Companies with strict return-to-office policies are losing top talent and face hiring delays

[midian182]

In brief: If managers and CEOs need more reasons why implementing return to office (RTO) mandates is a bad idea, here they are: a new report found that companies with aggressive RTO policies lose more senior and skilled employees. Furthermore, these firms take longer to fill their job vacancies and their hire rates decrease.

Universities from the US and China collaborated on a paper titled Return to Office Mandates and Brain Drain, which tracked over 3 million tech and finance workers' employment histories reported on LinkedIn.

The study compared the effect of 54 S&P 500 firms' RTO mandates on their employee turnover and hiring.

The bottom line is that firms experience abnormally high employee turnover of around 14% following the implementation of RTO mandates. It's noted that the figure might be even higher in other industries given the better pay rates offered by tech and finance firms.

Related reading: Are return-to-office mandates actually masquerading as "quiet firing"?

A high turnover rate might not be too surprising, given the number of reports we've seen about Amazon's corporate workers leaving rather than being forced back in the office.

However, something that wasn't clear before is which employees are most likely to leave. The study shows that the increased turnover rates for these RTO firms are more pronounced in female, senior, and skilled employees.

The research suggests female employees were three times more likely to leave a company after an RTO policy is introduced due to family responsibilities. Senior and skilled staff are quick to depart as they usually find it easier to secure new jobs at companies that allow remote work.

It's not just a brain drain that RTO-focused companies have to worry about. The research shows hiring skilled workers to replace those who have left takes significantly longer. RTO firms take 23% longer to fill roles after an RTO mandate, and their hire rate decreases by 17%, according to the researchers.

"Taken together, our findings suggest that firms lose their best talent after RTO mandates and face significant difficulties replacing them," the report states.

The findings echo a previous study by the University of Michigan and the University of Chicago, which found a correlation between the departures of senior-level employees and the implementation of RTO mandates at tech firms such as Microsoft. Some left several months sooner than they might have without the policies, and many of them went to work for direct competitors, usually those that still allowed full-time remote work.

For all the anger against hybrid and full-time-in-office mandates, many companies continue to push the narrative that in-person work is more productive. Amazon has ordered its corporate workers back into the office five times a week starting next month, a move that is causing issues due to a lack of space. Dell, Tesla, SpaceX, Nothing, Boeing, UPS, JPMorgan Chase, and Goldman Sachs also demand pre-pandemic-style full-time office hours from staff.

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Companies with strict return-to-office policies are losing top talent and face hiring delays

 

[yRaz]

This will be a self correcting problem. Top talent can find a job that offers whatever they want. Companies that don't satisfy the demands of top talent will fall behind in sales and maybe even fail. The real problem is caused by the Commercial realestate market and companies are paying for unused office space. This is leading them to loosing valuable tax write offs. Commercial leases typically last 5-7 years so it'll be interesting to see what happens to both the commercial realestate markets and RTO mandates in 2025-2026. Companies are looking at renewing their office leases at the absurd market rates or letting them go. recently saw that over 40% of office space in New York is empty, can't wait to watch this bubble pop.

Unfortunately, I work in commercial realestate development so I'll likely be out of a job when it does. Strangely, most of what I've worked on over the last 4 years has been mostly apartment buildings(50-100 units), warehouses and factories. Now that I think about it, the closest thing to an office building I've worked on in the last 4 years is a new hospital

 

[GoldenGoat]

Commuting has a cost: miles on your car, gas, time out of your day that you don't get paid for. Cars aren't cheap. Dealing with traffic can be stressful and painful. When your employer starts demanding you to be in the office, they are effectively giving you a pay cut because they are forcing additional costs on you. If you get a pay cut, you reevaluate your position. At least for most people, these costs do get factored into your employment decisions. It's no different than being required to wear a suit and tie. A lot of jobs quit requiring that long ago because they realized they could get better workers for less money when they don't require you to buy expensive suits. If having suit and tie culture is more important to you than making money, then you might not actually be good at business.

 

[brucek]

It seems like basic math: if you are hiring for a position requiring frequent in person attendance, your candidate pool will be limited to those within reasonable commute distance. But if your job requires only internet connectivity, your hiring pool is far, far larger. That's a huge difference even before we get to any employee preference factor.

