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A bit of housekeeping before we delve into today's newsletter: Next week, we're launching our third quarterly Fortune @ Work playbook exploring how leading Fortune 500 companies are using A.I. to drive talent strategy. Catch up on previous playbooks here. Now on to the newsletter.
It’s been one year since Airbnb announced its “Live and Work Anywhere” policy for employees. In the 12 months since, the home rental company has observed higher diversity among new hires, lower attrition, and increased revenue, which it attributes to flexible work.
Currently, almost 21% of new hires in the U.S. are from underrepresented backgrounds, and just over 52% of the hires globally are women—the highest percentage yet, according to the company. Attrition has also slowed to below 10%, and revenue has grown 40% since 2021. This year, Airbnb made its Fortune 500 debut at No. 450.
Though the company breezed through the pandemic, as Fortune's Trey Williams writes, the looming recession will be its next hurdle. And as it enters year two of its live-from-anywhere program, Airbnb will be keeping an eye on its growth metrics, according to Dave Stephenson, CFO and head of employee experience at Airbnb.
Stephenson spoke with Fortune about the biggest learnings and motivators for maintaining the policy, especially as his tech peers call employees fully back to the office.
This interview has been edited and condensed for clarity.
Fortune: What's the origin story of Live and Work Anywhere?
Dave Stephenson: As COVID was beginning to show signs of receding, people wanted to know when they would be asked back to the office. Many companies were very quick to say they were going back to the office, and they often had to backtrack. But because we're founded by designers, we attacked the problem differently, asking ourselves, ‘What are we trying to solve?’
Based on this principle, we designed Live and Work Anywhere, enabling employees to work from an office or home and work collaboratively in person when it's really important. It allows them to work up to 90 days in other countries worldwide. It allows them to move anywhere within the country and not change their pay. And it gives them a $500 allowance to help make them more effective at home. It also gives $1,000 a year for an ‘educate anywhere’ allowance, which they can use for themselves or family members.
I do want to be clear: We are not remote-first. We think working in person is incredibly important. Some of the best work is done collaboratively together in person. We just think that you should be intentional about when you gather for work.
What are the biggest learnings from the program, and what tweaks have you made along the way?
The opportunity areas that we continue to learn about are how to get more efficient and effective in how we implement the work. We have half as much real estate as before COVID, but now we’re thinking about how to best utilize that space. We're learning that we don't need a sea of desks. We don't need people to come into the office just to do email. Instead, we need collaborative workspaces. So in our offices in San Francisco, you see many more whiteboards and collaborative workspaces.
There's still improvement and opportunity to learn how we train and develop people in this remote world. We're still learning when to do training in person and for what purpose. Last, more work must be done to determine how we do promotions. We want to make sure that we're not biased toward those who are in the office frequently. It's still the early days, so I don't have any data on any change, but we're mindful of that.
What metrics will you look at as you enter year two, and what will signal success?
Ultimately, success will be that we continue to deliver great results for our guests. We're also looking at our ability to recruit, retain, and develop great talent. We’re looking at the rate of hiring and rate of acceptance. Also, attrition—our attrition rates are lower than what they were—and our satisfaction rates. Currently, more than 85% of employees say they would recommend Airbnb as a workplace.
A lot of tech companies are calling their employees back to the office. What do you say to your peers who question Airbnb’s unique position?
This is working really well for us. Prior to COVID, we were a divisional structure. So we had general managers over groups. We had a homes division, a luxe division, a plus division, a transportation division, a magazine division, and experiences. In COVID, we moved from that divisional structure to a functional one. We reduced our headcount by 25% and started working against one common roadmap. That streamlined much of the work we were doing to be more effective and efficient. Our flexible work program works better for us in that we have to be more intentional and thoughtful in how we meet with this new structure.
I'd rather people know that they will be in the office for five days next week working on a specific program and getting it done than three random days a week when the benefit of that random interaction is meager. That intentionality and design mentality is really successful here at Airbnb, and not every company needs or has that.
Amber Burton
amber.burton@fortune.com
@amberbburton
