This article originally appeared in Barron's
Robust office use continues to elude even the most determined CEOs. When new in-office requirements roll out, employees immediately resist.
The struggle is no surprise. Most return-to-office mandates prevent their own success. Yet many in leadership press on blindly, fueled by the false belief that U.S. office occupancy is steadily rising and that the alleged increase improves productivity. In fact, average office occupancy remains at 50% of its pre-pandemic level. Vacancy in office buildings has reached a 40-year high. And loan distress in office investments continues its historic rise. Business leaders must recognize that their approach to in-office requirements has poisoned corporate culture and failed to substantially improve attendance.
New Research Demands a Change in Strategy
Speculation about how and when we would frequent our offices again began almost immediately after the pandemic closed them. Many of us in the industry listened to and participated in panel discussions in which, without the benefit of any research, we offered opinions about the new life of office workers. Eventually the conjecture was supplemented by surveys that, despite revealing how much employees disliked demands for in-office work, did not predict behavior. Some corporate leaders formed opinions about in-person work seemingly based on nothing more than personal experience.
But amid all the guesswork and the theorizing, something interesting happened. The deluge of return-to-office attempts and failures attracted the attention of university professors and behavioral scientists. A steady stream of research has emerged that focuses on how and where we work. Additionally, after nearly five years of published office attendance from various sources, enough longitudinal data exist to draw some compelling insights.
Little of what you are about to read reaches the public discourse. Industry groups, some political leaders, and others who benefit from higher office occupancy have loud voices and many times drown out opposing information. Right now, the most credible research shows that forced office attendance does not increase performance or productivity. It increases attrition, reduces morale, and is often perceived by the market as a distress signal.
Office occupancy rates haven’t improved in the last two years. Two studies with entirely different methodologies point to the same conclusion: Office use has plateaued.
A Suggestion for Corporate Leaders
I have observed that CEOs who enact mandates often don’t make a strong value proposition to their employees. Their reasons can usually be summed up as “We’re better together,” which sounds a lot like “Because I said so.” Those leaders expect their people to automatically believe that in-person work will lead to better outcomes. But what most employees hear is a weak justification for something that adds cost and inconvenience to their lives. They see an attendance requirement as nothing more than a pretext for more control over how they work. And that is precisely why so many of those directives fail.
When CEOs impose return-to-office mandates without a convincing rationale, many workers simply defy them. Some do so overtly with public dissent or outright refusal to comply. Others assert themselves passively with brief office visits and other badge-swipe tricks to meet their attendance requirements. These scenarios create the worst outcomes. The employer doesn’t achieve its desired level of in-person collaboration, and the employees don’t enjoy autonomy over their work lives.
My advice to corporate leadership is this: You are experts at making the business case for your product or service. Now make one to your people for why they need the office. Abandon the use of threats and bribes, and communicate a thoughtful approach. Describe the negative outcomes created by inadequate office attendance, but acknowledge the real-world challenges of in-person work. Detail how your company and employees will benefit by being in the office, and convey what you hope to achieve. Propose a solution, and ask your people to participate. Next, roll out an initiative to redesign and upgrade offices to better support your contemporary workforce. That investment will lift morale and prove your commitment to make office space a business driver. Finally, lead by example. If you comply with your return-to-office program then your people probably will as well.
We are nearly five years into our postpandemic journey. We need to apply what we have learned. If you are a corporate leader and your goal is to restore our lost workplace vitality then you must persuade, not coerce, your people to come back to the office. Never make them feel bullied. Instead, inspire them with your vision of how in-person teamwork will enable them and your company to achieve your shared ambitions.