Maybe if your office is located in an area with a deep talent pool for the skill needed, this may not make such a large difference. But if you are not, you are probably at a steep disadvantage unless you happen to get lucky to find one of the few top shelf candidates in your area.

 

[Mr Majestyk]

I would like a hybrid approach where I could work at home at least 2 days a week. I used to work as theoretical physicist and rarely needed to be at University, but enjoyed it for social interaction. When I worked for Canon though, it was a soul-destroying experience and would have loved not to have had to turn up to that shithole more than once a month.

 

[human7]

"Will managers even care?"

Quiet layoffs, me thinks. Though, why they would want to loose top talent, I don't know.

On the one hand, I wish the company I work for was growing faster so there'd be more pay raises, benefits, etc. On the other hand, they don't have the money to force everyone to work in the office, and half the company works remote.

 

[yRaz]

"Will managers even care?"

Quiet layoffs, me thinks. Though, why they would want to loose top talent, I don't know.

On the one hand, I wish the company I work for was growing faster so there'd be more pay raises, benefits, etc. On the other hand, they don't have the money to force everyone to work in the office, and half the company works remote.

See, this is what I don't understand. Remote work allows companies to reduce the cost of growth and can make some business models that were unprofitable, profitable. Nearly all companies focus on growth, make green line go up. Remote work is a fantastic strategy for growth.

Did you know the average cost of a parking spot in a parking garage is $100,000 per spot to build? In many places, a parking spot can cost around $2000/m to rent in office buildings. This is often subsidized so a business will rent a X amount of spots for $500-1000 a month and then your daily parking fees make up the rest.

 

[monkeylove]

According to various sources, some are happier with telecommuting but others can't balance life and work, plus experience isolation. There's also higher felt efficiency but lower actual efficiency, or results are mixed. There's higher morale and engagement but also lower camaredie and feelings of being part of a team. There's also an effect on career progression, and likely because there's a lack of camaraderie and teamwork.

In general, there are pros and cons, and results appear to be mixed. Given that, it looks like a hybrid approach is preferable, with employees given the option to work from home a few days a week.

Interestingly enough, there are negative results for things like schooling.

Finally, it looks like with more automation, there might be more layoffs, and the latter also affected by companies that prefer to get cheaper (and sometimes, junior) labor than retain too many top talent and senior employees. At best, some prefer to hire the latter only to train new employees, who may eventually replace them.

 

[Win7user]

Bottom line, an employer hires people to work, yet this generation nowadays, wants to tell their employer what the rules are concerning their employ. Talk, about arrogant. If, they won't follow employer rules, then fire every one of them!!

 

[lonetac]

One person in this thread is just bitter and upset folks have a better work style than he does.

And we have been saying this for years. Top talent dictates its terms of work, not the other way around. Only bottom feeders "need" to be in the office to gauge productivity and propping up terrible managers whose only job is to stare over shoulders and crack a whip like they bring value or do anything important.

The other part of it is, I feel no need to prop up wealthy real estate developers making bucks off our misfortune.

I used to be forced to commute 4 hours a day or more. Now I never commute. Our company supported remote workers prior to covid and invested in it even more during covid. We have turned a profit every year. Evaluating employees remotely requires a process and isnt that hard when you are setting objectives and holding folks accountable.

The lazy folks get exposed very quickly and end up at the mandated rto jobs.

Even if I was forced to go to the office, which I wont be as my management isnt stupid, there is nothing to be gained. My team isnt there, my colleagues are not there. Many of our jobs are global, my team is spread out amongst 5 countries. As team lead I interact with them every day and have no need to micro manage them. We assign tasks, they do it. If they dont, we ask them why they didnt. If its a problem, we find another person.

Its not hard. Its amazing the nay sayers havent the brain capacity to understand how this works yet.

WFH allowed me to move out of an expensive city, save 4-6 hours of commuting a day, purchase a house and contribute to a smaller community financially x10 compared to where I was. Its good for America to have folks getting out of the cities and propping up these small business in towns. Cities have gotten out of control with costs. I lived in NYC for 14 years so talking from a bit of experience. You just paying for someone's 3rd mortgage and helping others get rich as you pay $20 for a turkey sandwich for lunch.

