COMP NEWS – Return-to-office (RTO) mandates are becoming increasingly popular among executives, but data demonstrates that forcing workers back into the office does little besides make them unproductive and miserable.

For some, having to work from home during the COVID-19 pandemic was stressful. Parents balanced job duties while caring for children. Some struggled to set up a home office and adjust to new tools, like video conferencing. Lonely workdays at home added to social isolation. The line between work and life blurred.

 

For others, working from home was a boon—comfort, convenience, flexibility, no commuting or rush-hour traffic, no office-environment distractions. When the acute aspects of the pandemic receded, some who at first struggled began to settle into a work-from-home (WFH) groove and appreciated the newfound flexibility.

 

Then, bosses began calling their employees back to the office. Many made the argument that the return-to-office (RTO) policies and mandates were better for their companies; workers are more productive at the office, and face-to-face interactions promote collaboration, many suggested. But there’s little data to support that argument. Pandemic-era productivity is tricky to interpret, given that the crisis disrupted every aspect of life. Research from before the pandemic generally suggested remote work improves worker performance—though it often included workers who volunteered to WFH, potentially biasing the finding.

Researchers examined several firms on the S&P 500 list to determine if RTO mandates had measurably improved an organization’s financial metrics. Their results point to no discernable benefits in financial metrics. They did find a notable decrease in employee satisfaction.

For a clearer look at the effect of RTO policies after the pandemic, two business researchers at the University of Pittsburgh examined a sample of firms on the S&P 500 list—137 of which had RTO mandates and 320 that clearly did not between June 2019 and January 2023. The researchers collected publicly available data on each company, including financial data and employee reviews. They then looked at what factors were linked to whether a firm implemented an RTO policy—such as the company’s size, financial constraints, and CEO characteristics—as well as the consequences of the RTO mandates—employee satisfaction and financial metrics of the firms.

 

Overall, the analysis, released as a pre-print, found that RTO mandates did not improve a firm’s financial metrics, but they did decrease employee satisfaction.

 

Drilling down, the data indicated that RTO mandates were linked to firms with male CEOs who had greater power in the company. Here, power is measured as the CEO’s total compensation divided by the average total compensation paid to the four highest-paid executives in the firm.

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