Competing return to office (RTO) policies have been making the headlines. Amazon’s CEO has notified employees that as of January 5, it’s everyone back to the office for everyone every day. Meanwhile, across town, Starbucks’ new CEO just alerted employees that they needn’t come into the office more than three days a week.
79% of CEOs say workers who used to be in the office will be back within the next three years, way up from 34% earlier this year. And just 17% of CEOs said they envision traditional office roles being hybrid over the next three years, vs. 46% earlier this year, according to the latest KPMG CEO survey.
Wishful thinking on the part of CEOs? Maybe. Or maybe not.
I tend to have pretty strong opinions about RTO mandates, especially those that I see as extreme or ill-advised. In fact, in my LinkedIn posts I frequently criticize organizations that impose strict mandates, and most people who comment seem to agree with me.
But over the last few months, there’s been an outlier named Markus who began responding to my posts with a very different perspective. He seemed to suggest that company owners should be able to decide when and where people work and that in general, companies benefit by having people work in office instead of working remotely. He also commented about the deleterious effect empty offices are having on downtowns, something I admit I hadn’t thought about as much as I probably should have.
After connecting on LinkedIn, I suggested that we set up a Zoom meeting to discuss our different perspectives as the basis for a “point-counterpoint” type of article. We had an enlightening conversation that I think readers can learn from. Here’s an excerpt of that interview.
Different experiences lead to different perspectives
Markus has lived in the San Francisco area for the last 30 years and has witnessed firsthand the dramatic changes the city has undergone. He’s the manager of a large commercial real estate brokerage firm in the company’s San Francisco office. Here he manages leasing in office, retail, industrial and investments, supervising the work of six employees, all of whom come to the office for work most days. He’s also been a member of San Francisco’s Chamber of Commerce for four years, meeting regularly with other business owners and managers who brainstorm ways to bring businesses back to downtown San Francisco.
He takes a wide-ranging perspective of the impact that remote work has had, including on the businesses themselves, office leaseholders, retail shops, transportation systems, the quality of city services, the overall health of main streets and downtowns, and effect of the city’s falling tax revenue.
I, on the other hand, have been working from my home office in a small leafy suburb of Boston for 30 years, doing about 80% of my work remotely, with occasional visits to client sites or conferences. Since I’ve been working with hybrid organizations throughout this time, advent of COVID hasn’t made much of a difference in my own day-to-day work. And since I tend to focus on team collaboration and communication within a given organization, I have little exposure to effect of COVID on the entire downtown ecosystem.
Who gets to work remotely?
For the most part, knowledge workers who create, access and move information from wherever they are, whether by the internet, phone, virtual meetings or some other method, tend to have more remote work options open to them. These tend to be college-educated workers who have access to the right technology and a space to work from. In fact, Markus cited a Harvard Business Review study that found that most remote job postings require a college education and 7-10 years of experience.
Meanwhile, a more diverse and larger segment of the workforce must do their jobs in person. Examples: Maintenance crews, service personnel in restaurants, hotels, gas stations and retail stores, laboratory workers, and others whose roles are customer-facing, such as bank tellers and real estate agents. This tends to be a more diverse group of workers. Even though many may like to be able to work remotely some days, they rarely have that option. This disparity, especially within a single organization, can breed resentment. This is one reason Markus favors a consistent hybrid policy and approach for all employees, regardless of role.
I believe that different policies can implemented successfully with careful management of expectations and clear communications, but I admit it’s not easy. Even if some people must do all of their work onsite, there are other ways employers can give them some measure of flexibility, such as by shifting their hours or days worked or providing onsite daycare.
How does the advent of remote work affect employment rates?
It depends on the demographics. Some people have lost their jobs altogether (mostly in service-oriented jobs, and most of these are women) and some continue to thrive in their current roles. Per a Resumebuilder article, a shocking 37% of all remote workers say they have a second full-time job that most of their bosses don’t know about. Of these, 60% reported that they get both of their full-time jobs done in less than 50 hours a week. In effect, they’re being paid for 80 hours of work while only working up to 50 hours. These tend to be college-educated workers and overwhelmingly white.
While I’ve thought that remote work might especially benefit women, especially those who are primary caregivers, Markus shared a stat that surprised me: In 2024, the overall workforce participation rate for women is less today than it was in 2019, probably because many service workers tend to be female. So while it’s true that the flexible work schedules have allowed women in certain roles to thrive, it certainly is not the case for all women.
Workers in certain industries, locations and roles may carry more weight than others when requesting or requiring a flexible work policy. Many employees who aren’t offered opportunities for remote work can easily find work elsewhere, while others have little choice but to accept the prevailing policies.
Who should make the policy decisions?
Most hybrid work policy decisions are made at the top, with varying degrees of input from employees and managers. If you want employees to buy into these decisions, in my view, a representative sampling should be polled about the likely impact of decisions under consideration to their teams, functions and to them personally. While employees may not be part of the decision-making process itself, their input should be reflected. Very often, senior leaders are unaware of the impact their decisions will have on people doing the work, and they’re surprised by the backlash.
Markus, on the other hand, believes that the role of leadership is to assess, evaluate and then determine the best way forward for each company. Being aware of detrimental consequences to the company will surely have an impact on such decisions, but the overall responsibility still lies with leadership.
How strictly should hybrid work policies be enforced?
