New research doesn’t support return-to-office mandates, and neither do workers

There’s some good news for those of us who love sitting around in sweatpants all day, unshaven and unshowered, while still earning a steady income and contributing at least marginally to society. Sure, we may not be allowed to ply our trades among Elysian expanses of chip and chocolate pretzel crumbs—i.e., our beds and couches—forever, because those decisions are still up to The Man. But new research into so-called return-to-work mandates suggests that whatever motivation managers have for herding their employees back into cubicles, it has precious little to do with companies’ bottom lines. 

While the COVID-19 pandemic upended the economy, interrupted millions of kids’ educations, and left untold emotional scars, it also ushered in a new workplace paradigm that could contribute significantly to employee retention and morale—if only managers have the foresight and courage to take advantage. But many employers are still insisting on bringing their workers back to the office grind, even as a persistently tight labor market gives those employees far more leverage and options.

As The Washington Post reports, a new study from the University of Pittsburgh’s Katz Graduate School of Business is as clear an indication as any that managers may want to reconsider kicking workers off their couches and back into their office chairs.

“We will not get back to the time when as many people will be happy working from the office the way they were before the pandemic,” said Mark Ma, co-author of the study and associate professor at the Katz Graduate School of Business. Additionally, mandates make workers less happy, therefore less productive and more likely to look for a new job, he said.

The study analyzed a sample of Standard & Poor’s 500 firms to explore the effects of office mandates, including average change in quarterly results and company stock price. Those results were compared with changes at companies without office mandates. The outcome showed the mandates made no difference. Firms with mandates did not experience financial boosts compared with those without. The sample covered 457 firms and 4,455 quarterly observations between June 2019 and January 2023.

Of course, the cynical among us have likely surmised that making workers less happy is part of many managers’ job description—but making them less productive and more restless surely is not. 

Meanwhile, many employers are doing their best Eric Cartman impression when it comes to return-to-office mandates, despite a lack of evidence that those policies actually help their companies. 

Still, some companies are going all in on mandates, reminding workers and sometimes threatening promotions and job security for noncompliance. Leaders are unlikely to backtrack on mandates once they have been implemented because that could be viewed as admitting they made a mistake, said Ma.

“There are compliance issues universally,” Prithwiraj Choudhury, a Harvard Business School professor, told the Post. “Some companies are issuing veiled threats about promotions and salary increases … which is unfortunate because this is your talent pool, your most valuable resource.”

Of course, not all jobs are suited for remote work. Some workers were forced to soldier on in public workspaces even during the pandemic, and some roles might be more conducive to a hybrid office-remote approach. That said, many workers are fiercely resisting return-to-work mandates, having (correctly, it seems) concluded that such policies are more about babysitting than the bottom line. And it turns out those workers have a lot of power, at least in the current economic climate.

Forbes, Sept. 10, 2023:

The stats show that workers still might have the upper hand. Business Insider reported that four million people quit their jobs in May. And a Deloitte study of 700 full-time executives found that 66% of those who work remotely say they’re likely to leave their current jobs if their companies require them to return to the office five days a week. And, of course, there’s the younger generations, expecting employers to adapt to their needs, who are less likely to settle. Add to the mix that the July Jobs Report, showed workers preferring fully remote roles are in luck.

According to James Neave, head of data science at Adzuna, they can choose from an abundance of available remote jobs. “On Adzuna, advertised job vacancies in the U.S. tracked 7.5 million in July,” Neave [stated]. “Looking at Adzuna data, there were more than 700,000 advertised vacancies for fully remote roles in July of 2023. The majority of these fully remote roles were in IT (159,572), Healthcare & Nursing (74,807), Teaching (68,394), and Engineering (66,673). In fact, most jobs paying annual salaries above $200,000 are fully remote roles. We expect businesses will continue posting more job ads for fully remote roles as this year goes on to meet employees’ demands to work from home in the labor crunch.”

But while not all jobs are created equal, some tasks (like say, writing) are far easier to complete in a silo of our own making. In fact, based on long experience, it’s safe to say I’d much rather do my writing in a literal silo—complete with enough feed corn to drown an overly meddling manager—than in most bustling office settings, where co-workers think nothing of pulling you out of a creative zone to regale you with stories of legendary lost weekends at Burlington Coat Factory.

At the same time, more collaborative projects might benefit from an increase in face time, as could company team-building efforts. This may be part of the reason why some see a hybrid work model as the future paradigm for many workplaces.

CNBC:

Throughout the pandemic, most corporations indicated that they were preparing for a hybrid work model, and the EY data suggests that is where many have ended up today. The survey found that 80% of leaders are confident in their current hybrid work strategy. Over the past few years, employers have seen a considerable rise in productivity, with 80% of executives reporting their employees’ productivity was somewhat or much higher over the past 24 months.

“Hybrid does not seem to damage innovation,” economist and WFH expert Nicholas Bloom — who made the recent “return to office” death proclamation — recently told CNBC. “Folks come into the office three days a week and WFH for two days a week. It seems three days of facetime a week, if coordinated amongst employees so they all come in on the same anchor days, appears sufficient. Hybrid has become dominant because of this.”

And some companies, eyeing an evaporating talent pool and increasing challenges when it comes to attracting qualified employees, are planning for a future with fewer soul-crushing cubicles.

The Street, Dec. 27, 2023:

Next year, it is estimated that more than two-thirds of companies in the U.S. will offer more flexibility regarding work locations. They see the benefits of such a move including the ability to attract more talent, increased employee satisfaction and productivity, according to software company Scoop’s 2024 Flex Report.

“Additionally, we see smaller and faster growing companies adopt flexible working patterns, and over time these firms will make up a larger share of the overall company pool and outcompete many traditional firms,” said Arpit Gupta, associate professor of finance at NYU Stern School of Business, in the report. “Even a recessionary environment may contribute to this trend, as firms will seek to cut costs through office expenses.”

It is predicted in the report that companies that allow more flexible work schedules and locations will outperform their competitors “dramatically” in 2024. Data in the report shows that between 2020 and 2022, companies that were fully flexible had industry adjusted revenue growth of 21%, much higher than the 5% growth of companies that required in-office time.

In other words, we’re all still figuring this out. But, importantly, the labor market’s lack of slack may soon prompt workers to hit the road … Jack. (Or Elon. Or whichever C-suite suzerains might actually deign to listen.)

The Post:

Rather than grappling with mandates as a means of boosting productivity, companies should instead focus on structuring their policies on a team basis, said Choudhury of Harvard. That means not only understanding the frequency and venue in which teams would be most productive in-person, but also ensuring that in-person days are structured for more collaboration. Requiring employees to work in-office to boost productivity in general has yet to prove itself out, he added.

Well, as they say, the proof is in the pudding, which you can eat to your heart’s content in your comfy couch “cubicle,” and which is unlikely to get pinched from your own refrigerator—even if you forget to put your name on it.

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