The CEO ‘return to office or else’ is having limited success this year

More companies are towing a hard line when it comes to return-to-office mandates. This past week alone, Boeing and UPS called workers back to the office five days a week. To be sure, these high-profile examples are unique cases. Boeing is dealing with a company-wide crisis and loss of faith in its business quality controls at the most critical level, while UPS announced its return-to-office mandate on the same day it laid off 12,000 corporate workers.

A survey by the Conference Board found few U.S. CEOs saying they will prioritize bringing workers back to the office full time in the year ahead. But more generally, companies that take a hard stance on returning to the office understand that it may not work for everyone, and it’s a chance they are willing to take because of the strategic value being place on in-office collaboration.

Jotform, an online form-building platform with about 660 team members, recently made the decision to require employees to be in the office five days a week. “Of course, we hope our team members can understand the reasoning behind our policies and align with our vision of continuing effective communication, collaboration, and internal talent development in person at the office,” said Elliott Sprecher, vice president of marketing, in an email. “In some circumstances, that might not always be the case, which is equally understandable. While this may take some time to adjust to, we believe that this is in the long-term interest of the company and ultimately everyone who’s a part of it,” he said.

While many companies have embraced a hybrid-work environment and aren’t forcing employees back into the office five days a week, they have instituted stricter RTO policies for the time they want workers in the office. IBM recently sent the message to managers that they must be on-site at an office or client location minimum three days a week, or leave the company — regardless of where they may have moved during the pandemic.

This follows the lead of companies such as Google, JP Morgan Chase, and law firms including Skadden, Arps, Slate, Meagher & Flom, and Davis Polk & Wardwell that made clear to employees that a return-to-office mandate is not optional, and in some cases, warning about potential consequences for non-compliance. And more companies appear to be headed down this path. 

A December Resume Builder poll of 800 business leaders found that 8 in 10 companies will track employee office attendance in 2024. What’s more, a whopping 95% of companies said employees will suffer consequences if they don’t comply, meaning their jobs, bonuses and salaries could be at risk for employees.

But in some cases, cracks in the “stick” approach are starting to show, with employees leaving or disengaging. Many employees who aren’t happy are engaging in behaviors such as quiet quitting or coffee badging, where they show up for long enough to swipe in, present themselves and grab a cup of coffee. This leads to multiple challenges for companies — especially with expected weakness in the labor market not yet materializing to any widespread degree, despite a notable pickup in layoffs in January. The January nonfarm payroll report showed significant outperformance in total number of jobs added to the economy and the level of wage increases.

“Leaders are struggling and they want to do what’s right for the company as well as the people they lead, but the path forward is unclear for all of us,” said Laura Putnam, chief executive of Motion Infusion, which helps organizations with issues related to engagement, behavior change, human performance and organizational betterment.

Here’s what companies need to know about the current state of RTO:

A critical mass of workers are still ignoring RTO mandates

Many companies have increased the rhetoric around “return to office or else,” but they aren’t necessarily taking action, said Henry Nothhaft, Jr., president of EssentialDx, an organizational diagnostics company. Many companies are finding enforcement has no teeth given that there’s a critical mass of people flouting the policy — and many of them are productive workers. 

In some cases, companies are also finding it difficult to crack down on lower-level employees because higher-ups also aren’t complying. “If those leaders are not in the office to be witnessed, to be observed and to develop relationships with, the rationale [of needing to be in the office] falls apart,” said Betsy Henning, managing partner of the marketing and communications agency Finn Partners.

There’s some anecdotal evidence that certain businesses are using strict in-office policies to cull underperformers, but in many cases, they are simply collecting data and biding their time. Even if they want to take a hard line, there are other factors at play such as not wanting to lose or disenfranchise otherwise good workers, Putnam said.

Employees continue to want flexibility

Certainly, there are legitimate reasons companies want workers in the office. These include debate over where the body of evidence tilts on productivity when people work from home. Some studies have cited high productivity levels in recent years while workers have been remote or hybrid. But other companies have reported significant productivity bumps when workers return to the office.

Collaboration tends to be more effective in person. But workers get frustrated when they are told to come back — or else — and they spend their whole day in the office on Teams or Zoom, said Dave Wilkin, founder of Ten Thousand Coffees, a mentoring and networking platform. Employees need actual reasons to come to the office such as in-person brainstorming sessions, in-person coffee chats with executives and mentor relationships based on complementary in-office days. “Riding the elevators with leaders is not enough,” he said.

It’s also clear the employees want flexibility. A FlexJobs poll of more than 8,400 individuals in August found that 56% know someone who has quit or planned to quit because of return-to-office mandates. The survey also found that 63% of professionals were willing to accept a pay cut for a remote opportunity.

“No matter what you force people to do, people will only work so much and they will find ways around whatever stick you decide to provide,” said Jennifer Dulski, chief executive and founder of Rising Team, a platform for improving team connection, engagement and performance.

Repercussions for companies that are too inflexible

Dulski knows a few dozen people who have left their companies in the past year or so over flexibility issues. “Many companies are offering more flexibility and those companies will win because the best talent will have choices. They always do,” she said.

Indeed, many companies, including Amazon, that have instituted stricter in-office policies have experienced tensions. In May, Amazon began requiring that staffers work out of physical offices at least three days a week. This led to a walkout by a group of employees at its Seattle headquarters. Employees also circulated an internal petition urging CEO Andy Jassy to rescind the requirement, which it has not done. The company has found that having most of its employees in the office more frequently has led to greater energy, connection and collaboration, according to a spokesperson.

The risk to companies, however, is that even if employees don’t leave, they may not be as engaged. For instance, Henning said her agency has experienced delayed response time from clients whose companies employ strict in-office mandates. Putnam, meanwhile, has a client facing dissent in its ranks from its two-day-a-week in-the-office policy. “Even if people don’t leave, is the company getting the best from its people, or are people just checking the box? If they are feeling like their needs are being overlooked, then of course they won’t be as engaged as they would be otherwise,” Putnam said. 

Stricter companies are staying the course 

Some companies with in-office mandates said they plan to stay the course.

Neil Barr, managing partner of Davis Polk & Wardwell, said it has had “de minimis attrition” since implementing its policy in September, which requires workers to be in the office Monday through Thursday. The firm balanced that by giving staff the option to work 16 days a year remotely as well as offering clusters of time where the whole office can be remote, including Thanksgiving week and the last week of December. Other law firms have adopted similar in-office requirements, generally three or four days a week. 

“The overwhelming majority of our colleagues are in, are complying, and we think the business is running better because of that,” Barr said.

Meta also is sticking to its policy, announced in June, where people assigned to an office are expected to be there three days a week. The company continues to offer a remote-only option for some workers.

Make sure other policies are employee-friendly

While flexible work is important to many, the most recent Human Workplace Index survey shows that work arrangements ranked lower on job-seekers’ priority list than some might anticipate, according to KeyAnna Schmiedl, chief human experience officer at Workhuman. “Job seekers revealed they prioritized work-life balance, recognition and rewards, and company culture over where work gets done,” she said in an email.

The survey underscores for companies the importance of keeping workers happy on multiple fronts. “This finding reveals that issues that arise during the RTO process may be less about commuting to the office and more about the office and culture employees are coming to,” Schmiedl said.