Return to office mandates don’t make companies more profitable, study finds

The office landscape was forever changed during the coronavirus lockdown, when workers were forced to shift gears to work remotely from home.

Four years later, companies are still scrambling to put the fragmented pieces back together in an effort to streamline the endeavors of their workforce. Some have shifted to a hybrid model, while other corporations, including Goldman Sachs and AT&T, have issued mandates that their workers return to the office full-time or four days a week — or risk losing their job for noncompliance.

When organizations give their employees the return to office ultimatum, they may be motivated in doing so by their bottom line to be profitable. However, a new study by the Katz Graduate School of Business at University of Pittsburgh on return to office mandates proves otherwise. The study, which was conducted on Standard and Poor’s 500 firms, found that there are “no significant changes in financial performance or firm values after return to office mandates.” Additionally, the study highlights “significant declines” in employee job satisfaction when demands and threats are placed on workers to report to the office in-person.

The subtext behind some of these mandates is that companies are trying to control their employees by having them within their direct sight and supervision, and under their proverbial thumb once again. In the case of AT&T’s return to work mandates issued to 60,000 managers, one manager even argued that the mandates were a thinly veiled disguise for conducting mass layoffs by forcing resignations from thousands of employees who are not able to relocate to the brick and mortar office setting.

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In an extreme case of throwing down the gauntlet on returning to work in-person gone wrong, CEO Bob Brisco of Internet Brands made a video that went viral before it was removed from the company’s Vimeo page (but it’s still available online elsewhere). In the video, Brisco said, “We aren’t asking or negotiating at this point. We’re informing how we need to work together going forward.” He added, “We’re better when we’re together.”

After facing backlash for the poorly received video, Internet Brands issued a statement to Business Insider that said, “Our executive team feels strongly that both our company and our employees are more successful when they can collaborate in person. The tone of the video was an intentional decision to keep the topic light and somewhat ironic, in the context of knowing very well that the Return To Office issue can be emotionally charged. Nonetheless, we take our individual and collective productivity seriously and firmly believe the best way to learn and grow is to be together.”

But according to the new study, we know that’s not the case — and in fact, the exact opposite may be true.

“We will not get back to the time when as many people will be happy working from the office the way they were before the pandemic,” Mark Ma, study co-author and associate professor at the Katz Graduate School of Business, told The Washington Post. “Mandates make workers less happy, therefore less productive and more likely to look for a new job.”

Additionally, Harvard Business School professor Prithwiraj Choudhury, who studies remote work, told the paper, “Requiring employees to work in-office to boost productivity in general has yet to prove itself out.”

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Many companies continue to offer a work from home model or a hybrid option for their employees as opposed to forcing them to return to the office. Tech.co spotlights such organizations in their list of several companies offering remote work in 2024. The list includes Intuit, which according to Tech.co, “…discovered that 90 percent of its staff appreciated not having to commute, and just 6 percent wanted to be in the office full time. Because of this, it developed a flexible remote work policy that has stayed in place, post pandemic.”

According to a Global Work-Life survey, the research is clear. The survey found that “remote workers exhibit higher job satisfaction, experience burnout symptoms less frequently, and, overall, report greater levels of happiness compared to hybrid and office workers.”

Happier employees are inclined to be more productive and eager to work for the overall benefit of their employer, thereby making the company more successful. Hopefully, the companies on the fence about issuing return to work office mandates are listening.