Posted on 08/15/2023 10:58:01 AM PDT by ShadowAce
After three years of haphazard plans for getting workers back at their desks, the return-to-office movement has entered a phase of remorse.
A whopping 80% of bosses regret their initial return-to-office decisions and say they would have approached their plans differently if they had a better understanding of employees' office attendance, their usage of office amenities and other related factors, according to new research from Envoy.
"Many companies are realizing they could have been a lot more measured in their approach, rather than making big, bold, very controversial decisions based on executives' opinions rather than employee data," Larry Gadea, Envoy's CEO and founder, tells CNBC Make It.
Envoy interviewed more than 1,000 U.S. company executives and workplace managers who work in-person at least one day per week.
Some leaders lamented the challenge of measuring the success of in-office policies, while others said it's been hard to make long-term real estate investments without knowing how employees might feel about being in the office weeks, or even months, from now.
Kathy Kacher, a consultant who advises corporate executives on their return-to-office plans, is surprised the percentage isn't higher.
"Many organizations that attempted to force a return to the office have had to retract or change their plans because of employee pushback, and now, they don't look strong," says Kacher, the president of Career/Life Alliance Services. "A lot of executives have egg on their faces and they're sad about that."
As some business leaders accept hybrid work as a permanent reality, others are backtracking on earlier pledges to let employees work from home on a full or part-time basis.
As of July, 59% of full-time employees are back to being 100% on-site, while 29% are in a hybrid arrangement and 12% are completely remote, according to new data from WFH Research. Offices are still only half full compared to their pre-pandemic occupancy.
Across industries, major corporations including Disney, Starbucks and BlackRock are requiring employees to spend more time at the office, with executives often citing the need for more in-person collaboration.
Zoom is the latest to reverse course, telling employees who live within a 50-mile radius of a Zoom office that they need to come in at least twice a week.
It's an abrupt shift from the company's previous policy, which allowed employees to choose between hybrid, in-person or permanent remote work.
"We believe that a structured hybrid approach — meaning employees that live near an office need to be onsite two days a week to interact with their teams — is most effective for Zoom," a company spokesperson said in a statement to CNBC Make It, adding that the company will "continue to leverage the entire Zoom platform to keep our employees and dispersed teams connected and working efficiently" and "hire the best talent, regardless of location."
The sunk cost of unused office space has been a major factor in companies' decisions to change their RTO approach, says Kacher.
Even six months ago, companies were willing to eat these costs in a tight labor market to recruit and retain talent. But now, "Some companies are getting impatient, and want to recoup these large investments," Kacher explains.
In New York City, office space costs, on average, about $16,000 a year per employee, the New York Times reports.
Yet the constant risk of losing top talent has been enough to make companies reconsider their strict RTO mandates. Research has shown that companies that put pressure on employees to return to the office are more likely to experience turnover issues than those that don't.
Companies that have mandated a strict return to the office three days a week without first seeking employee input are experiencing the most angst, Kacher adds.
"They're the ones struggling with retention and recruitment," she says. "Some of the companies I work with have even scaled back the number of in-office days they're requiring in response to employee backlash."
The companies that are seeing the most success with returning to the office appear to be the ones that are making decisions with their employees, rather than for them.
Take Ernst & Young, for example.
The global accounting and consulting firm weathered some employee criticism for its initial return-to-office announcement in June 2021, when the firm told employees that they would be encouraged to spend 40-60% of their time in the office.
Their plan was put on pause through the end of the year as Covid-19 cases ticked up once again throughout the U.S., so EY leaders used that time to ask employees about their reluctance to come into the office.
Common threads stood out to Frank Giampietro, EY's chief wellbeing officer for the Americas: Employees weren't sure what to do about pet care or child care.
In response, EY announced a fund in February 2022 to reimburse up to $800 per year for commuting, pet care and dependent care costs for each of its 55,000-plus U.S. employees.
The fund, which is ongoing, had an immediate positive impact on employees' in-office attendance, Giampietro adds. Since EY first rolled out this benefit in February 2022, EY has seen a 150% uptick in office attendance across the U.S.
"It didn't take a complete rehaul of our return-to-office policies to make employees happy," he says. "We just needed to listen to our people and understand what, specifically, was problematic for them, and offer resources to address that."
