wish you had known on day one. Yeah, absolutely, um, for us, the thing that we knew we had to figure out right from the start was the intentional time together for teams. And so from the beginning, one of the biggest challenges was how do you organize bringing thousands of people together across the year. And we had a lot of learning as we went through that process and what has resulted is we now have a really interesting team that sits at the intersections of a lot of bodies of work but really focuses on that schedule of bringing. Most of the company together on a fairly regular basis for that in-person collaboration. So whether that's scheduling, uh, planning the meetings, planning the food, planning the activities, things that that take a lot of time centralizing those activities, but then actually publishing we call it the cruise calendar of when every group across the company is coming together, where they're coming together, what the purposes are of those groups coming together, and then making that transparency. To the company really gives our employees the ability to understand kind of what's happening outside of the virtual world that they work in on a daily basis. So is this like a big party like 4 times a year? No, uh, it's not, but fun in person is a key goal for a lot of our retreats. Uh, employees want to feel connected like Brooke said, feeling connection to your manager, making sure that we're bringing people together for intentional training time, uh, has been a key part. Of the strategy, but no, sadly it's, it's not about parties. But what I will say is data, as you might imagine is quite important to us at Zillow. We've now used 5 years of data to really dial in for which types of jobs do people need to collaborate more in person. And so we set the expectation when we're hiring people, even though you may be remote and can work anywhere in the US, hey, you're gonna travel to one of our core offices 6 times a year. And, and we need you to be comfortable with that. And then there's other jobs that may get together only once a year and then frankly there are jobs where you may work your entire time at Zillow and only get together a handful of times. So we're trying to use a data oriented approach which really helps, uh, our, our employees understand when they're coming together and why they're coming together. OK, yeah, and I want to talk about optimizing different styles of work. So in person, hybrid, remote, should these look different, how should they look different? Yeah, I, I think they, they should look different, um, and one of the things that we've also been working with a lot of companies on is to acknowledge that a policy setting a policy is not a strategy policy is not equal strategy, right? So setting a policy that the next step is creating a framework, right, creating a set of guard rails right around how you want to implement that policy and that could be in person. It could be hybrid, it could be remote, and I think that's really important because we actually put a great deal of responsibility and, and I would say in some cases pressure on some of our middle managers to interpret a broad policy at scale that's very difficult to do and to the question you know if you're looking at collaboration uh you know, virtually versus in person, yeah, that's gonna look really different and and it's not all easy. In person either, right, it's not, you know, all parties and, um, you know, companies that are trying to prioritize in person work. In fact, many employees have come back to an office and I'm sure some of you have experienced that and been like this, this is terrible. Like I'm just walking the halls of people on on their different Zoom calls, right? Well, that is not fostering any kind of connectivity or collaboration so from everything from real estate to. How to structure work time and versus time for, you know, collaboration, which by the way is work too. All of these things need to be thought through and then there needs to be a process by which you upskill managers to really embrace and role model those practices, but that's not necessarily a skill set that managers had, you know, even 56 years ago, right? OK, we're going to do best case, worst case. So Dan, remote work, best case. Uh, best case, I think you're going to see a lot more companies adopting a cloud HQ model because employees are going to demand it over time. But what are the specifics of that best case look like? Schedule the Z retreats throughout the year, how many, any kind of special other tools? Oh, best case, I mean, you have to rethink everything around your employment policies. You have to think everything. You have to rethink everything around the employee life cycle, how you're onboarding your employees, how you're training managers to support remote employees that come together. And frequently, uh, and then how they're actually managing through the reality of, uh, a workforce that may be trained to do everything in person in the office and it may be traditionally inefficient ways into a culture where you got to write everything down to a culture where you have to be really clear and articulate in in your written thoughts as much as as as you are in your verbal thoughts and then planning of course when when groups are coming together and what you're going to accomplish when you're in person collaborating. Worst case remote. Worst case remote is, uh, people who are looking at it as a way to optimize solely for their personal situation. Uh, aren't committed to the organization, uh, and are, are not willing to adap adapt their style to the working norms of the team or the broader organization. OK, Brooke, in person, best case. Uh, well, I think I would start with a story, right? So how are you creating value for an in-person, um, kind of environment and how does that enable you to, uh, drive whatever performance outcomes you have that tactically means the CEO, the, the top leaders down into the organization know that change story and know why we are choosing that in this case the in-person. Working model versus not right so that's, that's the starting point. Uh, second, I think you need to get smart