Return-to-office mandates? Prepare to lose top performers

The research supporting the productivity benefits of working from home is, at best, patchy. However, employers should take employee preferences seriously or risk losing top performers, females, and Millennial employees.

Return-to-office (RTO) mandates are exceedingly unpopular among employees. This much is intuitive, but a study from the University of Pittsburgh added some data to the hunch.

It found that companies that issued RTO mandates in a few years leading up to early 2023 experienced no improvement in financial performance while virtually all (99 per cent) suffered a drop in overall employee job satisfaction.

Author of the study, Professor Mark Ma, explained: “When you force people back to the office, which most people don’t like, they react negatively to this mandate because they know they can do the job [remotely].”

It’s fair to say employees don’t like being forced to return to the office. New research from Gartner found that, for certain employee demographics, the outlook is even bleaker. According to Gartner’s survey of 2,080 knowledge workers, intent to stay at a company suffers when leadership extends RTO mandates.

Flight from the top

On average, employees are 8 per cent less likely to report an intent to stay in their role when their boss issues an RTO mandate. For high-performing employees, however, the costs are even greater as intent to stay decreased by an average of 16 per cent. In other words, the higher performing an employee, the more likely they are to look for the door when ordered to return to the office.

According to Gartner, high-performing employees often interpret RTO mandates as a sign that their organisation does not trust them to manage their approaches to work.

Naturally, losing high-performing employees can be catastrophic for an organisation. Some research suggests that high-performing employees are 400 per cent more productive than the average employees. Research from The Dream Collective found that replacing high-performing talent can cost a business two to three times the outgoing employee’s annual salary.

“Losing even a few of your star workers can have an astronomical impact on your bottom line,” explained Sarah Liu, founder of The Dream Collective.

Employers should seriously consider whether the nature of their work means that getting staff back into the office is worth risking a flight from the top.

Intersecting costs

Similarly, among female employees, intent to stay decreased by 11 per cent on average – 3 percentage points higher than the average employee. This aligns with the growing consensus that women are more likely to take advantage of remote working opportunities than men and are more likely to report a preference for hybrid work.

Preferences for hybrid work among female employees have remained high despite the growing body of research suggesting the low visibility of remote work and attendant caring duties when working from home might be holding women back from career advancement opportunities and even contributing to higher levels of burnout and stress.

This is not to say there are no benefits and, at any rate, female employees clearly want remote working to stay, so managers should think twice about the potential costs of RTO mandates.

“Beyond flexibility, female employees report they prefer remote settings due to fewer encounters with microaggressions and biases, as compared to when working in an office,” explained Gartner.

“When organisations mandate rigid in-office times and days, women disproportionately face greater schedule complications and significant monetary costs related to caregiving responsibilities.”

RTO mandates had an almost identical impact on Millennial employee loyalty, as 10 per cent reported a decreased intent to stay. Millennial employees are the most likely to have caregiving duties and, therefore, stand to gain the most from flexible working arrangements.

Not only did the study find that Millennials were more likely than the average employee to look for the door when their employers flirted with RTO mandates, but they were worse performing when coerced back into the office.

“Though going into the office can be beneficial for Millennials – offering focus time away from potential distractions at home – Gartner data revealed that Millennial employees’ performance was lower at organisations with RTO mandates,” said Gartner.

“With more experience than their Gen Z counterparts, Millennials chafe more at RTO mandates as they have a better understanding of what environment supports their work best, yet are less able to customise their environments when forced to operate within rigid onsite requirements.”

At best, the research supporting the productivity benefits of working from home is conflicting. At worst, it’s entirely unconvincing. That said, employees clearly put stock in flexible work, and this research suggests that employers should take these preferences seriously.

“Often these costs [to employee satisfaction] far outweigh the moderate benefits to employee engagement and effort [implied by traditional working arrangements],” concluded Caitlin Duffy, director of Gartner’s HR practice.