Companies’ hard-line stance on returning to the office is backfiring

Companies’ hard-line stance on returning to the office is backfiring·Washington Post

Thousands of employees at Europe’s largest software company, SAP, have signed a letter saying they feel “betrayed” by the firm’s “radical change in direction” on its back-to-office directive, with many threatening to leave rather than return to offices or work on-site with customers at least three days a week starting in April.

It’s a stark shift from the company’s pre-pandemic approach, which allowed about half of SAP’s workforce to be remote. As recently as 2021, SAP’s CEO, Christian Klein, described SAP as a “100 percent flexible and trust-based workplace.” But like many executives, Klein’s view has changed as labor market dynamics have tilted toward employers having the upper hand. After the company reported strong earnings last month, Klein expressed frustration with remote work’s effects on SAP’s culture.

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“I’m not a big believer that on a video conference platform you can understand our culture, you can get educated, and you can get enabled to do your job best,” Klein said, according to reporting from Bloomberg News.

The German software giant is one of several large companies - joining Google, AT&T, Goldman Sachs and Bank of America - that have swung from flexible to firm stances on in-person attendance, signaling that the days of ubiquitous remote work are over. Companies have abandoned efforts to entice workers back with free lunches, charitable donations and concerts. Employers are now taking more punitive approaches, and some workers would rather quit than comply.

Within two weeks of SAP’s announcement on office attendance, which was first reported by Bloomberg, a letter opposing it had amassed more than 5,000 employee signatures. The labor group representing SAP employees in Europe has deemed the policy “unreasonable” given prior assurances employees were given about remote work.

Joellen Perry, an SAP spokeswoman, said the company looks forward to discussing the approach to hybrid work with employees in the “transition period” between now and April.

“Striking the right balance between remote and onsite work helps drive productivity, innovation and employee well-being,” Perry said in a statement emailed to The Washington Post. “We’re evolving our flexible work policy to align with best practices in the market and our own experience as a frontrunner in hybrid work.”

More than three years in, the battle over offices is as bitter and entrenched as ever. Last month, Bank of America sent “letters of education” to workers who haven’t been meeting the company’s attendance expectations, threatening them with disciplinary action if they didn’t step it up within two weeks. In 2023, remote workers were 35 percent more likely to be laid off than their peers who worked in person or hybrid schedules, according to data from Live Data Technologies, first reported by the Wall Street Journal.

Some companies that had flexible policies during the pandemic, have tried tethering office attendance to performance reviews, while others have threatened to fire those who don’t come in often enough. Over the summer, Google cracked down on enforcement of its return-to-office mandate. Employees who don’t comply could see it reflected in their performance reviews, which could limit their ability to get promoted or receive raises. Similarly, Goldman Sachs in August reminded workers who weren’t in compliance about the company’s five-day in-office mandate. Employees there can also see noncompliance reflected in their reviews.

But some workers say their office mandates are unreasonable and that employers are using them as a way to shed employees.

“There are CEOs that are seeing a two birds, one stone situation with RTO,” said Andy Challenger, senior vice president at Challenger, Gray & Christmas. He noted that companies digging their heels in on office attendance should be prepared for a battle. “By now, we’ve seen a lot of revolts.”

At AT&T, for example, more than 60,000 managers were mandated to return to the office on a hybrid basis starting in July. But the company reduced the number of offices for managers, making it harder if not impossible for some to commute, employees said. Workers said the mandate also applied to employees who had remote allowances even before the pandemic and those who were hired permanently remote during the pandemic. They said the majority of workers weren’t offered any relocation assistance as part of the mandate, a detail that Chief Technology Officer Jeremy Legg confirmed during a recent town hall.

“It doesn’t surprise me that there are people that are upset,” Legg said.

As a result, several workers are waiting to be laid off or are looking for new opportunities, employees said.

Workers at dating app Grindr were put in a similar predicament after their office mandate came down last year. Employees were required to work from assigned offices despite where they live. For some workers, that meant they’d have to move across the country rather than work from the office in their city. It similarly asked workers who had assumed they were permanently remote to comply. As a result, about 45 percent of Grindr’s 178 employees quit, workers said.

The pandemic demonstrated that workers could effectively work from home, using technology like Zoom, Microsoft Teams and Slack to collaborate with their teammates in different locations. Several companies lauded their employees’ ability to remain productive while working remotely before changing course as the pandemic subsided.

Even pandemic darling Zoom, which enabled millions of people to work remotely during shutdowns across the globe, called people back to the office. Last August, it asked workers within a 50-mile radius of an office to go in two days a week, suggesting that they needed to experience hybrid work to build better products for it.

For many workers, the mandates just don’t make sense, and some research supports their views. A recent study showed that mandates don’t help companies make more money, for example.

“We’re not seeing significant losses in performance or engagement [with remote work] so a required on-site presence signals distrust and discounts what employees have been doing for the last few years,” said Annika Jessen, director of research in Gartner’s human resources practice. “It’s not shocking that workers feel betrayed.”

Office occupancy across the country’s biggest business centers has hovered around 50 percent of pre-pandemic levels for the past year, despite a host of mandates from employers to spend more time in person. But early signs in 2024 suggest that mandates might be having some effect: The national average office occupancy rate hit a post-pandemic high of 51.8 percent last week, according to data from Kastle Systems.

The downsides of remote work have been more acute for younger workers, many of whom have struggled to build networks and mentor relationships in the Zoom era. In 2023, Pew Research Center data found that younger workers are facing higher levels of burnout and disengagement. Many bosses have said their younger workers are the most eager to comply with return-to-office mandates.

Kayla Flick, 25, an engineer for General Mills in Murfreesboro, Tenn., expected working life to be predictable. Instead, she’s been surprised by the churn she’s seen as colleagues and mentors come and go through the manufacturing plant. Many of her co-workers have left for more flexible jobs, Flick says, but she can’t personally imagine not working in person.

After the isolation and disruption of the pandemic during college, she’s savored the chance to bond with co-workers in person, especially others just starting their careers. She used to commute 40 minutes from Nashville, but she recently moved to Murfreesboro to be closer to the plant and her friends. She loves meeting up with colleagues for happy hours, volleyball games and picnics.

“We’re pretty good at saying, ‘If everyone can get out early today meet at the park,’ and someone brings a cooler with beer,’” Flick said. “That kind of stuff is what I really enjoy.”

Gartner’s Jessen said companies that aren’t thoughtful about strict mandates should be prepared to lose top talent, millennial and female workers. Instead, employers should do a cost-benefit analysis from employees’ perspective, she said, adding that employees want to feel capable, autonomous and connected.

“Get feedback from employees on what is or isn’t working, and be willing to adapt and adjust the policies,” Jessen said. “It’s not all or nothing.”

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