CEOs say return to office is not a top priority in 2024. Here's why.
Recruiting and retaining talent are higher on the list for many employers.
With labor shortages subsiding but still concerning, just 4% of CEOs are making return to office a top priority in 2024, according to a recent survey by The Conference Board.
"CEOs are throwing their hands up when it comes to getting workers back into the office full time," Diana Scott, human capital center leader at The Conference Board, told Yahoo Finance. "Hybrid work is getting the job done, and they have bigger things to worry about. Attracting and retaining talent is their No. 1 priority for 2024."
The Conference Board surveyed more than 1,200 executives, including 630 CEOs, across the United States, Latin America, Japan, and Europe.
Executives are increasingly resigned to a scenario where employees don't clock into the physical office every day, as hybrid work arrangements — mingling work-from-home and in-office time — have become the normal routine for many white-collar workers.
Remote work persists
After full-time remote work peaked at around 60% during the pandemic, hybrid work has settled in, with about 30% of paid workdays being done remotely.
"Over the past six months, we’ve been seeing the fallout of rigid return-to-office policies on both sides of our business," Gwenn Rosener, co-founder of recruiting and staffing firm FlexProfessionals, told Yahoo Finance.
The firm has seen an uptick of job seekers fleeing return-to-office mandates in search of flexible work options, as well as corporate clients digging in their heels while they search for months to land workers willing to work in the office full-time.
"Both sides of the tug of war do seem to be compromising more, especially on the business side when rigid in-office policies are killing their ability to retain and attract the employees they need to drive growth," she said.
Persistent talent shortages continue to stymy hiring efforts, according to the latest ManpowerGroup Employment Outlook Survey. A hefty 7 in 10 employers say they are struggling to find talent with the skills they need, according to the report.
'Little evidence' that remote work hurts productivity
The shift to remote and hybrid work has reshaped society in important ways, and these effects will likely continue to evolve.
For example, with less time spent commuting, some people have moved out of cities, and the lines between work and home life have blurred.
However, lack of performance and productivity are not what has been dinged, according to a recent survey by the Federal Reserve Bank of San Francisco. The study found little evidence that the shift to remote and hybrid work has affected productivity — neither harming nor helping it.
And consider this: While some executives insist employees are unproductive and ineffective at home, a University of Pittsburgh study found that office mandates don't improve employees' or companies’ financial performances, but they can make workers less satisfied with their jobs and work-life balance.
An analysis of S&P 500 firms that implemented in-office attendance requirements found that the mandates did not boost financial performance or value, which remained on par with that of companies allowing virtual work.
However, researchers did observe "significant declines in employees’ job satisfaction" — perhaps explaining why 80% of employers who forced a return to offices later expressed regret over the decision.
These mandates may have less to do with productivity or profits and more to do with "managers using return-to-work mandates to reassert control over employees and blame employees as a scapegoat for bad firm performance," Mark Ma, the author of the report and a University of Pittsburgh business professor, told Yahoo Finance.
"Clearly, managers should stop viewing remote work as a threat," Ma said. "Instead of blaming remote employees as not being productive or loyal to their employers, managers should embrace remote work as an opportunity to develop a long-term, flexible workplace strategy that could both encourage high employee performance and foster employee loyalty."
Catering to every preference
Vivian Reilly, 47, is an accountant in Manchester, N.H., who joined her firm Lekas, Edgar & Co. in August. She has chosen to spend her first year going into the office even though she is only required to come in three days a week.
"I would rather go in to learn from my coworkers in person," Reilly told Yahoo Finance. "I think it definitely helps me with my performance. I am new to the field, and I have too much to learn."
In fact, recent surveys show that a large proportion of young and new employees like Reilly want to work in the office.
"If this is the case, firms can decide the availability of remote work opportunities for different employees," Ma said. "For example, for employees who just join a company, the firm may require a high percentage of these young workers to work in the office and get trained."
For Steve Gold, 46, a lawyer with Hurwit & Associates in Newton, Mass., the opportunity to work from home is "a gift," he told Yahoo Finance. "The office is available whenever I'd like to go, but there is no requirement to go in."
As a father of two kids — one in middle school and another in elementary school — having the flexibility not just to attend the occasional school concert, but to spend time with them after school is something Gold "would be willing to trade a lot to have," he said. But with this position, he doesn’t have to.
"Companies today are realizing that hybrid is the best option as it caters to both types of employees — ones that want to go in the office, and ones that want to work from home," AJ Eckstein, a Gen Z career expert and founder of The Final Round career platform, told Yahoo Finance.
Pay and promotions take a hit
Still unanswered: Will those workers opting to log in from home ultimately feel the brunt of the slew of layoffs announced since the beginning of the year?
Workers who worked remotely five days a week were 35% more likely to be laid off in 2023 than their peers who put in office time, according to employment data provider Live Data Technologies. The analysis showed 10% of fully remote workers were laid off last year, compared with 7% of those working in an office full time or on a hybrid basis.
Why? Perhaps because when a hiring manager gets news they have to cut staff, it’s easier to lop off someone they don’t have a close face-to-face relationship with.
Another shocker finding: Remote workers are 31% less likely to get promoted than in-person counterparts, The Wall Street Journal reported from an analysis of 2 million workers also conducted by Live Data Technologies.
The hybrid model takes hold
While the return-to-office movement is percolating, many big companies seem to have compromised on three days a week for now. IBM just announced that it's requiring executives and people managers in the United States to be in the office at least three days per week, a company spokesperson told Yahoo Finance.
She also confirmed that those who don't take this mandate seriously risk losing their job.
"IBM is focused on providing a work environment that balances flexibility with the face-to-face interactions that make us more productive, innovative and better able to serve our clients," she added.
Last summer, Google began putting some muscle in its policy by tracking office visits by badge swipes and indicating that in-office attendance would be part of performance reviews, which, in turn, impacts promotions and pay increases.
Remote jobs are also becoming less attractive pay-wise, another nudge from employers to more in-person time.
Payscale’s 2023 Compensation Best Practices Report found that about a quarter of employers surveyed pay employees who don’t come into an office less than those who do for the same position.
That’s not the case at Reilly’s workplace.
"We do feel in-office provides a lot of learning opportunities among staff and mentoring of the newer staff but understand flexibility is also important," Kerry Lekas, managing partner of Lekas, Edgar & Co., told Yahoo Finance.
"Winter in New England, doctors’ appointments, service work being done at home, kids, pets — all of these things are part of life and can create chaos in a schedule," she said. "We find that giving staff the flexibility to deal with and handle these things and work at home creates a positive atmosphere when we are at the office."
Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a workplace futurist, a career and retirement strategist, and the author of 14 books, including "In Control at 50+: How to Succeed in The New World of Work" and "Never Too Old To Get Rich." Follow her on X @kerryhannon.
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