How unpopular are RTO mandates? 99% of companies who had one saw a drop in employee satisfaction, study
Executives spent the better part of three years enticing, coaxing, cajoling, asking, and then finally demanding their employees return to the office.
White-collar employees wanted the flexibility to work remotely, while companies decided coming to the office was non-negotiable, and lax suggestions to return to the office eventually became clear directives—even threats. In the latest example of the latter, Bank of America recently sent “letters of education” to workers who repeatedly skipped out on the office, warning them that a failure to come in within the next two weeks could lead to “further disciplinary action.”
For as much as some bosses hate it when people refuse to come in, workers hate being forced to have to return to their offices, according to a new study from the University of Pittsburgh. Companies that issued return-to-office mandates to their employees experienced no improvement in financial performance, 99% of them saw a drop in employees’ overall job satisfaction, according to the research, which examined 137 S&P 500 firms between June 2019 and January 2023.
While companies usually impose return-to-office mandates under the auspices of increasing teamwork and spurring collaboration, there’s little agreement on whether they succeed. Research supporting or debunking such claims often serves as a sort of workplace Rorschach test that allows pro-and anti-office camps to see what they want from a topic they’ve in all likelihood already made their mind up about. A study from Microsoft neatly summarized the paradox of remote work where employees feel more productive, but bosses feel they’re actually less productive.
‘You can’t control them’
Instead of weighing in on the merits of office work, the University of Pittsburgh study examined the effect on morale when RTO became an obligation. “When you force people back to the office, which most people don’t like, they react negatively to this mandate because they know they can do the job [remotely],” says the study’s author Mark Ma, a professor at the university’s Katz Graduate School of Business.
Ma also blames the dissatisfaction on executives wanting to use remote work as a scapegoat to assuage displeased investors about middling performance.
Employees are reluctant to go back in-person after having gotten a taste of remote work, Ma says. “Before the pandemic, most people did not think working from home was a viable option for them,” Ma says. “Now most people have experience working from home. They know working from home is as efficient as working in the office. Some people might think it’s even more efficient.”
But companies who believe they can control employees better in-person are misguided. People can shirk their duties at the office just as effectively as they might at home, says Columbia Business School Management Division chair Stephan Meier. “Before quiet quitting, there was Microsoft Solitaire,” he says. “This is not a new phenomenon. People were phoning it in in the office before. You can’t control them in the office or at home.”
RTO or else…
Still, some companies remain determined to punish employees who didn’t adhere to the return-to-office vision. Bank of America is the latest example, but financial firms were among the first to require employees return to the office after the pandemic ended. Goldman Sachs executives were particularly insistent that employees come back to the office. Some, like Ray Dalio’s Bridgewater Capital, barely sent them home in the first place, instead opting to have employees work outdoors on its campus during the pandemic. JPMorgan CEO Jamie Dimon has slowly ramped up his company’s attendance policy, in April asking senior managers to be in the office five days a week instead of just three.
In tech, companies also launched initiatives to get people back to their desks. Some of them went a step further than Bank of America. They didn’t just reprimand employees but instructed managers to factor in office attendance into performance reviews. Amazon told managers that if an employee ignored repeated warnings over the course of several weeks to return to the office that was grounds for termination. Meta told employees their managers would be monitoring their attendance via badge swipes and repeated infractions of its three-day in-person policy could result in lower ratings and even firing. Google, usually known for its amicable company culture, also cracked down on RTO stragglers, asking those who had been approved for remote work to consider switching to a hybrid schedule.
Employees at many of these companies were upset by the policies. At Google the announcement was met with a flood of irate memes. “Check my work, not my badge,” read one. At Amazon employees circulated a petition that garnered thousands of signatures.
Is RTO the most unpopular decision?
This type of reaction is no surprise whenever senior leaders institute any unpopular rule. The paper doesn’t compare RTO mandates to other disliked decisions executives might make, so it’s hard to gauge whether return-to-office policies are worse for morale than other decisions, like cutting back on travel perks or unexpectedly lowering bonuses.
When asked how return-to-office policies compare to other types of unpopular decisions, Ma says the latter are usually too unique to a given company to allow for an accurate comparison. Meanwhile, RTO is widespread across various industries. “Many other issues are probably firm-specific,” he says. “It’s like, this manager made this really bad decision, which upset the employees of this specific company, but their neighbor or their friends may not share the same feeling.”
Columbia’s Meier believes it’s worth looking at return-to-office specifically because it’s an especially touchy subject among employees. “Somehow that difference creates a lot of tensions within the organizations,” Meier says. “Something about work from home, and that quote-unquote ‘privilege’ that some can actually do it, is very, very salient. And it hits harder than some other inequality.”
Indeed, some leaders used the veneer of equality in demanding on-site work. Elon Musk, who memorably told remote Tesla employees they could “pretend to work” elsewhere, also noted that Tesla’s factory workers couldn’t work from home like its corporate employees.
Meier says if a company sets the right objectives for employees, hybrid work, which seems to have become the consensus, can be extremely effective. “If you have the right performance metrics, I don’t care whether you’re doing your work in Downward Facing Dog, as long as you do your work,” he says. “If you don’t have the right performance metrics, you have a shortcut of, ‘do I see their face.’”