 

[Tran Bronstein]

Unfortunately, I work in commercial real estate development so I'll likely be out of a job when it does. Strangely, most of what I've worked on over the last 4 years has been mostly apartment buildings(50-100 units), warehouses and factories. Now that I think about it, the closest thing to an office building I've worked on in the last 4 years is a new hospital

Thanks for the insightful information and I hope that you will be able to use your skills to transition smoothly to other opportunities when the time comes. I agree with you that the commercial development aspect of real estate is dawning to a close, but there will always be a use for those spaces and properties as they transition into something else. Hope it all works out for your future.

 

[Nima304]

Bottom line, an employer hires people to work, yet this generation nowadays, wants to tell their employer what the rules are concerning their employ. Talk, about arrogant. If, they don't want to follow employer rules, fire everyone of them!!

You're right, an employer hires people to work, but employees can also choose where they want to work. These are two sides of the same coin, and a lot of people no longer want to work for companies that demand they show up to a physical office. Personally, I'll never drive back into work again if I can avoid it, and have gathered the qualifications and skills necessary to ensure that for every company that wouldn't hire me because they demand onsite work, there are dozens of others that'll hire me to be a fully remote employee. This trend towards remote work is not going away, and companies that remain in the past are going to lose out on talent until they correct their policies.

Your mindset of kowtowing to whatever demands an employer wants is dangerous. It wasn't that long ago that workers had zero protections and worked on average 100 hours per week. We've seen time and time again that businesses don't have workers' best interests at heart, so we as workers should demand the policies we want to see by refusing to work for employers that go said policies.

 

[Win7user]

You're right, an employer hires people to work, but employees can also choose where they want to work. These are two sides of the same coin, and a lot of people no longer want to work for companies that demand they show up to a physical office. Personally, I'll never drive back into work again if I can avoid it, and have gathered the qualifications and skills necessary to ensure that for every company that wouldn't hire me because they demand onsite work, there are dozens of others that'll hire me to be a fully remote employee. This trend towards remote work is not going away, and companies that remain in the past are going to lose out on talent until they correct their policies.

Your mindset of kowtowing to whatever demands an employer wants is dangerous. It wasn't that long ago that workers had zero protections and worked on average 100 hours per week. We've seen time and time again that businesses don't have workers' best interests at heart, so we as workers should demand the policies we want to see by refusing to work for employers that go said policies.

Yeah, it goes against the whims of an entitled generation, who simply don't want to follow the rules.

 

[Nima304]

Yeah, it goes against the whims of an entitled generation, who simply don't want to follow the rules.

Not sure how this is a valid response to anything I said. You strike me as the kind of person who creates toxic work environments, then complains about the work ethic of younger generations (e.g. "no one wants to work" or "young people are entitled"). You're pointing the blame outwards, when it solely lies with your mindset.

 

[Win7user]

Not sure how this is a valid response to anything I said. You strike me as the kind of person who creates toxic work environments, then complains about the work ethic of younger generations (e.g. "no one wants to work" or "young people are entitled"). You're pointing the blame outwards, when it solely lies with your mindset.

Yeah, okay, you win. Merry Christmas to you, and yours...

 

[ChipBoundary]

Anybody that refuses to work in office isn't "top talent", period. You are factually less productive when you work from home, no matter what you believe. Flat out, you want to slack off. You want to do chores around the house and such.

 

[lonetac]

Anybody that refuses to work in office isn't "top talent", period. You are factually less productive when you work from home, no matter what you believe. Flat out, you want to slack off. You want to do chores around the house and such.

False false and more false.

How to say you know absolutely nothing about the topic without saying you dont know absolutely nothing.

Nowhere in this diatribe was there even an ounce of truth and is just pure jealousy and you would like folks to be as miserable as you are.

As someone who does work in the industry, top talent absolutely determines the terms of work. Companies beg you to work for them. If you dont have that happening, you are not top talent and know nothing John Snow.

Yeah, it goes against the whims of an entitled generation, who simply don't want to follow the rules.

