Examining Return-to-Office Mandates: Impact & Alternatives

The winds of change are blowing for the past months in the world of work. After initial embraces of remote work, tech giants like Amazon, Salesforce, Alphabet (Google's parent company), Meta, and many more are calling employees back to the physical office for at least three days a week.

And employees are not too happy with the decisions. They feel reluctant to go back to their workplaces.

So, to return to office, or not to return to office? This is the question.

The Remote Work Productivity Puzzle: Mixed Signals and the Search for Clarity

Meta's Take: Their initial analysis suggests engineers who joined or remained in the office performed better than those who started remotely.

The Data Debate: While this aligns with some reports claiming productivity dips with remote work, others tell a different story.

• Stanford University Study: A 2020 study (based on self-reported data) showed a 5% increase in productivity for remote workers.
• National Bureau of Economic Research: Their research highlights positive productivity growth in WFH industries between 2020-2022.
• University of Pittsburgh: A new study examining major U.S. companies (S&P 500) sheds light on the debate surrounding return-to-office (RTO) mandates. The study found a significant decline in employee satisfaction following RTO mandates. However, there was no measurable improvement in financial performance or company value. The research suggests managers may be implementing RTO mandates to regain control over employees and potentially deflect blame for poor company performance...

These contrasting findings make it difficult to draw a definitive conclusion. Individual companies and industries may experience varying impacts from remote work on productivity.

For example, here's what the folks at Atlassian think:

“The biggest blockers to productivity, connection, and innovation are not location-based. They center around how work gets done: back-to-back meetings, vague priorities, confusing email threads, and streams of distracting notifications. All knowledge workers face these challenges, regardless of where they work. “

Atlassian has started an experiment called "Team Anywhere". After the first 1000 days they realized that there was no productivity loss. Furthermore, their employees spend 13% less time in meetings and report a 32% improvement in focus. Also, 92% of Atlassians say that their distributed work policy allows them to do their best work. 91% say it’s an important reason why they stay at Atlassian.

So, context, management, leadership, communication, hybrid work processes...all matter in this debate. And some companies have really found the recipe to make it work, and with some interesting outcomes: better employee turnover and retention, and some real-estate savings. Here you can read about the Canva and Dropbox inspiring stories as well.

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Examples of Return-to-Office Mandates

In one articles of ours we analyzed 20 companies and their office comeback strategies: Meta, Dell, Zoom, Shopify, LinkedIn, Nike, IBM, Citi Bank, and more. For example, in June 2023, Salesforce incentivized employees to return to the office by offering a $10 charity donation for each day an employee worked in person.

Microsoft has a "moments that matter" approach, allowing staff to work remotely up to 50% of the time without needing manager approval.

This strategy empowers employees and managers to collaboratively decide when in-person interaction is most beneficial. Microsoft conducted research to identify key situations where face-to-face meetings are crucial for building strong relationships. These "moments that matter" include:

• Onboarding: New hires benefit from in-person interaction during their introduction to the company and team.
• Team-building: Collaborative activities and social interaction in the office strengthen team bonds and communication.
• Launching projects: Face-to-face meetings can be essential for kicking off new initiatives and ensuring alignment.

Let's check another example:

Ericsson Embraces Hybrid Work: A Collaborative Approach

Ericsson took a proactive stance when the pandemic struck, recognizing the need for a new way of working. Here's what they did:

• Understanding the situation: With 85% of employees working remotely, Ericsson acknowledged that "business as usual" was over.
• Getting employees feedback: They launched an internal project to design the future workplace, actively involving employees in roundtables and workshops. Later on, surveys were conducted to understand employee experiences while working remotely, including challenges like isolation and work-life balance.
• Responding to needs: The research revealed a desire for flexibility, with most employees preferring 2-3 remote days per week. However, the value of in-person interaction was also recognized.

By incorporating employee feedback, Ericsson crafted a hybrid work policy, allowing employees to split their time between remote and in-office work (50% each over a week or month).

Later on, Ericsson redesigned and reduced office space across its global network.

Key Takeaway: Ericsson's success in implementing a hybrid work policy lies in their collaborative approach. By listening to employees and prioritizing their well-being, they achieved a solution that benefits both the company and its workforce.

What Does the Latest Study Say about RTO Mandates?

Researchers from the University of Pittsburgh used a sample of Standard and Poor’s 500 firms, to examine the determinants and consequences of U.S. firms’ return-to-office (RTO) mandates.

One of their conclusions is jaw dropping:

Results of our determinant analyses are consistent with managers using RTO mandates to reassert control over employees and blame employees as a scapegoat for bad firm performance. Also, our findings do not support the argument that managers impose mandates because they believe RTO increases firm values.

By using a difference-in-differences (DiD) analysis, the study also revealed a significant decline in employee ratings of overall job satisfaction, work-life balance, senior management, and corporate culture following the RTO announcement.

Conclusions

While in-person interaction is valuable, return-to-office plans should be based on data and employee feedback. Every employee's situation is unique, and organizations should be:

Offering flexible remote work options: Providing flexibility in remote work arrangements fosters employee well-being and empowers them to manage their work styles.

Implementing phased approaches: A gradual return-to-office process allows employees to adjust and provides valuable feedback opportunities.

Considering individual circumstances: Tailoring plans to accommodate specific employee needs ensures a smooth transition.

For this, employers need to better understand their employees needs and include them into the creation of their work policies. For many of the employees working from come translates into better work-life balance as well as cost savings. Imagine gaining an extra hour per day – that's 5 hours a week! This precious time can be used for family, friends, or hobbies, potentially leading to a happier and healthier lifestyle. Also, remote work can mean savings on gas, car maintenance, lunches bought outside, and even work attire.

Another important thing to think about is that simply requiring employees back in the office for routine tasks won't motivate them. Remote work has become the norm for many, and companies need to offer a compelling reason to return. And that reason could be focusing on value.

Change and collaboration: The office should cater to activities that are difficult or less effective remotely, such as brainstorming, team building, or fostering in-person collaboration.

Employee autonomy and well-being: Providing more control over schedules can improve morale and motivation.

Virtual-free zones: If employees can replicate their entire remote experience in the office, including virtual meetings, they may question the value of commuting in.

In today's hybrid work landscape, companies need to demonstrate how the in-office experience complements and enhances remote work. Focus on collaboration, innovation, and a sense of community to make the office a destination, not just a place to do the same tasks in a different location.