REPORT: More Than 8 in 10 CEOs Think Hybrid Work Will Be Dead Within 3 Years
Office usage across the 10 largest metro areas is still at roughly 60.5% of prepandemic levels, according to Kastle Systems’ keycard swipe data. But most CEOs think the era of remote work is coming to an end.
In a survey of 1,300 global CEOs conducted by KPMG, 83% said they expect their companies will shift back to requiring five days of office attendance sometime in the next three years. It’s a steep jump from the 64% of CEOs who predicted the near-term end of remote work in 2023.
“This year’s findings highlight a widening gap between the expectations of CEOs and their employees,” Nhlamu Dlomu, the global head of people at KPMG International, wrote in the report. “The world is changing at pace and the employee-value-proposition is changing with it.”
Older CEOs are much more likely to predict a return to prepandemic work models, with 87% of those aged 60 to 69 saying hybrid work would end in the next three years, compared to 75% of CEOs aged 40 to 49.
Calls from executive suites to bring workers back to the office have been growing louder, most recently with Amazon CEO Andy Jassy telling employees last week in a memo that the company’s leaders had “decided that we’re going to return to being in the office the way we were before the onset on COVID.”
Amazon’s corporate workers will be expected to turn up in the office every workday starting Jan. 2 next year except for extenuating circumstances.
The e-commerce giant is joining other leading firms in turning back the clocks on work habits. Financial firms have led the way, with Goldman Sachs, Citigroup, HSBC, Barclays and JPMorgan Chase all calling employees back to the office full-time.
Despite the push, office occupancy around the country continues to lag prepandemic levels, and many executives have, at least for now, accepted that a hybrid work model is their best path forward in a tight labor market where talent is scarce.
CBRE found in its annual office sentiment survey released in August that 64% of occupiers said their office usage levels had stabilized, up from 43% of respondents in 2022.
Brokers, analysts and economists argue about how to measure office usage, but regardless of how the numbers are sliced, occupancy is behind pandemic levels. Avison Young’s Office Busyness Index for August aligned with Kastle’s September data, finding that U.S. offices were 60.4% as busy as they were during the same month in 2019.
The difference between current office usage and the expectations for the next three years could signal that more leading firms — KPMG’s survey collected responses from CEOs at firms with at least $500M in revenue — will begin shifting policies against hybrid work.
CEOs remain relatively pessimistic about the global economy, with just 72% of executives in the KPMG survey saying they had confidence in it, roughly in line with the past level over the last two years after it bottomed out at 60% in 2021.
Still, 92% of executives expect to grow their company’s headcount in the next three years. As pandemic impacts wane, it’s increasingly likely that those new hires will be expected to report to offices every weekday.
