This Time, Corporate Executives Mean Business On The Return To Office

Leaders at major companies across the U.S. want workers back this week, and they mean it this time.

Labor Day 2022 is the latest, and starkest, line in the sand drawn yet by corporate executives who think their workers should be spending more time in the office. Companies have been trying to lure workers back with incentives like free food and happy hours, but this month, more mandates are coming, The Wall Street Journal reports.

The return to the office has been sluggish in major cities, where the average occupancy has remained below 50% since the start of the pandemic, even as urban apartment rents have soared amid massive demand. Some employers are now telling workers they are no longer able to elect to work remotely on a flexible schedule, marking a tougher stance than has been prevalent in the American workplace in the last few years.

Goldman Sachs is removing its office vaccination requirement, and Ally Financial has told its workers in recent weeks they must come in regularly. Apple, Prudential Financial and BMO Financial Group are all working on wider returns this month at their offices, per the publication. Uber founder Travis Kalanick's Los Angeles-based food tech startup Otter sent a memo to workers requiring them to come into their offices Mondays, Wednesdays and Fridays if their commute is 60 minutes or less starting Sept. 12, Business Insider reports.

“A lot of employers are saying, ‘We’re going to set a line of demarcation,’ this fall," Steve Pemberton, chief human resources officer at the workplace technology company Workhuman told the WSJ.

His firm is mandating workers around Boston come in one day a week starting this month. The company is employing a hybrid schedule and there are some options for employees to stay remote.

As employers harden their workplace demands of workers, there is growing angst among workers about layoffs — many in the real estate industry have predicted that a possible recession would drive workers back in greater numbers. 

The unemployment rate is still low, meaning workers still have an upper hand of sorts — but many major employers have publicly indicated they will reduce their workforce. Last month Meta, which owns Facebook, ​cut 60 contract positions, and it reportedly plans to “transition out” those who underperform. Netflix slashed jobs this year, and Snap plans to reduce its workforce by 20%. Some smaller tech firms have shut down entirely.

Outside technology firms, the return to work has been more robust. Law firms are returning to the office at a rate 12 percentage points higher than the average office tenant, Bisnow reported last month. 

But the jury is still out on how effective mandates will be, with some firms opting to give their employees a choice — and finding it meant more people came back. At Spotify, for example, workers may chose their working arrangement and executives have found employees return in higher numbers than they were expecting. Now, 60% of Spotify employees work from an office most of the time, and just 40% have elected to stay remote, a representative said.

Moody’s Analytics Head of Commercial Real Estate Economics Victor Calanog told Bisnow last month that remote work's impact on career trajectories is the main factor that will indicate how the workplace will look long-term.

“I wonder three, five years from now if it’s going to be an issue, ‘Hey, I chose hybrid, hey I chose to work three or five days a week,’” he said on the Bisnow Reports podcast. “Let’s take a look at where the careers are, and if there will be a centrifugal force pulling people back to the office.”