Last week Amazon joined the list of corporations closing the chapter on remote work with an announcement that most workers would be required to be on-site five days a week starting January 2025. The question of what work model results in the best productivity – and therefore profit – has been a big topic of discussion in recent years, especially as the way we work has continued to evolve since the pandemic.
Today we’ll explore how this shift has affected the broader workforce, impacted profit, and why businesses may be pushing harder for a return to the office.
Shifting sentiments
Until January, Amazon will retain its hybrid work model, an option widely adopted by many businesses. Employees haven’t exactly been keen to follow the shift away from remote days, even when being tempted with free lunches, donations to charity, and other perks. A portion of the workforce simply doesn’t want to go back to the office and trends such as coffee-badging have emerged.
Some businesses are taking a harsher approach to return-to-office (RTO) mandates by using employee location data to track who is meeting the requirements, with nonattendance impacting performance reviews and promotions for workers. This has sparked conversations on who these mandates truly benefit, including the disproportionate effect RTO mandates have on women in the workforce, who often bear the brunt of childcare and other domestic duties for their household.
Who bears the costs?
The COVID-19 pandemic truly changed the way we work. According to the U.S. Census Bureau, the amount of remote-based workers in the U.S. tripled from 2019 to 2021, with women making up the majority of remote workers. This shift led to companies shedding office space, with early 2023 marking “a milestone that exceeded the vacancy rate following the 2008 financial crisis” and nearly a fifth of office spaces sitting vacant. Among the giants that have sold or canceled some of their commercial spaces are Intel, Yelp, Facebook, Nike, Salesforce, and REI.
It comes as no surprise that this has taken a massive toll on the business of commercial real estate. Additionally, gross office rents in the U.S. increased over 10% from 2020 to 2023, imposing a greater cost to the companies that keep physical office space. Employees also incur greater costs working onsite than they do working remotely, spending on average $51 more a day (or $71 a day for those with pets). So, considering the costs all around, why has there been a continued push to return to the office?
Does collaboration guarantee productivity?
Different work styles, proximity bias, and more opportunities for collaboration all play a role. The latter may be a key factor, as “86% of employees in leadership positions blame lack of collaboration as the top reason for workplace failures.” Amazon CEO Andy Jassy cited increased team collaboration as a major benefit of having the workforce return to being fully in-person. He is not the only leader to prefer an in-person workforce – a 2022 Microsoft study found that “85% of leaders say that the shift to hybrid work has made it challenging to have confidence that employees are being productive.” Though collaboration is important to productivity – and therefore profits – being in the office does not necessarily guarantee an increase in collaboration or productivity.
According to a long-running Gallup study, there’s strong evidence that employee engagement – involvement and enthusiasm employees have for their work and workplace – has a strong correlation with performance, with “top-quartile business units achieving 23% higher profit than bottom-quartile units.” When measuring employee engagement, Gallup found three days onsite to be optimal, with fully on-site roles having the worst engagement scores. It’s also worth noting the data revealed that receiving meaningful feedback boosted employee engagement four times more than having the optimal amount of onsite days, regardless of the number of days spent in the office.