Kacher anticipates that it will take at least another year or two before companies settle into an office routine that employees are content with and bosses don't regret.
"Some organizations are still in denial that people aren't coming back to the office, and some have moved into the acceptance phase, where they're ready to think more creatively or differently," she says. "But it'll take time for all of us to get there together."
There's some truth to that...
That’s a bit broader than I’d put it. Old style management won’t work for one thing, and forcing return to office may in some cases be bosses trying to compensate for their inability to manage a remote workforce.
“Too bad the employer wasn’t the one paying the salaries of the employees, then they’d be in a strong position...”
That only really works if no other employers are hiring.
It’s going to be the other way around. The private sector is going to migrate to 100% work-from-home operations as leases come up for renewal and companies save tons of money by downsizing their office space. Government workers will be forced back to the office because: (1) the employer doesn’t care about the cost of the space, and (2) they are going to face political pressure to save this nation’s urban dumps.
You’ll be able to point out their posts easily…
How did they do pet care before Covid?
I agree with both of your points, but this one especially. It's going to be a competitive advantage for a company NOT to have a burdensome financial commitment to some aging piece of real estate. If the workers are at home, it's easier to make the bottomline and turn a profit. The company that tries to hold on to the skyscraper is going to have real uphill struggle to make a profit. It's not rocket science.
Everyone is applauding our new “stay at home work” culture. Wait until “stay at home work” is replaced by AI.
yeah I had plenty of those types.
One of my clients insists on me being in the office one day a week. Travel time is work time in my contract, as is fuel costs.
So I drive the 5 hours there on a Sunday, charge them that as overtime for wasting my weekend, stay in a $150 a night hotel, expense my Sunday dinner, and at 1pm on the dot I set off on the drive home so as to avoid doubling the overtime bill.
That accounts for four hours of productivity and is costing them at least $300 a week, and all they are actually doing is paying me $300 to sit in the car for ten hours.
The other 31 hours of work I do get done in addition to the 10 hours they insist on wasting over a dumbass reason for 4 hours of presenteeism, I get done by getting up at 8:15 every morning and walking to a home office that’s got 3 monitors, a laser printer, and a dedicated broadband line.
By 6pm I’m feet up in my living room having done more than I’m actually contracted to do.
Bosses who insist on presenteeism for the sake of it are nutters.
It sounds like you are a contractor not an employee.
Some of us are applauding it because we warned about these inevitable consequences way back in March 2020 when this COVID idiocy started.
Now these morons are reaping what they’ve sown. Too bad.
Some of these genius executives mandated vaxxes for employees that worked at home full time.
The best employees laughed at the stupidity and went on to greener pastures.
The “tight labor market” is not the issue.
You can hire all the dregs you want.
What is “tight” is highly skilled specialized skills.
Those workers can their own shots.
Covid (never vaxxed) wrecked my health. I now work from home because I can no longer drive.
I’m still bringing in big accounts, so my bosses don’t care.
AI can replace at the office work.
The AI can sleep through boring meetings even better than real people!
Sorry your health went south, glad you’re doing well otherwise.
I understand not answering, but did you have a seizure or something similar?
It depends on the industry
In my field as well as others I’ve talked to the same work now being sold as “Work remotely” pays significantly less than the traditional work environments.
Companies found a way to save money in this remote work scam. They offer less pay to remote workers because to many it’s worth the cut in pay to be at home...
.. Doing other stuff.
Yeah?
I’m here in the Bay Area.
How do you see “Back to Work” happening.
Just spoke with several customers who were suppose to be ready for RtO and was informed they will pay for their logo on the outside of the building 1st Qtr or 2nd Qtr but, they will be working from home from now on.
Largest law firm in San Francisco went from 1100 employees on site and 10 floors, down to 2 floors and 100 on site....tops.
roughly 75% of buildings in San Francisco Financial District are empty.
The Financial District taxes accounted for 70% of tax revenue, pre-covid.
Meanwhile, on the Peninsula, about 60% of buildings are occupied.
We ain’t coming back to office, if you can do Zoom or email for most of the day....
The only people who need to be on site is anyone who works with their hands ...
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