What rules? Rules you design and think everyone should live by? The rules of Henry Ford who designed the 9 to 5 to run manufacturing plants?

The rules of my company say we can wfh so it seems you have the issue with rules because of your narrow minded toxic point of view.

I bet you are super fun at parties. "Everyone stop having fun, there are rules!"

 

[Win7user]

False false and more false.

How to say you know absolutely nothing about the topic without saying you dont know absolutely nothing.

Nowhere in this diatribe was there even an ounce of truth and is just pure jealousy and you would like folks to be as miserable as you are.

As someone who does work in the industry, top talent absolutely determines the terms of work. Companies beg you to work for them. If you dont have that happening, you are not top talent and know nothing John Snow.



What rules? Rules you design and think everyone should live by? The rules of Henry Ford who designed the 9 to 5 to run manufacturing plants?

The rules of my company say we can wfh so it seems you have the issue with rules because of your narrow minded toxic point of view.

I bet you are super fun at parties. "Everyone stop having fun, there are rules!"

Yeah, yeah, yeah.... LOL

 

[Nima304]

What rules? Rules you design and think everyone should live by? The rules of Henry Ford who designed the 9 to 5 to run manufacturing plants?

The rules of my company say we can wfh so it seems you have the issue with rules because of your narrow minded toxic point of view.

I bet you are super fun at parties. "Everyone stop having fun, there are rules!"

Exactly. They say "follow the rules" as if we're in kindergarten, not adults working within a functioning economy. Employers set rules for employees, and employees set conditions for employers. The day my job demands I show up to an office is the day I quit and find a new job. Despite my email filters escorting all jobs with "onsite" and their variations to trash, I still see plenty of opportunities for fully remote positions.

 

[lonetac]

Exactly. They say "follow the rules" as if we're in kindergarten, not adults working within a functioning economy. Employers set rules for employees, and employees set conditions for employers. The day my job demands I show up to an office is the day I quit and find a new job. Despite my email filters escorting all jobs with "onsite" and their variations to trash, I still see plenty of opportunities for fully remote positions.

Our company, whom impacts nearly every person in the country, has a great way of handeling remote work.

We treat folks like humans, not machines. They are a resource. If someone needs to go pick their kids up during the middle of the work day, they can. Its ok. We are humans. If I have a headache and go lay down for an hour, its ok. I am human.

We evaluate people on performance and objectives. Not demanding they stay glued to their screen from 9-6 and micro manage them.

You know exactly the terrible person you dont want to work for when they start acting like some of the folks in this thread.

Employees are people. Jobs are jobs. If the job is getting done and objectives are met or exceeded, we shouldnt care too much.

I am much more productive working 8-5 than 9-6, guess what they let me do? Its about treating folks with dignity and respect. Everyone wins when everyone wins.

As team lead, I treat my team the exact same way. You got something you need to do, just give a heads up and make sure your work is done.

And I am with you, I would never go to an office again. My teams are global anyway. Call me lazy while I put in multiple 16 hour days willingly since I dont have to spend my life commuting. Sure, I am lazy. Employers love lazy employees like me. Ive never wanted for a job.

 

[lonetac]

Yeah, yeah, yeah.... LOL

Hey man, despite the conversation here, Have a great Christmas and Holiday!

 

[Win7user]

Hey man, despite the conversation here, Have a great Christmas and Holiday!

Merry Christmas, happy New Year!!

 

[Win7user]

False false and more false.

How to say you know absolutely nothing about the topic without saying you dont know absolutely nothing.

Nowhere in this diatribe was there even an ounce of truth and is just pure jealousy and you would like folks to be as miserable as you are.

As someone who does work in the industry, top talent absolutely determines the terms of work. Companies beg you to work for them. If you dont have that happening, you are not top talent and know nothing John Snow.



What rules? Rules you design and think everyone should live by? The rules of Henry Ford who designed the 9 to 5 to run manufacturing plants?

The rules of my company say we can wfh so it seems you have the issue with rules because of your narrow minded toxic point of view.

I bet you are super fun at parties. "Everyone stop having fun, there are rules!"

Merry Christmas and Happy New Year to you, and yours...