The Power of Proximity to Coworkers: Training for Tomorrow or Productivity Today?

Amidst the rise of remote work, we ask: what are the effects of proximity to coworkers? We find being near coworkers has tradeoffs: proximity increases long-run human capital development at the expense of short-term output. We study software engineers at a Fortune 500 firm, whose main campus has two buildings several blocks apart. When offices were open, engineers working in the same building as all their teammates received 22 percent more online feedback than engineers with distant teammates. After offices closed for COVID-19, this advantage largely disappears. Yet sitting together reduces engineers' programming output, particularly for senior engineers. The tradeoffs from proximity are more acute for women, who both do more mentoring and receive more mentorship when near their coworkers. Proximity impacts career trajectories, dampening short-run pay raises but boosting them in the long run. These results can help to explain national trends: workers in their twenties who often need mentorship and workers over forty who often provide mentorship are more likely to return to the office. However, even if most mentors and mentees go into the office, remote work may reduce interaction: pre-COVID, having just one distant teammate reduced feedback among co-located workers.