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A Hybrid Workforce in Transition: Exploring Microsoft’s 2022 Work Trends Index – Futurum Tech Webcast Interview Series
by Daniel Newman | March 30, 2022

On this episode of the Futurum Tech Podcast – Interview Series, I am joined by Nicole Herskowitz, Vice President at Microsoft. Nicole is responsible for the teams that drive the advancement of Microsoft Teams and Microsoft 365.

Our discussion covered some of the interesting data points from Microsoft’s 2022 Work Trends Index and what leaders need to do to adjust to this hybrid workforce in transition.

A Hybrid Workforce in Transition: Exploring Microsoft’s 2022 Work Trends Index

My conversation with Nicole also revolved around the following:

  • An exploration into how employees are approaching work and why the “worth it” equation has changed.
  • How organizations can balance in-person and remote work
  • How technology like Microsoft Teams can help employees find a balance in their work
  • New patterns we’ve seen emerge in the workplace since the beginning of the pandemic
  • A look into what is next for the future of work

The way we work is still in flux. Some people are returning to work in the office, some people are remaining at home. But one thing is certain, leaders have a lot of responsibility to make work work. If you’re interested in diving deeper into the 2022 Work Trends Index, be sure to listen to the episode and check out the full report online.

You can watch the video of our conversation here (and subscribe to our YouTube channel while you’re there):

Or listen to the interview on your favorite streaming platform here:

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Disclaimer: The Futurum Tech Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

Transcript:

Daniel Newman: Hey everybody. Welcome back to another episode of the Futurum Tech Webcast. I’m Daniel Newman, your host, founding partner, principal analyst at Futurum Research. Very excited about this interview series today. I have Nicole Herskowitz with Microsoft. She’s the CVP and GM. I believe I got that right. Going to give her a chance to make sure I absolutely got that right. And we’re going to be talking about Microsoft Teams, the new Work Trends Index that the company put out and an overall conversation about the state of this state of work, where we are today, where we’re going, the changes over the last few years, and I’m excited to have this chat. Nicole, how are you doing today?

Nicole Herskowitz: I’m great, Daniel. It’s great to be here. Thank you so much.

Daniel Newman: Did I get it right? I think I got the name, but did I get the title right?

Nicole Herskowitz: Yeah. Vice President. You gave me a bunch of other titles that sounded great, but you can simplify it with that.

Daniel Newman: All right. Well, in fairness, I don’t have to always be right. I’m an analyst. I just have to use words like I think, and then I can be wrong. But in all serious, you’ve done a great job, built a really significant business, along with a wonderful team. Of course, the pandemic has fueled a ton of growth, but you were there to receive that opportunity to be a really thoughtful leader in the organization, building out products and services that people need. And, of course, now look where you sit, over 270 million monthly active users, a platform that’s rapidly expanding and not only changing the way we meet face to face, but really the way people work. And that’s what I want to hopefully spend some of this time talking to you about.

Nicole Herskowitz: Sounds great. Let’s jump in.

Daniel Newman: All right. I love that. Let’s start there. I mentioned, Nicole, that you guys just launched this big Work Trends Index.

Fascinating. I wrote a Forbes article about it. Check out the show notes. I’m not going to spend too much time tooting my horn, but I read some of the blogs you guys put out, I read the report in its entirety, jampacked full of great insights. Do me a favor, give us the rundown first of the genesis of this report, where it came from and why you guys are doing it. And then I’d love to hear what were some of the big key findings that you had from your pass through of this.

Nicole Herskowitz: Absolutely. Yes, this is the second annual Work Trend Index report. And to just give a sense of what makes up the report, it’s a study of over 30,000 people in 31 countries around the world. We also do analysis of the productivity patterns within our product, so Microsoft 365 products, think Office, think Teams. We also gather data from labor trends from LinkedIn. And then finally we get insights from our researchers who have literally studied work for decades and do deep research, often even brain research to understand how work is evolving over time. There are a lot of really interesting insights from this recent report. One of my biggest takeaways from the report is that the people coming back into the office post pandemic are very different than the people we were just two years ago. And we often coin it as they now have what we call the great expectations of what they need from work.

