Truth behind return-to-office mandates
In the evolving landscape of workplace dynamics, the trend toward revoking employee flexibility and mandating a return to the office (RTO) is gaining traction among corporations.
Indeed, according to Statistics Canada, those working exclusively from home fell to 12.6 per cent in November 2023, down from 24.3 per cent in January 2022. One prime example is the Royal Bank last spring mandating employees return to the office three or four days a week.
Recent research led by professor Mark Ma from the University of Pittsburgh, alongside his graduate student Yuye Ding, sheds light on the complex reasons behind the adherence to RTO mandates by organizational leaders.
It reveals motivations that diverge significantly from the commonly stated objectives of “improved productivity” and “financial performance.”
Their research, as Ma told me in our interview, indicates that the push for RTO is more associated with managerial desire for control and a tendency to attribute organizational underperformance to the workforce, rather than evidence-based strategies aimed at enhancing corporate value.
Reports from organizations like Hubstaff and Thumbtack reveal that remote work can lead to higher efficiency and productivity, challenging the assumption that physical office presence is inherently more productive.
Furthermore, insights from McKinsey and Aquent highlight that remote and hybrid models done right foster high-performing teams and support diversity and innovation compared to in-office models.
However, the imposition of rigid, top-down RTO mandates without employee consensus can have detrimental effects, including increased turnover and diminished morale, as outlined in the “Return-to-Office Playbook” by McLean & Company and other industry research.
Ma’s study delves deeper into the motivations behind RTO decisions among S&P 500 companies.
The research does not find a significant link between CEOs’ financial stakes in their companies and the implementation of RTO policies, suggesting that financial incentives may not be the primary driver of these decisions.
The study explores the notion that RTO mandates might serve as a diversionary tactic by management to shift blame for poor organizational performance away from strategic or managerial shortcomings and onto the workforce.
They find support for this hypothesis by a correlation between RTO mandates and poor stock performance, indicating that such mandates serve as an excuse for underperformance to shareholders and the market, despite their questionable efficacy in addressing the root causes of underperformance.
Moreover, the research suggests that RTO mandates may reflect a desire among certain leaders to reassert control and authority within the organization.
That’s particularly in cases where CEOs exhibit power-seeking behaviour, which they assess by the gap between the CEO’s pay and the salary of the next highest paid executive officer.
A pivotal aspect of the analysis involves employee satisfaction, where the study leverages extensive data from platforms like Glassdoor to gauge the repercussions of RTO mandates on employee sentiment.
The findings reveal a notable deterioration in job satisfaction, work-life balance and perceptions of senior management post-RTO implementation.
These outcomes challenge the conventional wisdom that RTO enhances collaboration and company culture, suggesting instead that such mandates harm employee morale and organizational harmony.
Furthermore, the study scrutinizes the impact of RTO mandates on organizational financial performance and market valuation, directly addressing the prevalent managerial assertion that RTO policies inherently bolster firm productivity and shareholder value.
Contradicting these claims, the research uncovers no significant evidence that RTO mandates contribute positively to the financial metrics or market standing of firms.
This revelation critically undermines the foundational arguments often employed to advocate for a return to traditional office-centric work models.
The insights from this study serve as a critical resource, offering a research-based perspective to challenge and reconsider the efficacy and motivations behind RTO mandates.
As we navigate the complexities of shaping workplace policies in this post-pandemic world, understanding the nuanced impacts of RTO decisions on employee satisfaction and organizational performance becomes paramount, as I tell clients when helping them determine hybrid work plans.
This knowledge empowers us to advocate for more evidence-based, flexible and inclusive work arrangements that align with both employee well-being and organizational objectives.
GLEB TSIPURSKY, DUBBED THE ‘OFFICE WHISPERER’ BY THE NEW YORK TIMES, IS CEO OF THE FUTURE-OF-WORK CONSULTANCY DISASTER AVOIDANCE EXPERTS AND AUTHOR OF SEVEN BOOKS, INCLUDING “RETURNING TO THE OFFICE AND LEADING HYBRID AND REMOTE TEAMS,” AND “CHATGPT FOR THOUGHT LEADERS AND CONTENT CREATORS.”
The imposition of rigid, top-down RTO mandates without employee consensus can have detrimental effects. — Gleb Tsipursky