Office Mandates Don't Help Companies Make More Money, Study Finds

Remember that cheery corporate video Internet Brands tried announcing their new (non-negotiable) hybrid return-to-office policy (with the festive song 'Iko Iko' playing in the background)? They've now pulled the video from Vimeo.

Could that signal a larger shift in attitudes about working from home? The Washington Post reports:

Now, new research from the Katz Graduate School of Business at the University of Pittsburgh suggests that office mandates may not help companies' financial performances, but they can make workers less satisfied with their jobs and work-life balance... '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,' said Mark Ma, co-author of the study and associate professor at the Katz Graduate School of Business. Additionally, mandates make workers less happy, therefore less productive and more likely to look for a new job, he said.

The study analyzed a sample of Standard & Poor's 500 firms to explore the effects of office mandates, including average change in quarterly results and company stock price. Those results were compared with changes at companies without office mandates. The outcome showed the mandates made no difference. Firms with mandates did not experience financial boosts compared with those without. The sample covered 457 firms and 4,455 quarterly observations between June 2019 and January 2023...

'There are compliance issues universally,' said Prithwiraj Choudhury, a Harvard Business School professor who studies remote work. 'Some companies are issuing veiled threats about promotions and salary increases... which is unfortunate because this is your talent pool, your most valuable resource....' Rather than grappling with mandates as a means of boosting productivity, companies should instead focus on structuring their policies on a team basis, said Choudhury of Harvard. That means not only understanding the frequency and venue in which teams would be most productive in-person, but also ensuring that in-person days are structured for more collaboration. Requiring employees to work in-office to boost productivity in general has yet to prove itself out, he added.

'Return-to-office is just a knee-jerk reaction trying to make the world go back to where it was instead of recognizing this as a point for fundamental transformation,' he said. 'I call them return-to-the-past mandates.'


The article cites US Bureau of Labor Statics showing movement in the other directionRoughly 78% of workers ages 16 and older 'worked entirely on-site in December 2023, down from 81% a year earlier' — and for tech workers only 34% worked entirely on-site last month compared with 38% last year.

'Still, some companies are going all in on mandates, reminding workers and sometimes threatening promotions and job security for noncompliance. Leaders are unlikely to backtrack on mandates once they have been implemented because that could be viewed as admitting they made a mistake, said Ma.'

Read more of this story at Slashdot.