Culture   //   September 15, 2022  ■  4 min read

Why RTO kinks remain vast despite post-Labor Day showdown

For all the talk and expectations around a concrete post-Labor Day return to the office, the reality hasn’t panned out quite so clearly.

In fact, the spectrum of opinion on whether or not to mandate a full return, remains wide. The Wall Street banks have led the charge, demanding employees return more than just a couple of days to the office after Labor Day on Sept 6. But other major firms have taken the exact opposite tack – Amazon’s CEO Jack Dassy told delegates at a Los Angeles conference on Sept. 7. that the company has no intention of calling employees back to the office.

One thing that does seem clear: the return-to-office battleground isn’t likely to be resolved any time soon. Just this week more than 1,300 New York Times staff signed a pledge refusing to abide by leadership’s mandate to return to the office three days a week starting this month.

“This debate about forcing people back into the office is over,” said Steven Hatfield, a principal with Deloitte Consulting and the firm’s global leader for its future of work practice. “The sentiment of the workforce is clear. They want flexibility.”

That’s a message Apple staff made abundantly clear to their leadership, when they dug their heels in over the company’s return mandate. When CEO Tim Cook sent a memo this summer saying employees were expected to return to the office three days a week starting in September, a group banded together and launched a petition demanding more flexibility. Perhaps the most stunning line in the petition referred to many employees being “happier and more productive” when working from home.

And for a long time, that sentiment carried weight. 

Workers have held the upper hand in the employer-employee power dynamic for several years thanks to the tight labor market. But the threat of a recession has some organizations — particularly those directly tied to the market’s ups and downs — instituting hiring freezes and layoffs. Goldman Sachs announced earlier this week that layoffs across the company are coming. And more are anticipated across tech, finance and real estate sectors.

Some employers are trimming fat after hiring sprees and in other cases it’s an opportunity to remove subpar employees hired out of desperation to get a body into the role when talent was scarce.

Either way, it’s impacting return-to-office since many employees no longer feel empowered to make demands. 

“We’re seeing the dynamic shift from employee to employer,” said Julia Lamm, a partner in PwC’s workforce transformation practice. 

Companies that previously gave employees a choice of up to three days to be in-office are now mandating a minimum of three days, she said. All this, despite a record low unemployment rate. 

“I do see companies have different policies and rules especially for technology talent. When companies can't fill their talent pipelines they’re much more willing to be flexible with that type of talent.”
Julia Lamm, a partner in PwC’s workforce transformation practice. 

“There are two jobs out there for every one employee,” Lamm said. “But it’s not like you slot the one employee to one of those two jobs and suddenly the problem is solved. The skills mismatch is so great.” 

Professionals in high demand such as software engineers, data scientists and machine learning experts are in a different reality. Management can insist everyone return to office, but an in-demand software engineer can essentially write their own ticket.

“I do see companies have different policies and rules especially for technology talent,” Lamm said. “When companies can’t fill their talent pipelines they’re much more willing to be flexible with that type of talent.”

While the workforce is still very much in transition, much of the pushback against in-person work is related to the seeming randomness of mandating which days people should be in the office. Many experts agree that employees and teams should dictate when they are in the office and base it on what is happening in their collective workflow. It’s known as ‘flexible hybrid’ versus ‘structured hybrid,’ which dictates the days employees should be in.

“In a flexible hybrid model, the work and the middle managers who organize the work, the team and establish the norms for how we’re going to operate, dictates the nature of when and how people should use the office,” Deloitte’s Hatfield said. 

And then there’s the conundrum of figuring out how to incorporate employees who live outside commuting distance in a return mandate. Many companies did that as a way to find the best talent in an incredibly tight labor market. It’s something Audible is grappling with now. All vaccinated employees are expected to return to in-person work once a week — that day is determined by individual teams — starting in November. 

“We would like all employees, even if they were hired remotely, to come to a hub in some frequency that we’re leaving to the businesses to determine,” said Anne Erni, Audible’s chief people and places officer. “We’re trying to tease that out.”

While leadership tries to suss out that complex question, outside factors may force their hand.

“The question we’re on the precipice of answering is, do people vote with their feet and go elsewhere or does the economy flip and they can’t leave so they begrudgingly come back to the office?,” said PwC’s Lamm.