The corporate world is pivoting once again. After years of remote and hybrid work redefining the modern workplace, a growing number of private companies are now mandating a full return to the office. What was once hailed as a transformation toward employee empowerment and flexible work models is now being reversed under the banner of culture, collaboration, and productivity.
But is that the full story?
Alarmingly, are we moving back to an era of enforced presenteeism?
In the public sector, the proposed Department of Governmental Efficiency (DOGE) led by Vivek Ramaswamy and Elon Musk aims to ‘streamline’ government operations. Interesting that the acronym DOGE echoes the famously volatile Dogecoin cryptocurrency, raising a further important question: are we introducing similar unpredictability into workplace structures?
As reported by CNN on 28 December, Musk and Ramaswamy have also repeatedly said they could downsize the federal workforce by eliminating work-from-home options for 94% of federal employees. This would force employees to return to the office, which they hope would prompt many of them to quit. In turn they believe this will reduce the federal budget by several trillion dollars.
Pausing for a moment to check the facts. Actually, fewer than half of federal civilian workers are eligible to telecommute, and those that can still spend many of their working hours in their offices.
The problem is, evidenced by a TeamBlind survey (17-19 September 2024) of 2,585 Amazon employees, that 73% responded they were considering another job, due to this return to office policy. Many of those would be valued employees, so the cynical approach by the incoming Trump administration may be effective but indiscriminate, probably removing the most valued and more employable government employees.
One could cynically imply, with the involvement of Elon Musk, that there is a second agenda to replace many of these employees with AI. The administration will be unconcerned with the negative impacts which we have witnessed at Amazon, where we have seen videos of employees ‘clocking in’ and then going home with a blunt comment: “go ahead fire me, I don't care!”
The reality is that many of these employees are likely to be high performing, and a significant loss to the organisation; this is the hard truth of getting it wrong.
The evidence against blanket return to work mandates
We have considered in previous publications the empirical study led by Nicholas Bloom at Stanford University in California and Ruobing Han at the Chinese University of Hong Kong, Shenzhen in China, and James Liang, chairperson and co-founder of the online travel company Trip.com1.
The study showed that hybrid workers generally had increased job satisfaction and reduced resignation rates, and were as productive as those who worked entirely in-person, as measured by performance reviews.
A working paper2 from Mark Ma, associate professor of business administration, and colleagues found that prominent technology and finance companies who implemented return-to-office (RTO) mandates lost their most skilled and senior employees. When they tried to fill job vacancies left by those workers, they had a harder time doing so.
The study tracked over three million technology and finance workers' employment histories, as reported on their LinkedIn profiles. It evaluated the impact of S&P 500 firms' RTO mandates on employee turnover and hiring. The findings demonstrate that:
- firms experience abnormally high employee turnover following RTO mandates
- the increase in turnover rates was more pronounced for female employees, senior employees, and more skilled employees
- it takes significantly longer for these firms to fill their job vacancies after the mandates
- hiring rates also significantly decreased
These results are consistent with other studies where a range of organisations have lost some of their best talent, often female employees, and are facing significant challenges with attracting the best staff after RTO mandates have been applied.
The Ma research and others conclude that ‘brain drain’ is a significant impact of RTO mandates and imposes a substantial cost on many organisations, including some of the biggest, such as Amazon.
A second problem is that the workers who remain are not only likely to be resentful of their lost flexibility and freedom, but the situation is likely to create what we are calling ‘Presenteeism 2.0’. Whilst presenteeism traditionally refers to reporting at the workplace when ill, we also include presenteeism in the sense of needing to be seen at work, even if you are not as productive as you might be elsewhere. We all know that just being in the office is no indicator of being productive, especially if the organisation is not results orientated. Workers forced back into environments that do not support their activities, such as places to concentrate, will impact productivity. In a wider sense productivity links to wellness, and a number of studies have indicated both the personal and organisational consequences of being present when unwell.
RTO mandates are unlikely to promote employee wellbeing
As reported in Fortune Well (2024) by Lindsey Leake, flexible work environments increase employee well-being, and as employers scale back the flexibility they offered during the height of the COVID-19 pandemic, workplace well-being has diminished. The article is based on research undertaken by the Human Capital Development Lab at Johns Hopkins Carey Business School in partnership with Great Place to Work. It is based on an annual survey of more than 1.5 million people measuring the ‘climate of well-being’ at over 2,500 US firms from 2019 through 2023.
The research found a clear positive correlation between flexible work arrangements and employee well-being. The research evaluated the percentage of a company's workforce allowed to work remotely for a portion of the week, and reported:
- firms in which 75% or more employees could work remotely part-time had the highest well-being score (4.41)
- those in which less than 25% of employees could do the same had the lowest score (4.2)
In addition the study indicated that where more employees were able to work flexibly, with some autonomy in choosing their in-office hours, the healthier the work climate was observed to be.
The report concluded: ‘for workers, flexibility provides the means to effectively manage work-life balance, addressing personal and family needs such as childcare and elder care’, and ‘for employers, it may cultivate higher levels of engagement and productivity among employees while fostering a climate of well-being’.
These shifting mandates, just like the volatility of the crypto market, can create instability and erode trust within organisations. As leadership moves aggressively towards top-down control, stripping flexibility and flattening hierarchies, we risk sacrificing the very cultural fabric that drives engagement, retention, and performance. As we commented in our blog relating to Mintzberg's organisational structures, this is a continuing trend, accelerated with the use of AI, which may also compromise what is known as workplace fabric knowledge.
Interestingly RTO is playing out very differently across the planet and this is why we have created this series of three very different global perspectives. In the UK the government is in the process of a bill to change employment rights as a ‘New Deal for Working People’ which will protect hybrid working and enshrine flexibility as a workers' right. This is explored in the blog from our UK partner Noel Brewster in the same series. A different focus is playing out in the UAE, where the rulers are mandating working from home to reduce congestion and boost sustainability goals. This and other ways in which hybrid is acting as a catalyst for change is explored in the blog from our Middle East partner, Oliver Baxter.
At Workplaced, we believe that the workplace should not be a gamble. Inconsistent and draconian policies such as those advocated by DOGE, and the corresponding abrupt and unsettling shifts, can damage productivity and morale, turning workplaces into unpredictable environments where employees feel they are at the mercy of corporate experiments.
The challenge now is establishing a balance between leadership and employees that results in more workplace alignment to optimise productivity, engagement, sentiment, fulfilment and wellness. At Workplaced, we use human centric data to support this alignment, ensuring operational efficiency, whilst keeping employee experience at the heart of decision-making.
In particular, we have our own metric, hybrid balance, which examines exactly who should be in the office, home or a third space, and when and why they should be in that place to be most productive. This informed approach gives appropriate flexibility to those who need it, but also ensures that the necessary connectivity and creativity, that is proven to be most effective in an office environment, is achieved by the right teams.
By working with Workplaced, organisations can make better, more informed decisions about the future of work. Capturing a detailed understanding of the processes, activities and sentiments of the workforce helps promote engagement, efficiency, productivity, and wellness.