How PepsiCo is rethinking the office: More remote work. No assigned desks

By Kathryn Vasel, CNN Business

When it comes to the future of work, PepsiCo is re-imagining the role of the office and giving employees more flexibility to choose where they work.

It’s all part of PepsiCo’s new “Work that Works” plan. The office will no longer be the primary location for where work gets done, and corporate employees around the globe will decide with their managers which days they’ll be in the office and when they’ll be remote.

“There are no limitations. There is no number of days you need to be in the office or a number of days you can be remote,” said Sergio Ezama, PepsiCo’s chief talent officer and chief human resources officer, Global Functions and Groups, in an interview with CNN Business.

Out of the company’s roughly 290,000 employees, about 80,000 work in corporate offices, with the remaining working in non-corporate environments, including plants, warehouses and sales centers.

Here’s what Ezama had to say about the future of work and finding employees in this labor market.

(This interview has been edited for length and clarity)

What was PepsiCo’s remote work policy before the pandemic?

Prior to the pandemic we had a policy by week — people could ask to work remote up to two days upon manager approval. So if I were to work from home for two days next week, I would send an email to my boss asking for permission and my boss would say ‘yes’ or ‘no.’ Depending on the location I would say that part of the policy, the flex policy, was more used in big headquarter locations.

Pre-pandemic, normally we had a peak around 65% of the assigned headcount on any given day: people traveling, on vacation or working remote wasn’t really quite a significant part of what we were seeing day in and day out. Still, the policy I would say was a very traditional policy with the day limitation and manager approval being required.

We had people who asked for a more structured arrangement — ‘can I work this particular day always from home?’ — that also required human resources approval.

What is the company’s plan now for how its corporate employees will work?

When we started to ask our employees about ‘how are you thinking about coming back?’… contrary to much of the news you read, people were not asking us for remote. Our people were asking us for choice. They were like: ‘Give me the opportunity to decide where and how I do my work.’

Let me give you the key ideas of “Work that Works.” The first key idea is there is no default workplace. This idea of the physical office as the default environment doesn’t exist any more.

The second one is it is up to managers and associates to decide where something is going to happen, where work is going to be done best. There are no limitations. There is no number of days that you need to be in the office or a number of days you can be remote.

Third key idea: While we will spend less time in the office, the time in the office we believe will be more important. And we think the office is going to play critical roles for PepsiCo. One is to create and collaborate…research proves that these things are better done in the same physical environment. Anything that is connected to innovation, cracking difficult problems, all that we believe will be nicely done via the office.

The second one is the connection. PepsiCo is a very social place, the one thing that people were telling us is: ‘What I really miss and want to find in the office is a social connection, being with the people I love working with.’

The third one is…the idea to celebrate…we work very hard on our culture, the PepsiCo Way, so celebrating the culture that we have and the brands we carry we also believe will be nicely done through the office experience. We believe the office will become that destination where we fulfill those four roles: create, collaborate, celebrate and connect.

How will the physical office spaces change?

We believe the office as a physical location is going to evolve quite a lot. So if you think about having assigned seating, having closed offices, we believe that is a thing of the past. And we already, before the pandemic, started the journey to transform our offices to unassigned locations, opening up the space, collaboration space, we are going to see more of that we believe.

If I think of our headquarters in Purchase [New York], we transformed two of our biggest floors…My floor is one of those where I won’t have an office. I won’t even have an assigned desk. Every day, I will pick a space and do my job and then maybe change to a different location within the same floor if I need to collaborate with some folks that might be close or work in collaboration spaces. So very, very different layout from the traditional setting.

When I return to the office on July 6, I am going to take my phone [and] I am going to go into the app to book a space in the office. I can access the floor map for HR and then pick where I am going to sit. When I get to the office, I get an E-ZPass type of entrance into the property, I can order my coffee or my lunch menu also out of an app.

Do you anticipate not needing such a large corporate office footprint?

No, we don’t. We did spend quite a bit of time trying to understand what it is going to be. We did a couple analyses in the US, Europe and in Asia. We found this beautiful convergence around people and leadership believing that the average time in the office per week will be around 2.5 days. We don’t believe that, in opening up this policy, that people will never go back to the office, nor do we believe managers are going to be irrational, asking folks to spend too much time in the office if there is no need.

What have you learned from the countries that have reopened and have employees coming back?

In China, the country where we have the largest workforce that has been open for longer, when we implemented “Work that Works” the local intelligence was one of: ‘Oh you are going to see… people still, by and large, are going to be willing to come back to the office.’ ‘It’s a more traditional culture’ and all that.

I was looking at the data last month, they are already in a sweet spot of 50% in the office and 50% remote, so it seems our assumption is working well — again, with the caveat that it is only one country.

Let’s talk about the labor market. Are you having a hard time finding workers right now?

I think throughout the pandemic, people found comfort in companies with financial stability, good performance, well-known brands.

In a period where security and safety are valued, people look at companies like PepsicCo — big scale, financially robust brands I recognize — as more attractive destinations. So we were able to attract people that probably a year before we couldn’t find.

In terms of our own people, our voluntary attrition [in the first quarter] was extremely low.

The one thing that is giving me a bit of pause, to be very frank, is that people have had a lot of time to reflect and look at life and work with a bit more perspective or a very different perspective. And sometimes what we are seeing when people are leaving companies, it is because they are making very different choices. It’s not incremental changes to their lives. These are radical changes like, ‘I am going to move close to my parents because that has become super important to me’ or people who have said, ‘listen, you only live once. I am going to make a drastic change in my career.’ We are seeing some of those things.

So what we are trying to do with our management is just to make sure we understand where people are in those reflections, especially those we care the most about.