about how you're actually, uh, upskilling, right? Talked about the managers, but that goes all the way down to the front line if you will, uh, in a, in a in person working context so that's equipping them with things like, you know, meeting rituals, right? Uh, how do you, uh, start a meeting? how do you. End a meeting what are some of the common practices and norms by the way, a lot of these would be similar practices to, uh, virtual, but they would look and feel different in an in-person office obviously you're, you're gonna have a different kind of meeting versus virtual. Then I would think about things like data and analytics, right? You're looking at who's coming in are you leaving people out right that can't come in what's, you know, what's happening there you. Monitoring your high performers, right? uh, what's the impact? It doesn't mean that you should change your policy, but you might be curious about some of the impacts right as you fine tune and approach that. So those would be some of the things I'd look at and I mentioned real estate. I do think there are real ways and we, you know, heard a earlier presentation in which people are evolving their workspace to really live into some of the practices that we've been talking about collaboration, innovation, etc. OK. Um, you know, some groups really value flexible work more than others, caregivers, working parents, like it's really important to them for, you know, for companies thinking about what to do, do they have to sacrifice that group of people if they want to do in person? I, I look, I think, uh, it is hard to say that all caregivers are, you know, have one preference versus another. I think there are certain certainly groups of people that are prioritizing flexibility that is for sure, but as I said earlier, there are different ways to solve for flexibility and one thing I would say about this RTO debate, um, is that a lot of it really. Is about power right? and when can you do your work and how does that fit in with your broader life goals, right? We went through a period during the pandemic where I think we really were, you know, whether you were, um, at home in your office, I was at home in my office, my kids like pressed with their faces against the glass door like we all reexamined why we are doing work and what trade-offs we're making. And so I don't, I don't think you can unsee that and so as you think about crafting a policy, I think you need to acknowledge that, um, but also help people who need more flexibility also get in the flow on things like development right? One of the pieces of research we did a couple of years ago coming out of the pandemic that really stuck with me was around this notion of social capital and guess what, women. Have less social capital meaning fewer connections, fewer relationships, fewer diverse connections than men. Frontline workers have fewer or lower levels of social capital compared to senior leaders. We gotta give, we gotta work to level that playing field and so I think we need to acknowledge some of these needs, but also help people get to where they want to go um in in terms of their careers and development. I'm wondering, you know, for a company deciding what kind of work model they want to go with, what are some foundational questions they need to ask themselves at the beginning to make the right choice? Dan, let's start with you. I think one, how willing are you to listen to your employees and act on what your employees tell you? Uh, secondly, how willing you are to disrupt the ways that you work today, uh, if you're a culture that, you know, only values face to face interaction, uh, and believes that's the only way that that you can, uh, share and extract value from, from the relationship, then it, it's gonna be a challenge if your employees feel that that that they would be better served in driving innovation going in a different direction so you have to really be willing to take. Not the essence of what's important to you as a culture down to the studs, but the way that that culture shows up on a daily basis for your employees, listening to them, letting them architect it along with you, of course, with high expectations about performance and productivity that can't go to the wayside, but your employees will really help to to architect it if you give them the opportunity. Um, you know, we hear from a lot of CHROs, and you know they are the ones who give these mandates even if they disagree with them. Um, so I think a lot of people in those positions are like wondering how do I make the case, how do I show this to my CEO, what's the magic word, what advice do you have for them to, uh, make the best case they can to the powers that be? Well it's a great I I completely agree. I, I work with a lot of CHROs that are like if I get one more forwarded email about RTO from my CEO, right? I'm literally gonna just die. um, so I think it's a thing, um, I guess where I would start from is, you know, going back to what Dan said like let's actually put aside my own feelings and think about what does this business need to deliver value, right? Um, you know, I work at a large aerospace and defense company well they. Manufacture big things. They need to be in person and they wanted to make sure that there was parity right between the in person workers and those that were sitting in the corporate office. Great. So they, they have a clear thesis and they're gonna go implement that. I work with a large quick service restaurant, right? They also have a huge emphasis placed on in-person work, but they ultimately ended up with a hybrid model and wanted to cultivate development in that way, so. I think you really got to figure out, I like the down to the studs what are going to be the critical ways in which your people need to work to deliver that value and by the way, employee experience is part of that formula for value let's not forget that, right? And so that's where I would have the discussion with my, you know, fellow executives if I were making a case and then discern the policy and ultimately the strategy based on that discussion. All right, Dan Brooks, thank you so much for joining me. Bye. All right.