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Return to Office Power Struggles- What’s Below the Surface

RTO is surfacing old and new power struggles between employers and employees.

And the power base continues to shift.

Employers who champion RTO cite productivity issues with WFH. The data paints a different picture. 

Stanford Professor Nick Bloom weighs in on recent and ongoing large data set research that shows that hybrid work has increased U.S. worker productivity across the board, post-pandemic. 

For full-time remote, productivity results are mixed, so what is the differentiator? Zero surprise, it’s when work is managed well, remote work works. Specifically, when companies support managers with clear planning, organization, and control processes for leading remote employees, productivity improves. (Don’t have that? We can help).

The data show that WFH has increased productivity in the U.S. for the first time in decades. The team behind the Survey of Working Arrangements and Attitudes, including Professor Bloom, has been surveying employees and employers monthly since 2020. 

And despite some divisive headlines, August’s data show that employers and workers aren’t that far apart on agreeing on the preferred hybrid split – 2 days in office seems to be the sweet spot.

In setting RTO policies, are companies relying too much on C-suite opinions, utilization numbers, or even leadership teams’ personal opinions and not enough on overall productivity data? 

RTO is Not One Size Fits All

In June 2022, pro-RTO CEOs celebrated Elon Musk’s hard stance on Tesla’s “return to office or else” policy. Yet in December 2022, Musk closed Twitter’s Seattle office permanently to save money. Musk announced that the Seattle team would be fully remote.

We see two main issues at play here. 

First, we’ve heard again and again from CPOs that their CFOs are strongly motivated for RTO because of real estate utilization. Have you noticed how many companies clamoring for RTO already have financial commitments or investments in real estate? In Musk’s case, closing the Twitter office is a significant cost savings. Even though much of the conversation on RTO is about employee productivity, that’s just an input into the real goal of profits

Additionally, how the work gets done, of course, matters. Twitter and Tesla are very different workforces, and what they produce and how they are managed make a difference. Our biotech clients who are working on curing cancer or other awesome outcomes for patients need employees in the lab. But does the marketing team need to be onsite? You can guess what the marketing team would say. 

Is RTO Just a Quiet Layoff?

For some, mandatory RTO looks a bit like the company version of “quiet layoffs”…layoffs without severance packages to avoid legal and financial obligations plus the hit to the company’s reputation. 

However, what is the hidden cost of randomly losing people (including high performers) based on their address? One approach we’re quietly seeing unfold is high performers asking for remote status. This can be a smart angle if performance management has a strong foundation and is respected by both managers and employees that it’s done well. What level of respect does your company’s performance management have, and is there something there to think about for 2024 planning? 

The Future, Based on Data

CEOs ask HR/PeopleOps leaders to be data-driven, and the data are coming in that hybrid (with two days in the office) and fully remote with strong management are the most productive. To be sure, if you have real estate noise about using prior investments, the question is, what’s the future rather than what was built or agreed to from the past? 

When you look at the key drivers of profitability, employee productivity is a significant one, as is the cost of having the right employees doing the right work and limiting the turnover of valued employees.  

We saw hybrid as the high-performing teams of the future as there is no “return to normal” – work norms only evolve, they don’t retreat. And we still see across the board how the PeopleOps and Marketing people we serve definitely don’t need cubicles (or a commute) to do their best work.

“Forshay provided a benefits expert who gave our team leverage by managing leaves, enrollment, and vendor relationships. She was a significant contributor to our team and helped us through a time of transition.” –Kerry O’Donnell, Chief People & Culture Officer, Golden Gate National Parks Conservancy