RTO creep? Companies kicking return-to-office mandates up a notch

A small but growing list of big-name companies like BlackRock Inc., Walt Disney Co. and Chipotle Mexican Grill Inc. are taking their return-to-office mandates up a notch, calling employees back to their desks four days a week.

It’s a form of RTO creep, as companies test what has emerged as the post-pandemic norm of two to three days in the office and fan the debate over remote work. It’s also a sign of employers gaining more power in the labor market as layoffs mount and a potential recession looms.

As the Great Resignation took hold, quit rates soared and staffing shortages hamstrung businesses, companies were forced to embrace flexibility to keep workers. Now a cooling labor market has emboldened executives determined to get back to a semblance of pre-pandemic normalcy. But these moves could backfire among employees who’ve grown fiercely protective of the work-life balance that remote work affords.

Among the firms instituting more aggressive RTO policies, Chipotle ratcheted up its on-site requirement to four days a week last month from three since March. Disney made its four-day move, up from two or three previously, shortly after the return of Chief Executive Officer Bob Iger. BlackRock has said employees must be in the office four days a week starting in September, following nearly two years mandating three days on-site. Snap Inc. and top law firms like Davis Polk and Skadden also have broken ranks to require four days. JPMorgan Chase & Co., meanwhile, has ordered managing directors back to the office five days a week.

Other companies may be watching to see how these policies play out as they consider their own.

“I wouldn’t be surprised if some organizations take their peers’ lead if they wanted to increase the frequency of on-site work,” said Caitlin Duffy, research director in the human resources practice at consulting firm Gartner Inc. “They may have not wanted to be an outlier.”

At the same time, many workers have made major life changes around their hybrid work policies, rearranging everything from child care to where they live.

“Going back on something that influential to day-to-day life for employees — and not just in work life, but also their life more holistically — this causes so much disruption,” Duffy said.

Related: How are those return to office mandates working out/?

Employees have voiced fierce opposition through public protests at companies like Amazon.com Inc., Starbucks Corp. and Disney. At Disney, over 2,300 employees signed a petition urging reconsideration of the policy, saying the mandate will result in “forced resignations among some of our most hard-to-replace talent and vulnerable communities” while “dramatically reducing productivity, output, and efficiency.”

“We’re always listening and will continue to do so, but we’re happy with how the first month of having more people back in the office has been. There’s more energy, collaboration, and connections happening,” Amazon spokesperson Rob Munoz said in a statement.

A Starbucks spokesperson referred to the company’s January letter from former CEO Howard Schultz announcing the change as a call to action to build its offices into “vibrant hubs of great people doing great work, in person with each other.”

Disney declined to comment.

Two or three days a week is the sweet spot for employee engagement and wellbeing, according to a Gallup survey of over 16,000 full-time US employees conducted last year. Its data also show that remote-capable employees who don’t work in their preferred location are more prone to burnout and a desire to quit.

This emerging norm is also reflected in data from WFH Research, a group of experts from Stanford University, the Massachusetts Institute of Technology, the University of Chicago and other institutions, that show workers’ desire and employers’ plans for the average number of days worked remotely has stabilized at somewhere between two and three days per week.

Though companies who increase their in-office requirements might not see an immediate exodus — switching jobs takes time — it might be the line at which employees start looking, Duffy said. Roughly one in two people who work in finance would change jobs — or already have — if their managers required them to spend more time in the office, according to a Bloomberg Markets Live Pulse survey in early June.​

While four-day-a-week mandates have made headlines and may provide some cover for other companies who want to do the same, they’re still rare, according to Scoop Technologies Inc.’s Flex Index, which tracks the remote work policies of over 4,500 companies. Of hybrid companies that require a minimum number of days in the office, only about 5% mandated four days as of early June, according to Scoop. Two or three days remains the norm, accounting for roughly 90% of hybrid setups.

The call for more in-office time comes as other firms make clear that their existing mandates are compulsory and have started enforcing them — or at least indicating working from home isn’t the best way to get ahead. Google announced last week it will include in-office attendance in performance reviews while International Business Machines Corp.’s Arvind Krishna has said that not showing up will hurt employees’ chances of promotion.

The rationale for returning to in-person work includes what many company leaders see as greater opportunities for learning, career development and mentorship. “The key driver behind our in-office attendance philosophy is a desire to provide all members of our community with best-in-class professional development opportunities,” wrote Davis Polk Managing Partner Neil Barr in an internal email seen by Bloomberg. A similar sentiment was reflected in internal memos at BlackRock and JPMorgan addressing their policy changes. Skadden did not respond to a request for comment.

Recent research from economists at the Federal Reserve Bank of New York, the University of Iowa and Harvard University provides some backing for this view: The paper, titled The Power of Proximity, argues that working in the same building “has an outsized effect on workers’ on-the-job training,” especially for younger workers. Data from WFH Research shows that those in the office spend 25% more time on career-development activities than remote counterparts.

For Disney, face time is seen as necessary for creativity: “In a creative business like ours, nothing can replace the ability to connect, observe, and create with peers that comes from being physically together,” Iger said in an internal memo seen by Bloomberg. Others, like Chipotle, cite ambitious business objectives as a driving factor: The company’s moving to a Monday through Thursday schedule “to preserve our unique, collaborative culture and achieve our aggressive growth plans,” Laurie Schalow, Chipotle’s chief corporate affairs officer, wrote in a statement to Bloomberg.

Likewise, Snap CEO Evan Spiegel wrote in an internal memo seen by Bloomberg that the company’s new “default together” policy will help “accelerate our growth and deliver on our strategic priorities of growing our community.”

For employees who value flexibility and have proven they can get their work done outside the office, the shift to four days can feel like a rollback of autonomy and trust. The policy removes a key element of choice, since most organizations that mandate four days expect attendance Monday through Thursday.

“It’s frustrating for employees because they’ve already been working really hard and performing really well, and so it almost feels like a negative — they’re saying, ‘Well, that’s not good enough,’ or that we don’t trust you to continue in this way,” Gartner’s Duffy said.

Duffy advises executives to carefully consider what they’re trying to achieve with in-office requirements and to be intentional about that, beyond just mandating a set number of days.

“‘What do you really want from your hybrid model?’ is a question I always ask every leader who’s grappling with this kind of decision. What outcomes are you trying to drive?” she said. “If the outcome is just, ‘make your leaders happy because they want employees on-site,’ that might not be necessarily the best rationale.”

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