They want to have that continued flexibility that they’ve received from remote or hybrid work, but they also really are looking at making career changes if work does not offer or prioritize their personal and wellbeing goals. So it’s a really interesting time for business leaders to really understand and balance both employee expectations while also staying focused on the outcomes that they need to drive for the business. And so to ground us on some of those top three trends that support that uber, great expectations of employees, there are three that are top of mind for me that came from the report. The first is there’s what we call a new worth it equation, people really evaluating their jobs to figure out if it’s worth it. Next, leaders really need to make sure that the commute to the office is worth it. Employees are trying to figure out when and why they go into the office. And finally, flexibility cannot mean always on. Over the last couple years, many of us have just been always on, always available, and we need to shift to a more sustain work environment.

Daniel Newman: So you mean 80 hour weeks are not sustainable for most of us. I said that we’re all like walking time bombs, we’re just ready to explode, because we’ve all been working so much. And of course there’s a lot of fun that we’re having and we’ve gotten some experiences and changes. Nicole, my son was only three when the pandemic started and I was traveling 47 weeks a year, because if you know the spiel for us analysts, especially when you’re working with a large swath of companies, 47, 48 weeks on the road wasn’t uncommon. So there was that momentary, and of course still a very appreciated, hey, I got to spend two years at home witnessing, but there was a point in the pandemic where I was like, “I’m literally just witnessing because I’m here working, watching my family grow so it’s like I’m closer than I was before, but I’m still not actually any more engaged. In fact, I think I might be working more.”

We’ll come back to that one, but I love those three trends. I have spent a lot of time talking about all of them. So I’m going to just run down and maybe hit on each one with you a little bit, give it a little color and then get somewhat of a take from you on it. Because I want to start worth it. You heard me mention the productivity. It’s absolutely skyrocketed. I think some of your data would also be showing that. You mentioned burnout. There’s now a great resignation, which is affecting every company on the planet, your organization and mine as well, where we’ve lost people just because we can’t simply keep up with everything that they want, need to get out of their work. Explain the worth it equation as the report referenced it, what you’re seeing going on with employees and then, of course, maybe how companies can think about making work worth it.

Nicole Herskowitz: It’s absolutely spot on. So as we’re saying, employees views have really changed and we call this the great expectations. What they want from work and what they’re willing to give in return is top of mind, and the data from this report really shines a light on this. Over 50% of the people are now more likely to prioritize health and wellbeing over work than before the pandemic. And as you said, these aren’t empty words, we’ve seen things like the Great Reshuffle, Great Resignation. 18% of the respondents from our survey quit jobs over the last year and over 50% of Gen Z and Millennials are likely to consider a new job in the next year. So definitely the younger generations are really still, I’s say, top of mind, figuring out that worth it equation.

So what we see is that business leaders really do need to prioritize culture and embracing flexibility to support the needs of their employees. Another thing that came out of the report were they’re like, “Beyond pay, what’s important from work? What are people or employees looking for?” And the five things that respondents said is they’re looking for a positive culture. They’re looking for mental health and wellbeing benefits. They’re looking for a sense of purpose or meaning from their jobs. They’re also looking for more flexible work hours. And finally, they want some more time off, more than two weeks of paid vacation a year. So knowing these things I think can help business leaders really think through how to both achieve the business outcomes they need. But while at the same time really provide the flexibility and benefits that employees are now looking for.

Daniel Newman: All I can think is as a Millennial, and I am, believe it or not, it’s not the hair, but I’m a really old Millennial. I was born in the 80s. My first book I wrote, I’ve written seven, I don’t know if I’ve talked to you about that or anybody out there, but I like to occasionally toot my horn, but the first one I wrote was called Millennial CEO. And it’s funny is the pandemic has definitely shined a light on some of these things, Nicole, but I also was thinking about we did a digital transformation index two or three years ago, and I remember trying to understand technology adoption inside of enterprises and it turned out that culture, more than any other thing, was the leading decision or leading indicator of whether a company would be able to embrace and adopt a new technology.

