Return-To-Office Mandates Now Cover Nearly 2 Million Workers. Occupancy Has Barely Budged

2023 is officially the year of the return-to-office mandate, with 2 million workers already under a new in-person work requirement and another 1 million expected to be in the coming months. 

The jury is still out on whether it will also be the year office workers actually return to their desks in force. The mandates that have taken effect so far, including from some of the country's biggest employers, have had minimal effect on actual office usage, tracking data shows.

“There’s still a disconnect with the way that organizations have sentiment towards return to office and what their expectations are versus what employees are really, actually doing,” CBRE Global Head of Occupier Thought Leadership Julie Whelan said in an interview last week.

Since January, 1.7 million employees have been put under new return-to-office requirements, according to public data gathered by JLL. As of this spring, 65% of employers surveyed by CBRE said they have some in-office requirement, while 30% said they were leaving it up to employees. That’s in stark contrast to last year, when 53% left the choice up to employees, CBRE found. 

“This has been a year of marked change in how organizations are thinking about the office,” Whelan said.

But occupancy in the 10 biggest office markets in the country has stagnated throughout the year at around 50% of pre-pandemic levels, according to data from Kastle Systems, which tracks key card swipes at 2,600 buildings.

Placer.ai data, which aggregates foot traffic data from 800 office buildings across the U.S., shows a slight uptick, with foot traffic down 39.7% from 2019 levels in the first half of the year then increasing to 35% below 2019 levels in June.

“For the most part what we saw was like two days a week and now it feels like three days a week in terms of the overall percentage of visits," Placer.ai Senior Vice President of Marketing Ethan Chernofsky said. “And there is this question of will the rise continue, or is this the plateau?” 

The muted results stand in contrast to the changes being rolled out by huge companies. In January, Disney CEO Bob Iger announced hybrid employees would be expected to return to the office four days a week, beginning in March. In April, JPMorgan Chase called managing directors back to the office five days a week. Amazon began requiring employees to come into the office three days a week on May 1.

This month, Zoom released a two-day-per-week mandate for employees within 50 miles of an office. Crucially, the federal government is also pushing more agencies to ensure workers are in more days per week. In a memo sent this month, the Biden administration called for agencies to “aggressively execute” plans to bring employees back to the office more days a week beginning this fall.

“We've seen a significant burst, acceleration in company mandates that have happened here this year,” JLL Agency Leasing President Jeff Eckert said.

As for why the mandates haven't had more of an effect yet, workplace analysts say there are a few key factors in play.

As mandates have rolled out, companies have mostly relied on the honor system. A labor market that has favored employees for the last two years has contributed to employers feeling hesitant to use enforcement mechanisms out of fear of alienating their workforce. 

Of the companies requiring workers to come to the office, 57% are tracking attendance, but only 16% are actually enforcing the policy, according to CBRE. 

“What we have found is that most organizations, although they are requiring through communication a return to office and many are tracking what is happening, there are very few that are creating any kinds of consequences or repercussions for the employee if they don’t follow what has been quote unquote communicated,” Whelan said.

But analysts from CBRE, JLL and Kastle told Bisnow that the tides seem to be turning, as the labor market begins to tilt more toward employer interests and corporate executives put more pressure on workers and managers to show up in person.

“I can feel that in conversations that I'm having with clients, and with our customers about how they're thinking about it, and how they're managing it … they're asking their managers to enforce it more,” Kastle Systems CEO Haniel Lynn told Bisnow.

Last week, Amazon sent an email to some U.S.-based employees, telling them it believed they weren't complying with its three-days-per-week office attendance requirement. 

The email warned that the recipients were not “meeting our expectation of joining your colleagues in the office at least three days a week, even though your assigned building is ready,” the Puget Sound Business Journal reported. The news came a few weeks after the company told employees who work remotely or in smaller offices that they may need to relocate near Amazon’s main hubs. 

“What we’re in a period of in 2023 is organizations finding their voice of saying what the requirement is,” Whelan said.

In addition to increased enforcement, analysts see several other factors at play that will bolster a fall return-to-office uptick.

Remote job postings have slowed. In April, 10.8% of LinkedIn job postings advertised fully remote work, compared to a 20.6% pandemic high in February 2022, JLL data shows.  

“Remote postings are down. Those are down, way down,” Eckert said. “A lot of companies have kind of pulled the ability to work remote off the job description. So that’s another data point that helps this movement of getting people back in."

May was also a major turning point for new in-office guidance — nearly 1 million employees had their companies announce new in-office mandates that month alone, according to JLL. Most of those have yet to take effect.

“It's only been a couple months that they've been active, and we haven't really seen the full impact of that yet,” JLL Research Manager Jacob Rowden said. 

As the summer months usually see muted in-office numbers anyway, analysts say that they expect to see the full effect of mandates come fall. "Wait until Labor Day" is a familiar refrain that has been repeated every year since 2020 when discussing the return to office, but this year, companies' policies are markedly less flexible than they were, and the federal government's new guidelines are seen as more wind in the sails of the RTO movement.

“Office is certainly down, but it’s not out,” Whelan said. “Organizations for the most part are determining that they want to be office cultures, even if that means that people are still going to have a much higher degree of flexibility and autonomy than they did before the pandemic. And now they’re just trying to figure that out: How do we bridge that gap between the office culture that we want to build and the autonomy that employees themselves want to have?”