The modern workplace, at least in the past three years, may very well have been defined by companies’ varying efforts to haul their unwilling people back to their desks.
So called return-to-office (RTO) mandates haven’t—by and large—moved the needle on actual in-person work rates, despite the widespread hemming and hawing. Office occupancy rates in major metro areas, per building security firm Kastle Systems’ weekly tracker, have held mostly steady at just shy of 50% since vaccines were made widely available.
Productivity hasn’t changed, either. As evidenced by the threat of a recession, the spate of layoffs, and the generally wary economic outlook over the past year, in-person work for most white collar jobs doesn’t always make workers more productive—which, after all, is what one would think should be the north star of any major business decision.
Yet, that’s long been the motive behind the return to office. CEOs of companies like Clorox and Shake Shack have said that bringing people back to the office is integral to their firms’ post-pandemic recovery. And many others aren’t giving up, despite Kastle’s evidence; 64% of CEOs said they expect a full office return by 2026.
It may all be for naught. A new working paper by Mark (Shuai) Ma, an associate professor at the University of Pittsburgh, and Yuye Ding, a PhD student at its Katz Graduate School of Business, found that an office return isn’t actually boosting a company’s bottom line. What’s more: Many bosses simply carried out mandates in an effort to regain control over an employee base they could no longer see—or, as it were, trust.
When the going gets rough, blame the worker
The paper, which is under peer review, empirically examines what determines an S&P 500 firm’s decision to mandate a return to office and what the consequences are—and aren’t. The researchers assembled their report by manually collecting RTO mandate data from over 100 firms, and then working backwards to assess what underpinned the decision. They first looked at why some firms wanted to impose mandates and others didn’t, Ma tells Coins2Day. “We were able to see three foundations: What managers say, what employees say, and what experts say.”
What managers say, Ma explains, is usually the farthest off the mark. Tthe sentiment he’s gathered is that bosses want employees where they can see them because they’re not performing well at home, which in turn hurts firm performance. It’s a thin argument, Ma says, and his research proves no link between work location and firm financial results.
Then there’s employee sentiment, which is often at odds. “Many [workers] say an RTO mandate is about control, not performance,” Ma says. They see their managers as being used to a traditional workplace in which they can see their orders being carried out, and losing that has made them uneasy, and quick to place blame.
The experts, naturally, fall somewhere in the middle, advocating for a flexible arrangement that is mostly determined by individual workers and teams. Additionally, experts prioritize meaningful in-office work—gathering with colleagues for collaboration, team bonding, and ideating, not just because it’s how things used to be done.
Ma concludes that performance and shareholder value isn’t the real overarching intent of an RTO mandate, despite many managers suggesting it is. Not only did the researchers find that RTO mandates fail to significantly change financial performance or stock value, it does little more than rankle employees and tank their satisfaction.
Instead, he believes that the mandates are more a means in which managers reassert control over their employees, who they then go on to blame if they fall below shareholder expectations.
“Overall, our results do not support the argument that managers impose these mandates to increase firm values,” he wrote. “Instead, these findings are consistent with managers using RTO mandates to reassert control over employees and blame employees as a scapegoat for bad firm performance.”
As PR executive Ed Zitron wrote in Business Insider in November—and Ma quoted in the report—RTO mandates are little more than an attempt to convince investors that decreased revenue and profitability “aren’t a result of poor managerial decisions but the result of lazy workers sitting at home in their pajamas.” Zitron calls it “a genius move” on executives’ part, because it lets them “establish control over workers during an unprecedented societal awareness of labor rights…while also shifting the blame and consequences of poor stock performance onto those least responsible.”
But if the managers were actually viewing RTO mandates solely as a method to improve firm value or performance, such mandates would look different. They’d “be higher among managers with a stronger incentive to maximize firm value—owners, those with more stock or ownership of their firm, whose interest is more aligned with firm interest,” Ma says.
The futility of forcing
Over the long term, Ma tells Coins2Day, mandates of any kind stand to undercut each of the goals managers say they’re meant to accomplish in the first place. “People will leave their jobs, and it’s never been easier for people to find other jobs that do let them work flexibly,” Ma says. “But we don’t have a long enough window to see long-term consequences.”
Ma supports a “magnet, not a mandate” approach to work arrangements for companies who want some form of balance. That approach encourages workers to go back to an open, flexible workplace without forcing their hand. As for the many remote workers who insist they’re better off staying put, “there’s no reason to force them back.”
He’s also quick to call into question data showing slightly elevated productivity levels among in-person workers. “Even if some employees were more productive in the office before the pandemic, that doesn’t necessarily mean they would become more productive when they return to office after the pandemic,” he wrote. “This is because they are more likely to react negatively to being forced to work in the office after enjoying the benefits of WFH.”
In other words, there’s no putting the toothpaste back in the tube. If firm performance is down, managers will just have to find someone else to blame.
