The Great Compromise: Return-to-Office Policies Are Evolving

Many employees, on the other hand, don’t share executives’ enthusiasm for in-person work, research shows. They counter that working remotely allows them to achieve better work/life balance as they manage child care and elder care issues; saves money not spent on commuting and office attire; helps offset what some perceive as lower pay or a lack of career advancement; and allows them to get more tasks accomplished each day. A recent Microsoft survey shows that 52 percent of employees want to work hybrid or remotely for the rest of their careers.

Welcome to ‘the Great Compromise’

With unemployment at historic lows and talent shortages widespread, many employers have been accommodating employees’ desire for remote and hybrid work. It costs about one-third of an employee’s salary to replace them, according to industry norms, and that’s only if HR can find a qualified candidate who is willing to accept the position.

Nearly 30 percent of companies that require employees to be onsite say they are having problems hiring, according to research by Unispace, a design and construction firm. Of course, that may change if the economy softens. The overall share of job postings that advertise remote/hybrid work options has fallen over the past year, from a peak of 10.3 percent in February 2022 to 8.4 percent as of May 2023, according to the Hiring Lab, the economic research arm of Indeed.

The good news for companies implementing return-to-office policies is that while employees may say they don’t want to go back, most report that the return has been a positive experience. Seventy-one percent of workers who came back to the office say they are more satisfied with their jobs, according to SHRM research in June, and about three-quarters say they are more effective and productive.

Still, there has been significant pushback. Office employees staged a walkout at Amazon when told they had to return three days a week, while workers at Apple and The Walt Disney Co. signed petitions to protest policies that would force them back onsite, according to published reports.

Farmers Insurance Group’s June reversal from the work-from-anywhere policy it instituted last year to a hybrid schedule that would require in-person work three days a week ignited an uproar, with some employees threatening to quit or unionize—especially those who had moved far away from the company’s Woodland Hills, Calif., headquarters when told the company would allow fully remote work as a permanent benefit.

And recent research from Clarify Capital, a financial consultancy in New York City, found that nearly 7 in 10 employees (68 percent) said they would rather look for a new job than return to the office. That number is even higher among Generation Z workers, 79 percent of whom said they would look for a new job rather than return to the office.

A Matter of Trust?

Leaders’ communication styles can be a cause of friction, says Flo Falayi, a partner at Korn Ferry in Atlanta who holds a doctorate in organizational leadership. Falayi says that when employers sent workers home during the pandemic, executives talked about wanting to keep them safe and offered flexibility so they could tend to their family needs during a time of epic upheaval.

“There was this sense around ‘let’s do what’s right for each other.’ Everybody was on the same page,” Falayi says. But CEOs demonstrated humanity and empathy during the pandemic that many aren’t currently displaying now, he says. “Things are lost in translation today. Leaders are not perhaps communicating to the level that the employee is accepting the message.”

One theory is that company leaders don’t want to disclose their true motivation, since 85 percent of them say that hybrid work has made it difficult to have confidence that their workers are productive, according to another Microsoft survey conducted last year. In that same survey, 87 percent of workers say they are productive.

Meanwhile, a PwC study conducted last year found that nearly 40 percent of CEOs say their organizations won’t be economically viable if they continue on their current path. Some businesses are already struggling. Worker productivity in the U.S. has fallen for each of the last five quarters, according to the U.S. Bureau of Labor Statistics.

“I think that the heart of this issue [about returning to the office] is about trust,” says Julia Lamm, PwC’s Workforce Strategy lead. “I think that’s adding anxiety as some leaders worry about business performance.”

Lamm agrees that business leaders could better explain why they want employees back in the office, and advises against threatening to lower bonuses or withhold promotions to employees who balk at in-person attendance, as some organizations have done. Such approaches can lead employees to become disengaged.

“Leaders have to frame the narrative in a way that takes into consideration the issues at the top of people’s hearts,” Lamm says. 

Job Requirements

To be sure, many employees have returned to the office without any fuss or compromise. The city of Farmington, N.M., has about 1,000 employees who worked remotely during the pandemic, and they have all been back in the office for two years, according to Jamie Wagoner, deputy HR director for the city. She says they were all told during the crisis that they would eventually have to return, and only one person balked and eventually left.

“Citizens expect us to be in the office,” Wagoner says. She adds that the bulk of the city’s employees could never work remotely, so it’s not fair that certain workers have the option. “We wanted to show solidarity,” she says.

Many government agencies and big-city employers are attempting to bring workers back to offices to bolster suffering downtowns. New York City’s mayor, Eric Adams, said that he wanted all municipal employees back onsite. However, amid labor shortages this summer, Adams reached a deal that will let some city employees work from home two days a week, according to published reports.

