In the ongoing debate over remote work, senior executives, including middle managers and business owners, are showing a strong preference for continuing remote work in 2024. This contrasts with less than half of employees who share the same sentiment. Despite this, there is still some ambiguity surrounding the preferences of both employees and managers regarding remote work.
Although some CEOs have been advocating for a return to the office, research indicates that many bosses are not entirely enthusiastic about the idea of eliminating remote work. Future Forum's February 2023 survey revealed that over 80% of executives and non-executives desire flexibility in their work location, including a majority of those who are currently in the office full-time. This sentiment extends to high-earners as well, with a July 2023 report from McKinsey indicating that a third of employees earning over $150,000 would consider leaving their jobs if required to return to the office full-time. The demand for remote jobs remains high, even as hybrid work arrangements prevail and are preferred by employees.
The discrepancy between managers' true preferences for flexibility and the implementation of return-to-office (RTO) mandates can be attributed to financial motives and pressure from shareholders or higher-ups. It is noted that most RTO mandates are initiated by top-level executives, with leaders feeling obligated to comply with these directives, regardless of their personal inclinations. This pressure has been further exacerbated by companies facing demands from activist investors and the weakened bargaining power of middle managers following the decline in job market competitiveness.
At the core of executives' decisions for stricter RTO requirements, despite their preference for remote work, lies the issue of unused office space as a sunk cost. Companies, eager to recover their investments and alleviate the anxiety induced by the sight of empty, expensive office buildings, are compelled to enforce RTO mandates. The considerable cost of office space in cities like New York, averaging about $16,000 per employee per year, further amplifies this concern.
The plight of companies with extensive real estate footprints is complicated by long-term office leases and previous investments made to attract employees back to the office. As a result, reining in these costs has become a focal point for CEOs and CFOs, leading them to perceive compelling employees to utilize the space as the best course of action.
Additionally, despite bosses' personal desire to work from home, many find it challenging to manage employees remotely. This is reflected in the difficulty faced by managers in supervising team members from a distance, with the lack of training in managing distributed teams compounding the challenge. The inclination of most managers to prefer working from the office due to the ease of in-person supervision also supports this perspective. Moreover, many business leaders have reported improvements in revenue, productivity, and employee retention since returning to the office, further highlighting the struggles associated with remote management.
Given these complexities, it is evident that the delicate balance between remote and in-office work is far from being realized. The potential for widespread employee dissatisfaction and turnover due to misaligned work policies signifies the need for a more thoughtful and strategic approach to the implementation of return-to-office plans.