The data is in: RTO policies don't improve employee performance or company value
businessinsider.com
businessinsider.com
> We collect RTO information for S&P 500 firms through manual news searches on Google and Factiva. Specifically, for each firm, we search by using the company’s name and the following keywords: ‘Work from Home’, ‘return to office’, and ‘days required working in the office’. We focus on S&P 500 firms because these large firms are closely followed by media, thus mitigating concerns about media coverage bias. Among the S&P 500 firms, 137 publicly announce their RTO policy and are classified as RTO firms in this study. These 137 firms become our treatment firms
They then correlate this with other (ahem) high quality datasets...like Glassdoor reviews. Their "determinant model" takes into account CEO gender and politics and an (arbitrary) measurement of "CEO power" [2], but doesn't take into account even basic things like industry, other than if the company is "high tech" or not.
If you bother even skimming the thing, you can see that it isn't serious -- there's a weird editorial quote at the top of page two, from a PR firm, which calls RTO "eyewash for investors". Real academic papers don't do this kind of thing. This is like a bad undergrad term paper.
[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4675401
[2] "CEO relative power, calculated as CEO’s total compensation divided by the average total compensations paid to the four highest-paid executives in the firm" (p. 40)
It's like we're trapped in a time loop.
Shareholders and board members don't want their company to RTO, they want the entire industry to RTO. If their own company RTOs and CBD real estate crashes anyway, they're the ones that are left holding the bag, whether it's because of big fixed term leases, real estate investment or whatever other skin they have in the game.
If you're stuck with 5 more years of 2019 rates and all your competitors have downsized, your cost per employee is going to be much higher.
Some percentage of the larger companies are going to own their office space too.
I'd guess as we get further from the start of covid (bit over 4 years now?) the pressure to RTO will dwindle as more companies downsize.
See also: open offices.
It's a con. Everyone knows it's a con. But it's one of those cons that get so big, everyone just pretends like they're not rotten liars.
Most businesses don't own their office space afaik, so why would a business care about protecting real estate values? If anything, wouldn't the majority of businesses prefer to see a decline in real estate values as that would lead to a decrease in rent?
This rationale makes no sense to me. Forcing the totality of all employee interactions to a device owned and controlled by the company seems to provide a more complete monitoring solution than any in-person monitoring could provide.
The point is that work from home doesn’t ruin some real estate investment scheme. It reduces their expenditures, in the same way that they don’t have to buy cubicles.
But that cost is miniscule, they would prefer to pay it to get the (perceived) productivity and monitoring benefits.
The average cost is $37.64 per square foot and ~250 sq per employee (you don’t just pay for cubicles) it adds to ~9.5k / employee per year which is far from insignificant.
Worse it’s dangerous as layoffs don’t instantly end leases and downturns are terrible times to try and sublease office space.
10k on an employee whose total cost is at least 120k is not insane at all. Computer equipment is ~5k (also for the same reason). Not to mention support staff like IT (guess why).
Some places have higher salaries but also higher rent. Manhattan for example averages 81$/square foot.
It's way easier to control people in an office.
Employees have to submit to groupthink and can be monitored and caught alot easier if they dont submit to this groupthink.
It's a lot easier to control people through groupthink than via reason.
In an office not only do you have to do your job but you also have to be "a person the group would want to have a beer with".
You don't want to lose your job for not being a cultural fit do you?
So management has a lot more control over the situation.
Ive been depressed and withdrawn and just focusing on work before and been called into managements office and told Im not "acting like myself, is everything ok?" with a bit of an ominous tone and so I had to pretend to be outgoing and cheerful when I wasnt.
It's easier to monitor people in an office than it is to give them company owned computers with spyware on them? It's easier to monitor people at the watercooler than to read their slack DMs?
> In an office not only do you have to do your job but you also have to be "a person the group would want to have a beer with".
The same holds true for remote work. Your unwillingness to join too many remote happy hours is noted.
If WFH is truly the future, we should be teaching our kids how to operate in a virtual environment rather than in person.
Employers also didn't care.
This has been policy for over a century now, and there are plenty of research papers that show this required time off has an overall benefit to society.
Any counter claims must _prove_ such counter claims against the overwhelming evidence provided by the European Union and their required time off policies.
Junk article with an agenda. RTO costs companies money, costs investors money, and costs boards of directors their constant revenue increases.
Good. Invest _this_.
Debating that one is objectively better than the other is silly.
You have to look at the impact it has on aggregate. WFH is going to prevail in the medium to long term. It's inevitable.
Every company is different.
Meta did RTO and just had one of the strongest quarters in history. I guess that "proves" that RTO is actually beneficial and that people trying to wfh are just lazy.
Why is this even shared here? What a joke.
Managing people is maybe easier in person. It's certainly easier if you're a 'controlling boss', as you can intimidate and harry employees much more effectively in the flesh (I'm not advocating that btw).
It makes you wonder. Why are companies often so against hiring (as employees) people who have been freelance, or run their own business, for example? Perhaps a good part of the whole institution of the 'company' is about coercion, rather than just 'working together for a common purpose'.