To Return or Resist: The Impact of Return to Office Mandates in the Finance, Tech, and Government Sectors
By Angelina Fulton and Akhil Gaba
Image by Jirsak via Shutterstock
FINANCE SECTOR
Once a widely accepted and standardized approach to work, in-office work days are now labeled as unnecessary, inconvenient, and an overall dated approach to work. Return-to-office mandates are increasingly sparking controversy regarding their efficacy and purpose, with many workers criticizing the reasons that top executives are providing for their necessity. Attempts at return-to-office mandates have received aggressive pushback post-pandemic by employees who have found flexibility and satisfaction in the work-at-home and hybrid models. This is especially evident in the financial sector where the opinions of leading CEOs seem to chime loudly. The mandate controversy proves a challenge when finding a common ground between providing accommodation for the altered values of employees post-pandemic, and the general workplace values of decision makers, especially when most of an institution’s operations can be performed sufficiently as remote work.
2023 was the year of momentum towards return-to-office mandates for many financial firms. As companies have incrementally recovered logistically and financially from the pandemic, strides towards the return-to-office mandate were imminent in the financial sector, and several firms gearing up to switch over to an in-person approach. In recent months, Citigroup Inc. workers faced managers who were constantly reminding them of their expectations of in-office work. BlackRock Inc. extended their in-person work requirement from three days a week to four. This past October, SBC Holdings’ employees were required to be in-office following a new mandate, and both Goldman Sachs and JPMorgan Chase began reinforcing this idea with a more specific outline of five days a week.
Heading the mandate are firms Goldman Sachs, JPMorgan Chase, and Morgan Stanley, all of which have been advocating for the in-office work environment, believing that it would create a more engaging work culture and opportunities for interactive learning. The CEO of JPMorgan Chase & Co. openly displayed his stance on the matter; “I completely understand why someone doesn’t want to commute an hour and a half every day, totally got it. Doesn’t mean they have to have a job here either.” Other large financial institutions seem to follow suit. Goldman Sachs’ David Solomon stated the work from home mandate to be an aberration, while Ken Griffin of Citadel Securities described his fear that working from home would harm the nation, wishing that President Joe Biden would make efforts to change the regime. Financial leaders are making their views in support of return-to-office unequivocal, many putting aside the preferences of their workers. Morgan Stanley’s James Gorman states his view in an interview; "They don't get to choose their compensation, they don't get to choose their promotion, they don't get to choose to stay home five days a week.” Some firms have even already implemented the switch to in-person, with Blackstone’s return to in-office five days a week having started in June 2021.
To exacerbate the matter, the implementation of a strict return-to-office mandate could lead firms to face less productivity and higher unemployment. 700 part-time remote-working Deloitte financial executives were surveyed on their willingness to return to work in person, of which 66% reported they would likely quit if ever ordered to return to work full-time, five days a week. Deloitte’s study concluded that men and women equally desire flexibility, a likely manifestation of the pandemic’s reshaping of employee values. A Bloomberg Markets Live Pulse Survey conducted between May 29th to June 2nd, 2023, showed that only about 20% of financial professionals prefer to work in office, and over half said they prefer at least a hybrid model. One out of two employees in the study said they would change jobs if asked to spend more time in office. Some financial institutions are at more risk than others; over the years, investment banks have proven to have a higher churn rate. Such mandates could further worsen an already poor employee retention rate, which is a risk that firms are measuring closely and creating the best possible models that retain employees while matching their own company culture.
TECH SECTOR
The technology sector, notorious for its reputation of constant employee burnout and long hours, encounters the greatest challenges when it comes to the severing opinions of company executives and their employees. Inevitably, return to work mandates creates a shockwave of disturbance among employees who have adjusted to a hybrid or completely online work model in the technology sector.
Tech companies, once a driving force of the work-at-home pandemic regime, are facing a workforce with changing values. A noteworthy company doing so is Zoom, a company once testing the limits of what it looks like to be a worker is now telling employees that they must work in an office at a minimum of two days a week if they live within 50 miles of their work office. A 40 hours a week in person mandate was enforced by social media outlet X, of which morphed into a full office-only work environment in 2022 following Musk’s acquisition of Twitter. Tech giants like Amazon, Google, and Meta have also begun implementing return-to-office mandates at a minimum of at least three days a week.
