Dropbox workers were treated like royalty when they showed up to work before the pandemic.
At the company’s San Francisco headquarters, an award-winning cafeteria served breakfast, lunch, and dinner with a daily selection of international cuisine at no cost to employees. The gym featured two Peloton bikes and a yoga room. There were also a library equipped with comfortable chairs.
This was in the past. It’s not there anymore. This includes no meditation or yoga room. A coffee shop has replaced the extravagant cafeteria with a café that serves free coffee, tea and pastries as well as grab-and-go meals. Employees were given no desks and the company offered sublease of most of its downtown San Francisco office space, which covers 700,000.
Dropbox’s most fundamental change is the fact that its 2,700 employees no longer use the office as their daily workspace. In April 2021, Dropbox launched Virtual First. This program requires employees to be able to work remotely at least 90% of their time. They are also expected not only do so for occasional meetings in an office that was designed for brainstorming, educational sessions and other fun activities, such as happy hours.
“This is a very important dot on the timeline of the shifting nature of work,” Drew Houston, CEO of Dropbox, tells TIME. “We’ve always believed that companies that give flexibility will outperform, out-attract, and out-retain the companies that don’t.”
Drew Houston, CEO of Dropbox
Working virtually isn’t just an option. At Dropbox, the cloud-computing company’s leadership says, it’s the way forward. That means most Dropbox employees who want to live well outside the high-priced San Francisco Bay Area can relocate— and keep their jobs. An annual $7,000 work at home allowance is available to each employee. This can cover everything, from childcare and gym memberships to new chairs and desks. It also means all events must fulfill a specific set of criteria before being scheduled. On top of that, employees are granted about half of each workday to focus on their own Dropbox work projects, or even on their own personal needs, such as a doctor’s appointment for a child.
Dropbox is changing the perception that an employer-maintained workspace should be the main place for work in the wake of the post-pandemic crisis. Dropbox announced in January 2021 a 11% decrease to its worldwide workforce. Houston calls this his hardest-ever CEO decision.
An array of companies—many of them in the tech industry—are also adopting virtual or hybrid work plans including Apple, Microsoft, Spotify, Slack, and LinkedIn. Nearly half of the nation’s tech workers—48%—are now working remotely full-time compared to 22% before the onset of the pandemic, according to a survey by research company Morning Consult. Five-sixths of them are not interested in returning to work.
“The pandemic really hit a reset button on worker preferences for location,” says Joanna Piacenza, head of industry intelligence at Morning Consult. “In an employee-driven market, employers need to listen to them.”
Learn more How to inquire from your employer whether you are allowed to work remotely permanenty
Outside the tech industry, there’s less interest among workers in working remotely—but that number is growing, too. A survey conducted by Gensler (a global design firm) found that only 12% wanted to work full-time from home during the 2020 pandemic. However, that number has risen to 30% according to a Gensler survey at the end 2021.
“Each company and each worker needs to think about what’s right for them,” says Todd Heiser, principal and manager director at Gensler. Currently, most U.S. employers are in a hybrid mode, asking employees to be in the office three days weekly—or about 60% of the time, according to a Gensler survey.
Unwritten rules that used to require butts being securely placed in office chairs are no more. Most employees may not notice the new rule. It might taste, smell, and feel to them as though there were no rules. That’s forced companies like Dropbox to create some new basic guidelines. Houston views in-person contact as crucial. It will no longer be necessary and it will take place only occasionally at the new Dropbox Studios. Houston is also looking to create more off-site meeting opportunities.
“We’re trying to get the best of both worlds,” says Houston. “We’re giving our teams the flexibility to work from anywhere without being tied to the office.”
Some things about the new virtual office at Dropbox required extra planning—like how to make certain that teams can regularly communicate with each other at the same time every day. That’s why Dropbox developed “core collaboration hours” which requires members of each team to be at their computers—and available to communicate with all other team members—for a four-hour block each day. (That’s typically 9 a.m. to 1 p.m. Pacific time and 12 p.m. to 4 p.m. Eastern time.). That’s also when virtual group meetings are held. Four hours of the time are reserved for personal projects and sometimes personal needs.
Virtual work also requires inventive ways to encourage employees to meet up in person—particularly to meet other Dropbox employees who aren’t even on their teams. Dropbox Neighborhood was created by the company to give employees positive incentives for collaborating. In late spring, for example, when CEO Houston was visiting New York, he hosted a Happy Hour for New York City employees on the rooftop deck of a chi-chi New York City restaurant where more than 100 employees gathered—many meeting each other for the first time.
So far, most employees seem to be happy with the change—even if it means losing all the free food and yoga lessons. According to 2020 employees survey, 88% said that they prefer the ability to work remotely. A recent survey in the second quarter of 2022 found that more than three in four employees feel like they have more work-life balance under Virtual First, and 78% said they’re more productive working virtually. What many Dropbox employees seem to like best about Virtual First isn’t just that they rarely have to show up at the office anymore, but that they now can live anywhere they want.
Beauty Nazzaro, a producer on the Dropbox brand studio team, says it’s almost impossible for her to imagine working full-time from the office again. She and her husband moved to San Rafael from San Francisco, California, to be closer to their family. Their daughters are 5 and 2 years old.
Beauty Nazzaro was allowed to move and work remotely.
Nazzaro leaves the office at 4:30 every Tuesday to bring her daughter Naya to ballet. That’s tough to do from the office. She recently used the company’s Virtual First financial perk to purchase a new stand-up desk and some lavender diffusers to create a calm area around her new desk. This would not have been easy to accomplish in the office. And she really likes the monthly “wellness” days that are part of the new virtual policy, when the whole company closes on either one Monday or one Friday each month.
She does miss the things she loves about working, like Wednesday afternoon break breaks that Dropbox employees would take to come together for freshly baked cookies and to relax. “I get energy connecting with people and that’s harder in a virtual environment.”
Loyalty among employees
Dropbox’s changes have perhaps no bigger fan than Melanie Collins, the company’s chief people officer, who only recently returned from maternity leave. Collins moved with her husband, their baby and to Rye in New York, to be closer to family. Never mind that she’s currently the only Dropbox senior executive who lives outside of California. “I’ve never felt more loyal to a company in my life,” she says.
Dropbox would only help pay to move employees if they asked. This rule has been thrown out of the window. Now, employees can choose to move to wherever they want and Dropbox will typically help defray at least some moving costs, depending on the costs of living in the area you’re moving to, says Collins.
Perhaps that’s why Dropbox now has almost double the applicants per job post than it had before Virtual First. The 126% higher acceptance rate for job offers at Dropbox than before Virtual First could be explained by this. Collins claims that Virtual First attracted 90% of job seekers to Dropbox.
“Dropbox has changed my life,” says Collins. “It’s allowed me to relocate close to my family and to have an executive job not tied to where the company headquarters is located.”
Free lunches and access to fancy gyms or yoga studios are not what most people want. Turns out what most employees really want—at least at Dropbox—is the freedom to live and work where and when they want. Even though some employees miss fresh-baked cookies Wednesdays.
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