Employers are creating special return-to-office terms for certain jobs. For example, software engineers at the travel agency Vegas.com protested and threatened to quit 18 months ago when they were told they would need to return to the office three days a week. Managers explained that the organization was trying to preserve its culture and create bonds. A compromise was reached, and the 25 engineers now work in the office one day a week. While some nonengineering employees initially resented their colleagues’ preferential treatment, the arrangement is working well, says Renata Kilibarda, SHRM-CP, HR manager with Vegas.com.

“We just don’t have a lot of that type of talent here,” says Kilibarda, who adds that replacing those software engineers with others in the Las Vegas area who would be willing to work onsite would be very difficult.

Bumps in the Road

Not every compromise has been seamless, however. “We’re winding up with more dysfunctional teams,” says Matt Rees, the HR director at JETSEAL Inc. in Spokane, Wash. Rees says most of the company’s 150 employees worked onsite during the pandemic, and last fall, management asked all of the administrative staff to return at least part time. Some still haven’t returned, and they haven’t been forced to, or fired, because of the labor shortage. He says productivity has suffered and team bonds have eroded.

“There’s a lot more bickering,” Rees says. “People make bad assumptions when you don’t return their calls.”

At some point, the company will need to decide whether it’s better to have a low-functioning employee or no employee at all, Rees says. “It’s a terrible place to be.”

He’s not alone. About 10 employees at EMI Industries in Tampa, Fla., haven’t returned to their respective offices, despite being given ample time to address whatever personal issues they needed to resolve in order to come back, says Carol Brnich, HR director at the company, which makes fixtures, displays and equipment for retailers and restaurants. Customers have complained. One employee says he can’t return because he’s taking care of his mother. However, when colleagues call him, they can hear casino sounds in the background.

“It’s been frustrating for the other employees,” Brnich says, adding that in the next several weeks the company will have conversations with those employees about ending the extended flexibility.

The Human Element

While many businesses have been willing to compromise on office attendance since the beginning of the pandemic, others have started more recently. The 6,000 employees at Jacksonville, Fla.-based Carlisle Interconnect Technologies worked onsite throughout the pandemic, in part because the company’s leadership didn't think the crisis would last so long and believes that employees work better when they’re together.

Working onsite, “there’s camaraderie, relationship-building and less stress on the leadership team for figuring out how to manage people remotely,” says Jamie Lomason, CHRO of the company, which manufactures, tests and certifies products such as wires and cables for high-tech industries. “There are opportunities to engage and collaborate and to keep the business from being siloed.”

However, after the pandemic abated and employees realized the benefits of remote work, some started leaving the company. Turnover in the accounting and HR departments was 35 percent and 50 percent, respectively. Now the company allows hybrid and remote work for some positions, and decisions are left up to individual managers.

Establishing Guidelines

The difficulty in managing remote teams is often cited by proponents of full-time, in-office work as a reason to have everyone onsite. However, companies that have successfully created hybrid and remote workforces insist that organizations must actively and deliberately plan for flexibility.

Surprisingly, many employers that were forced to quickly send workers home without any preparation when the pandemic hit still haven’t created specific blueprints for remote and hybrid work.

Nearly half (48 percent) of the 749 companies in a Mercer survey only have informal and ambiguous guidelines to manage flexible work, while 17 percent have no rules. Just over a third (34 percent) have formal policies.

Creating guidelines for employees in this newer way of working is crucial, says Kayla Velnoskey, a senior principal in Gartner’s HR consulting practice. Only 41 percent of remote-capable employees surveyed by Gartner are performing optimally. Busywork and exhaustion are two reasons, according to Velnoskey. But she adds that companies have given employees flexibility without guidance on how to make good choices for themselves and the company.

“Employees are motivated to make the best decision for their career and the company, but sometimes they don’t have all the information or support they need to do it,” Velnoskey says.

[SHRM members-only toolkit: Managing Flexible Work Arrangements]

It’s more challenging for leaders to manage remote teams, says Kerry Norman, executive vice president of operations for CHG Healthcare, a Midvale, Utah-based physician staffing company with 4,000 employees. Norman says the company’s division managers decide hybrid schedules but that the firm is continually providing training, tools and employee surveys to help them develop best practices.

One policy she recommends—and adheres to—is having team members come in on the same days, so they can work on projects that benefit from them being together, as well as just spend time with one another.

“Nothing feels worse than going to the office and you’re the only one there,” Norman says.

Theresa Agovino is the workplace editor for SHRM.