Returning to the office has become a popular strategy for S&P 500 firms looking to boost productivity and improve financial performance after a dip in stock prices. But is this approach actually working? According to a 2024 study and a range of experts, the answer is complex, with many pointing to a disconnect between the intent of return-to-office (RTO) mandates and their real-world impact.
The Flaw in the Mandate: Investing in "Where" Over "How"
Many experts agree that simply bringing people back to the office won't automatically spark collaboration or innovation. As Lena McDearmid, Founder and CEO of Wryver, points out, "Where people sit matters far less than how they are set up to work." She notes that many RTO mandates are implemented without meaningful investment in the systems and tools needed for effective collaboration.
A report from Australia’s Productivity Commission supports this view, finding that a lack of investment in technology, not hybrid work, is the real cause of performance drops. Commutes can also consume hours that could be used for focused work, and once at the office, employees may still be working with outdated tools and inefficient processes.
The Human Cost: Trust, Engagement, and Psychological Safety
Several experts highlight the negative impact RTO mandates can have on employees. Kate Vawter, Founder and CEO of Ascent Solutions, argues that these mandates can communicate a lack of trust, causing employees to feel like "cogs in a machine." This can decrease psychological safety, which is crucial for critical thinking and problem-solving. Pyper L. Cali, a Senior Product Manager at TikTok, observed that forcing a return to the office can lead to feelings of resentment rather than collaboration, ultimately hindering productivity.
Annalee Malone, a Benefits and Compensation Manager at Total Safety U.S., suggests that RTO mandates coupled with layoffs can create a climate of instability. Forcing employees to be together in person can lead to shared negative opinions, which are more easily suppressed in a remote setting. The "quiet firing" trend, where companies push employees to resign by mandating RTO, also damages morale and trust.
A Better Approach: Purposeful Design and Flexibility
Rather than focusing on where people work, many experts recommend focusing on the how and why. Angela Heyroth, Principal at Talent Centric Designs, advises leaders to define the goal of in-person time, using it for high-value activities like brainstorming, team connection, and mentorship. She calls this "designing ways of working," which can be a shared framework that aligns business needs with employee flexibility.
Mark Yeramian, Cofounder and CEO of Moast.io, shares a positive experience with a hybrid model, noting that intentional office time for collaboration and team connection has been effective for his company. Bonnie Dilber, Senior Manager of Talent Acquisition at Zapier, emphasizes that flexibility is a key factor for retaining top talent, especially for working parents who need to balance professional and personal responsibilities.
Hidden Costs and Talent Loss
The financial and operational costs of RTO mandates are also a concern. Ryan McDonald, COO of Resell Calendar, points out that office space is a significant fixed cost, and increasing its use requires additional spending on utilities, IT infrastructure, and amenities. This money could be better invested in revenue-generating activities like product development and marketing.
Suvrangsou Das, CEO of EasyPR LLC, discusses the impact on hiring, particularly for global teams. Strict in-office requirements can reduce the available talent pool by as much as 40%, forcing companies to either hire less-skilled workers or incur costly relocation expenses.
Ultimately, the consensus among these experts is that while the office can be a valuable tool for collaboration, mandating a return without a clear purpose or intentional design is likely to backfire. The most successful approach seems to prioritize trust, flexibility, and a focus on outcomes rather than physical presence.