On two sides of the scale are two different sets of values; the benefits to return to office in the technology sector on company stock performance, and the retention of employee talent. An Envoy study showed that when tech companies’ stock performance and RTO policies were compared, companies with employees required to go in-person five days a week had the highest stock performances YTD and YoY. The study also found negative YoY stock performance in companies with no in-office requirements. Atlassian takes a different approach and view on the benefits of a hybrid model in tech, committed to a model without mandatory in-office attendance. Annie Dean, Vice President of Atlassian says with more than 11,000 employees to date, they are the largest company in the world committed to distributed work at such a large scale. Views on any direct benefits on company stock performance due to in-office mandates are tested with a statement made by Dean, who believes that it is unlikely companies will all move toward restrictive office policy as “real productivity problems include “back-to-back meetings, having minimal clarity about what goals you’re trying to move forward, overflowing inboxes, vague processes.” Her views on the nature of jobs in the tech sector are followed by the belief that none of these issues are fixed by simply returning to the office, and any direct connections made to improvements in company performance from return-to-office are hard to prove and measure, rather, improvements and attention to processes drive real productivity especially in an industry with high burnout rates.
GOVERNMENT SECTOR
Governments are grappling at all levels with whether to implement RTO mandates for their employees. The impact of these decisions is far-reaching, influencing political dynamics, employee perspectives, talent retention, and the broader economy. The Biden administration's shift towards supporting in-person work, as outlined in the memo by Chief of Staff Jeff Zients, reflects the delicate balance between political pressures and employee preferences. Internal surveys at U.S. agencies such as the EPA (Environmental Protection Agency) and the NSF (National Science Foundation) underscore the overwhelming support for remote work among employees, with a striking 66% stating they would consider leaving their jobs if flexibility in remote work is reduced. However, the administration's emphasis on returning federal employees to the office aligns with the notion that a vibrant workplace fosters collaboration and economic activity.
One of the primary concerns associated with RTO mandates is the potential loss of talented government staff. Surveys from Eagle Hill Consulting and Federal Times indicate that a significant percentage of government workers would consider seeking new employment if remote or hybrid working options are reduced. This poses a risk to the ability of these agencies to effectively serve the public, emphasizing the need for a delicate approach to talent management. Reports from Greenhouse, the Federal Reserve's SHED (Survey of Household Economics and Decisionmaking), and Unispace highlight the damaging consequences of mandated return to the office. High levels of employee attrition, recruitment challenges, and resistance to traditional work arrangements are among the most significant findings. The report stresses the importance of understanding cognitive biases, such as status quo bias and anchoring bias, in creating workplace strategies that resonate with employees in the era of flexibility. Employees' resistance to returning to pre-pandemic work arrangements is not just about inconvenience but reflects a broader societal shift towards valuing flexibility.
President Biden's push for a federal hybrid workplace introduces a nuanced approach, acknowledging the prevalence of hybrid or fully remote work schedules in the private sector. A survey by the Conference Board indicates that 73% of respondents find it difficult to entice workers back to physical offices. However, challenges in enticing workers back to physical offices and potential unintended consequences, such as talent migration to the private sector, raise questions about the effectiveness of such a strategy.
Canada's implementation of a return-to-office mandate adds another perspective to the discussion. The call for a standardized hybrid work model and union opposition highlight the complexities in achieving a balanced approach that considers employees' unique circumstances and job requirements. Two federal unions, The Professional Institute of the Public Service of Canada and the Canadian Association of Professional Employees have urged the government to reconsider the mandate, emphasizing that 76% of employees are willing to leave their jobs if flexible work schedules are discontinued. While the call for a standardized hybrid work model is logical, the union opposition raises questions about the feasibility of a one-size-fits-all approach. It prompts reflection on the importance of understanding local nuances and unique job requirements in crafting effective workplace policies.
As governments navigate the complexities of return-to-office mandates, it is evident that this is not simply a logistical puzzle, but a profound socio-economic shift. Beyond the statistics and survey results, the need for introspection on the nature of work is growing, the expectations of the modern workforce, and the evolving role of governments. Striking a balance between political directives and the genuine needs and desires of employees is crucial. A tailored hybrid approach grounded in data, transparency, and an understanding of cognitive biases is a necessary reflection of our evolving understanding of work and its place in our lives.
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