And so it was funny because I kept writing books about… Later on, I wrote more about technology, but every time I’d try to write about technology, I’d end up swinging the pendulum all the way back to culture, and this is just such a great index from your end to provide further evidence that this is only getting to be a bigger part of the decision process. I think things like going to almost unlimited days off is going to become a normal. And of course, I don’t know if you think like me, you lead a huge team, Nicole, but I always felt people, when I’m hiring them, I’m like, “We have the policy acts,” it’s whatever weeks a vacation, I don’t want to tell too much about what we offer. You’re going to have to ring us. But I usually tell people if you get your stuff done, go. If you want to go to see your family this weekend, if your stuff’s done, I don’t care.

So we work on that unlimited policy, but not really, you know what I mean though? But we are moving to that get it done within what’s reasonable for human beings, and then let them have that life balance. But it is hard because having us access these devices in front of us, it feels like there’s always the next thing to work on. So I want to run you towards the next thing you said though, because you said leaders must make office worth the commute. This one I love because I think at some point during the pandemic, everyone’s like, “Remote work is here to stay forever.” And by the way, they’re right. However, I think there was also this inclination to say that people would never go back.

We were looking at cities like New York City, we won’t need a city, everyone’s going to move to a farm and they’re just going to work at a farm with some broadband. And I think we’ve also found that’s not true. And so what I keep saying is that some companies are going full remote, some companies are going largely in person and everything in between. So what are some of the things that your report, your index, and of course just your instincts from leading a large team, say about making commutes worth it? What are you doing in terms of bringing teams back to the office? What is balance going to look like in the future as you see it, Nicole?

Nicole Herskowitz: I think you’re right. There’s not going to be a one size fits all. I think different companies, different industries will take different approaches, but I do think there were a couple things that I’ve seen personally, I’ve also seen coming from this report. One is that really being thoughtful and intentional about in person time is going to be critical going forward. We know that people thirst actually to physically connect and connect in person, those connections really build bonds that even if we’re not working together every day in person, when we have an opportunity to meet in person, we then can build relationships that help us sustain when we’re working remotely. And then the second one is that hybrid work will be a reality and so let’s design for it. Let’s build solutions, design our physical spaces with that in mind. And so if I talk about the first one first, being thoughtful and intentional about in person time, one of the things that I’ve even struggled with as we’ve returned to going back into the office is making sure that the days I go into the office, my colleagues are there.

And our report said that as well, 38% of hybrid employees say their biggest challenge is knowing when or why to come into the office. So really starting to be intentional about what days people are in the office or why, what type of activities you do in the office. Less than 28% of companies have even established a new type of team agreements to define these new normals. And so I’ve seen, from my team, but also from my customers as well, that they’re experimenting and they’re finding new solutions. Doing things like team Thursdays, where everyone comes in on those days so that they know their colleagues will be there, they can interact, they can have brainstorm meetings, really find ways to collaborate and know that their colleagues will be there. My team has started doing quarterly offsites. Actually our next one is next week.

We call them our team’s team weeks, and we just bring everyone together for a couple of days and we have a combination of social and work related sessions and a lot of collaboration time. And we feel that is an opportunity to really once again build bonds even when we’re physically distributed. So it’s that first, I’d say, area about being intentional about in person time. And then the other one I would just hit on at least lightly is that hybrid is a reality. We know that people are always going to be remote or there’s going to be a mix of some in the office and some at home. And so we often talk about in even the technology we build, we say design for the person not in the room. We equaled the playing field, when we all went remote, everyone was a square box on a video screen or on a laptop.

And now it’s how do we make sure that when we go into a conference room, everyone who’s remote is really participating and feels engaged and is showing up at the same, maybe, size from a video camera. Maybe the chat still continues to show up on the screen because that’s the meeting within the meeting now these days. So a lot of just ways that we can hopefully bring technology and new capabilities so that we continue to design for the people who are not physically in the room is something that we think is critical.

Daniel Newman: I’ve thought a lot about that too, Nicole. I like that one. I think I’ve talked to one of your partners, Polly, about that a little bit too, about equity now that you do have that physical room being mixed with people that are going to be at individual spaces, and then of course you’re going to have the call in people that are going to be on the road and in transit. And of course they’re nothing more than a call in number X, Y and Z. And it’s like they’re not able… Getting even a chance to chime in is hard, so figuring out the way to get those people involved, because you don’t want to start to minimize certain people’s ideas because, hey, Dan’s got a super high-res camera and his constantly stays in focus because… You know what I mean? I’ll spend the whole meeting talking and that’s not good for anybody’s business. So I love that. By the way, where are your offsites? Anywhere good?

