- Back-to-office mandates often fail to make companies more profitable.
- That’s according to a new paper that looks at how RTO mandates affect productivity and performance.
- If the RTO mandates are difficult to enforce, it probably doesn’t make sense for this job.
Back-to-office mandates may not do what bosses want.
A new paper from researchers at the University of Pittsburgh’s Katz Graduate School of Business examines whether employee access to the office increases productivity and performance.
“The results of our determinant analyzes are consistent with managers using RTO mandates to reassert control over workers and blame workers as scapegoats for poor firm performance,” the authors write. “Also, our findings do not support the argument that managers impose mandates because they believe that RTOs increase firm value.”
The researchers analyzed public RTO data from 137 S&P 500 firms and found that RTO mandates were greater for firms with poor prior stock market performance. RTO mandates were more common for firms with “male and powerful CEOs.” The authors found no significant effect of RTO mandates on stock returns or firm profitability.
However, the researchers noted that their data often did not specify how many days back in the office were requested by companies, meaning there may be performance differences between full-time and part-time RTO policies.
In addition, using employee job satisfaction data from Glassdoor, researchers found that RTO mandates decreased employee ratings for work-life balance, senior leadership, and job satisfaction. Still, many workers may agree with RTO decisions as a way to increase collaboration and better work from home separately, the researchers wrote.
RTO mandates have shared many offices across the country, including leading technology and financial companies. In 2023, more than 5,000 Amazon employees signed a petition against the company’s back-to-office mandate, which Amazon rejected. More than 2,300 Disney employees also signed petition against the company’s four-day personal work week.
Whether workers are more productive remotely has emerged as a key argument for or against bringing workers back into the office. Some early studies suggested that remote workers are less productiveand logging in from home curbs innovation. However, a final analysis According to the Federal Reserve Bank of San Francisco, telecommuting “by itself may not be a major factor explaining differences in productivity performance across sectors.”
As for RTO mandates, “if they’re hard to enforce, they probably don’t make sense,” Stanford economist and work-from-home researcher Nick Bloom said in an email to BI. “A well-executed RTO will return to the office maybe 2 or 3 days a week when all employees return on the same days, working together with energy in the office.”
One way to ensure that the RTO’s mandate is well met is for managers to “focus some open part of their evaluation on mentoring,” according to Bloom. This motivates leaders to figure out the best way to mentor and develop their teams, often one of the goals of a back-to-the-office announcement.
“A poorly run RTO will require a minimum number of days per week, but there will be no guidance on the days and no guidance on what to do in the office. Then people log in to keep up with calls that close the whole day, or swipe a tab to get a coffee and go,” Bloom said. .
And CEOs seem to have put the brakes on bringing employees back entirely. Just 4% of American CEOs The conference was polled by the Board of Directors This year, they would prefer to return workers to a full-time office, while 27% said maintaining hybrid work is a human capital priority.
“People in any managerial or leadership role don’t know how people work if they have to see people, feet on seats to think people are working,” Danielle, a millennial manager who left her job due to the RTO push, previously told BI.