The answer we’d both give is: “It depends.” Markus believes that there’s such a thing as giving too much latitude, especially when different managers within the same organization reinforce mandates while others do not. If senior managers believe that the mission of the company is best served by having people in the office for a certain number of days, then it’s important for all managers to enforce those policies, with few exceptions.
A recent EY-sponsored poll showed that many hybrid workers prefer defined guidelines (X days in the office), versus such policies being left to interpretation. If you run a company into the ground by having inconsistent work schedules and locations, says Markus, hybrid work policies become irrelevant, as layoffs will follow. Some people have a real need to work remotely, while for others it’s a matter of convenience. It’s important that managers discern between these when deciding whether to make exceptions.
For my part, I’ve seen strict RTO mandates backfire, with some people leaving for more flexible organizations, or simply ignoring the mandates altogether when they can. I’ve also seen employees taking advantage of flexible RTO policies, which often leads to managers enforcing stricter policies. I’d like to be able to say that as long as the work gets done, it shouldn’t matter where or when it takes place. But in reality, I’ve seen many people benefit from being back together in the office, even if it’s just a few days a month. For me, the ideal scenario would be to leave it up to teams to decide when they need to be together to get shared work done or make needed connections. At the same time, I like the idea of establishing a few “anchor” days each month where everyone works in the office on the same days, with activities designed to foster interaction, such as training, all-hands meetings, or social gatherings.
Beyond the office, who is remote/hybrid work really hurting?
COVID hit San Francisco especially hard because the same high-tech workers who once crowded the city’s office buildings adapted easily to working from home. This once-vibrant city has become desolate. Markus can walk down practically any downtown street in San Francisco and see shuttered stores, restaurants, banks and office buildings. In fact, up to 40% of downtown stores have closed since 2019.
Landlords, business owners and workers aren’t the only ones to suffer the consequences. Before COVID, San Francisco had a stellar job market, high rents and low vacancy rates. Robust tax revenues could easily fund sanitation, transportation, and other vital city services. But all that’s changed. The city has lost $400M/year in tax revenue since 2019, leading to vastly reduced services for the needy. Many former retail workers are still out of work, especially those without degrees, and mass transit ridership is down 30%, with corresponding cuts to service levels, making it harder to find work.
Here in Boston, the office vacancy rate is only about one-third as high, at 13%, in part due to a mix of industries, including bio tech and pharmas, which have a heavy reliance on lab workers who work onsite. Since I rarely venture into Boston except on weekends, the effect of remote work on the downtown community has been largely invisible to me, leading me to imagine that remote work is an overwhelmingly positive choice for almost everyone.
But the question I ask myself is: Whose responsibility is it to “fix” the downtowns left downtrodden by office vacancies? Should employees be forced to return to offices even when their work might be better done remotely? Will employees who resist returning to the office or employers who don’t force people back to the office be blamed for the closure of nearby retail establishments? That seems both unreasonable and unfair.
The debatable advantage of energy savings
Surely there can’t be much of a debate about remote/hybrid work being more sustainable in the long run? With fewer round-trip commutes on any given day, there must be energy savings to be had, right? Markus pointed out that the average remote worker with access to a car might take advantage of the flexibility of remote work to get stuff done by taking multiple trips each day in between meetings (e.g. quick trip to the market, taking the family dog to the local dog park, pick-up or drop-off of kids, etc.) I will say that own my car often sits in the garage untouched for days at a time.
When it comes to mass transit, trains and buses continue to run regardless of the number of passengers, says Markus, so there’s no real energy savings when employees stay home. Lights, heat, water, other utilities, cafeterias, etc. still have to be run, even when the office is half-empty, unless entire wings or floors of offices can be shut down, which more companies seem to be doing.
In sum
There is no proven scientific conclusion to the question of what is best overall. There is much data and countless polls that can easily be construed to make a case for each scenario. However, Markus contends that many of the statements regarding the overarching benefits to society can easily be challenged with hard facts. The benefit to many individuals is clear; flexibility has advantages.
But until we have a full accounting over what damages these advantages cause many others, a true cost-benefit analysis is difficult. At the end of the day, every company will assess their own pros and cons and act accordingly, and leverage in the labor markets will determine the outcomes.
Links
Downloadable resources from Guided Insights:
- New! Facilitation Skills Learning Community of Practice program offering
- Essential Skills for Today’s Hybrid Leaders
- Creating and Adopting Norms for Your Virtual Team – Quick List
My past Communiques
- What Today’s Managers Really Need to Succeed in a Hybrid World –
- Tips for Cultivating a Culture of Trust Across Hybrid Remote Teams –
- Rethinking “culture” in a hybrid remote workplace –
- Real-world Strategies for Winning the Hybrid Game in 2024
- Why Coaches Make the Best Leaders in a Hybrid World
My latest articles in Reworked
- Questions to Answer Before You Introduce Yet Another Change (reworked.co)
- How Shared Principles Finally Got a Senior Leadership Team Unstuck (reworked.co)
- How to Improve Your Virtual Strategic Planning Process (reworked.co)
Links to external resources
- The 2024 KPMG U.S. CEO Outlook Survey
- When Someone You Manage Isn’t Following the Return-to-Office Policy (hbr.org)
- Leaders Need to Reframe the Return-to-Office Conversation (hbr.org)
- The Work From Home Free-for-All Is Coming to an End – WSJ
- Return-to-Office Plans Don’t Have to Undermine Employee Autonomy (hbr.org)
- Resume Builder article on remote workers holding multiple jobs