Nicole Herskowitz: Well, we are doing a Microsoft campus actually. So we’re just doing on the campus.

Daniel Newman: The campus is cool, by the way. If you haven’t been up there, you guys have some very, very cool campuses. I was just curious because I was going to log in after this and see what kind of openings you got because I’m looking to get offsite occasionally. But, in all serious, actually I love that because I do think there has to be this thinking time too, group thinking in a positive way, because sometimes group thinking can be looked at negative, and individual thinking time, where do you do that? And I think you alluded to that, Nicole, but maybe it’s about scheduling an hour or two in your day, put it on the calendar, don’t make it unavailable, and think of that time, by the way, as just as valuable as meeting with your biggest customers, meeting with your employers and stakeholders, because our brains need to focus, because we all have our strategic requirements, the KPIs, the things that we’re after in our role that are going to be able to help us grow.

And if we’re not individually growing, we’re not going to be as helpful to helping our teams grow. So I like that you pointed that out and I’m really glad that the report highlighted that, because I’m hoping more leaders see that you got to give people time to flourish. You put water on the flower and you give it sun, it doesn’t grow in front of your eyes. It happens naturally over time. So let’s wrap up, I want to talk about flex and tech a little bit, flexibility technology. We’ll see if we can wrap this all up into one question. I might need to ask you two. I can’t promise you of the outcome just yet. But a lot of the data focuses in on what we just mentioned about finding balance and it’s, I call it, wellbeing meets productivity. So building on that first question, what are your thoughts and tips on finding that equilibrium for employees? Work doesn’t have to always be meetings, technology can help, but we need happy employees, we need productive employees, but we also need successful employees and businesses.

Nicole Herskowitz: No, no, it’s a really great question. When we look at our products and the usage of our products, meetings are on a rise over 250% since 2020. We’ve gone into meeting overload, and meetings don’t equate always to productivity. And what is exciting based on the latest data is that we’re seeing some new productivity patterns emerge. We’re starting to see shorter, more ad hoc meetings. We’re starting to see… You talked about carving out time for focus thinking. We’re seeing actually in our products that meetings are starting later on Monday mornings or wrapping up earlier on Fridays. At Microsoft, in my team, at the leadership level, we block Friday afternoons completely, no meetings. And really what it’s designed for is to allow people to either have focus time or take a long weekend and really try to focus on both what the individual needs to be productive and effective at work or get some time off.

So I think that’s one really key thing, not everything needs to be a meeting, and how do we really carve off time for that? The second is I think really powerful, which is moving more to asynchronous work. We are actually seeing chats up over 30% over the last year. And it’s really critical because there’s lots of ways that technology can help that. In Teams, more often than not, I send a chat or just review a recording of a meeting versus actually participating because being in a meeting all the time is exhausting and fatiguing. So using technology to have different ways to collaborate and communicate can help us be more effective employees and also just also embrace different working styles. So I suspect we’ll see a lot more of that as we move forward and we’re setting a lot of innovations to make that possible for our customers too.

Daniel Newman: And you hit on it, but you’ve definitely been very ambitious in building technology that enables, whether that’s been new modes that are more immersive, the together mode that took out some of that square, everybody’s a square, let’s create the classroom. I can only see how things like metaverse will help take that forward into the future when you get some lightweight appliance and you can be together. All of our avatars, Nicole, will be hanging out in our avatars, which I’m optimistic about. As long as I can make the appliance light enough, it’s as light as the glasses you’re wearing right now, I could see that being really heavily adopted. You didn’t mention this, but as an analyst I’m watching and what you’ve done with Viva, building technology that’s really not about more productivity, but that’s about more wellness.

It’s easy to get stuck at your desk for six straight hours call to call or legitimately you’re having to apologize like I have to use the washroom or apologize like I need to drink of water. It’s crazy. We just somewhere… And I like that I think some of the times when you and I met you started five minutes after, and I’m really hoping that those meetings start because you give yourself those five minutes, although I’m afraid that from time to time those just end up being five more minutes that you’re able to finish the last meeting.

So when I have people like you with your leadership and vision, I love to wrap these shows up looking into the crystal ball, into the future. The funnest part of my job is making guesses. And by the way, the funnest part is when I get to make guesses that are far enough into the future that I know I’ll never be held accountable [crosstalk], but we’ve now learned a lot. The pandemic has brought into focus, this whole business has become exponential. What do you think what’s next? What’s the future of work look like as it pertains to not just Microsoft and your business, but just as people and patterns?

Nicole Herskowitz: None of us have crystal balls, but I do think we’re in learning mode. I think it’s going to be messy. I think together we really will figure out and design the new world of work. But I do think fundamentally that flexibility is going to be key and that there’s not going to be this one size fits all because the labor market has really changed fundamentally. And I think about three things that will really shift going forward that really will impact work. One is around the physical space. As we mentioned before, employees that are going back to the office now, they’re just different. They have different expectations and physical space therefore needs to be used differently. And in this world of hybrid work, we’re always going to have someone remote, so we need to think differently about those physical spaces, maybe starting with the meeting rooms.

But I suspect that companies are going to just think very different about their square footage going forward and it’s really going to drive some changes as we think about work. The next one I think about is digital space. We’re going to continue to see new digital experiences emerge. You talked about some already, whether it’s things like together mode, which just help us connect in different ways, but even bigger, the metaverse, we have Mesh for Teams and really metaverse is coming to business, and it’s going to be real and it’s going to create new ways to work together in digital spaces. And it’s something actually that’s not that far off or crazy. It’s something that we’ve been working digitally for the last two years and now we’re going to have more immersive spaces.

We’ll use avatars, we’ll be able to solve things that are really hard like Accenture uses Mesh for Teams, for onboarding employees. They used to have to fly everyone to St. Charles, now they’ll be able to really get employees to connect and really join companies through digital experiences, which would be really powerful. And then the last one I’ll hit on is what we call collaborative apps. Once we get all these people and these collaborative experiences where they have different modalities for communication, they’re looking at how best they can stay in that flow of work and how you can bring in data, applications, intelligence, line and business systems all into one place so that you can make better decisions, so you can serve your customers better. And so I think work is going to become more seamless and more integrated for all of us.

Daniel Newman: I love that you hit on all of that at one time. I like that you mentioned the collaborative apps. I do see Teams becoming the center of the work experience, of course, for all Microsoft power users and organizations, and ideally Microsoft tends to touch every organization, so you have a lot of different ways to get it involved. But like I said, it’s more of whether you’re updating a CRM, whether you’re building an app, whether you’re trying to just look for data that lives within the system, instead of going from app to app to app, if Teams is where you start your day, how you chat to people, it’s definitely replacing a certain amount of email that we’re going to do, why not be able to pull it up, request a day off? But not just request it in an informal way, but be able to request it where it ends up in the HR system.

All that stuff is going to be tied together. And I really do like what you’re building there now. I do want to know, can I name my avatar? Can I be Danny Avatar? I want to have that. So I want people to ask the question when I’m podcasting, is that really him? Or is that his avatar? And so everyone says you need a doppelganger, you need another person to allow you to do more podcasts, and I’m Danny Avatar, that’s who I want it to be.

Nicole Herskowitz: We’ll work on that with you.

Daniel Newman: We build it in Mesh.

Nicole Herskowitz: I love it.

Daniel Newman: I will try. Nicole, this was a lot of fun. I really appreciate you joining the show. I’m going to ask you to come back. I can’t promise you when, but it’ll be probably sooner than you’re looking for, but so many great insights here. I had a lot of fun. And like I said, I imagine the evolution of Teams is only going to continue to happen and be more faster, more prevalent. More faster. It’s going to be faster and more prevalent than it ever has been in our lives. So making up words, having a good time, Nicole, thanks for joining the show.

Nicole Herskowitz: Thank you so much, Daniel.

Daniel Newman: All right, everyone that tuned in. If you liked what you heard, please hit that subscribe button. Look down in the show notes, I’m going to put some information so you can follow Nicole on Twitter and other places where her profile is public, and then of course also gets you the Work Trends Index so you can read that yourself. Lots more interviews on this channel, so, again, love having you here. We appreciate you, but for now I got to go.

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio