The State of RTO: Why we’re still talking about the future of in-person work
As I interviewed senior leaders over the past three months about their return to office (RTO) strategies, I noticed an interesting pattern. Almost no one wanted to be on the record talking about their company’s RTO policies or their own personal beliefs about in-person work. The issue was too unsettled and emotionally charged.
In reading most headlines today, it’s no surprise business leaders are so quiet on the topic. Every few weeks, there is a new article about a Fortune 500 company being criticized for the design and rollout of its updated return to the office policy. We aren’t done with RTO by any means, and the emotional weight of the topic is no lighter today than it was in 2020 and 2021.
When you talk to leaders about their RTO experiences, you realize how messy the return to office process has been: unannounced top-down mandates, bungled communications, increasingly punitive measures for non-compliance and declining budgets dedicated to the in-office experience. We have not done a great job solving for the new normal of in-person work to date, and the most critical stakeholders (decision makers in C-suites and employees) have drastically different points of view on what “great” looks like for RTO.
So, what’s underlying this challenge? Why can’t we get this right? In my qualitative research, I discovered that there is a lack of alignment between the limited existing research on in-person work and the beliefs of senior leaders responsible for the implementation of RTO.
Academics and business thought leaders have not yet identified data-driven best practices or “proof” that in-person work is superior to remote work. Current analysis doesn’t show a clear winner. There are cost and productivity savings when employees work remote, but Microsoft conducted a study showing that social networks are weaker for remote employees. A recent study by the Federal Reserve Bank showed that young engineers working in-person were more likely to receive feedback on their work and 5 times less likely to quit their jobs, demonstrating the potential that the benefits of in-person work could be much greater for younger employees.
There are multiple studies showing that in-person collaboration is more effective, but that research is focused on specific populations of workers (in call centers) and types of collaboration (patent and research generation). A 2024 study on Fortune 500 RTO mandates showed that returning to office decreased employee morale, but did not improve financial results.
Leaders also have their own heuristics and personal beliefs, largely driving them to promote more in-person RTO strategies. I talked to 10 C-Suite executives (including 3 CEOs) serving more than 35,000 employees, including 2 publicly funded companies with 10,000+ employees. This group held a consistent conviction: employees collaborate better in-person and create better solutions to critical problems. 6 executives in interviews said the exact words, “we collaborate better together in-person”. Their own experience apprenticing as young consultants, analysts, and front-line employees included vivid memories of casual encounters with senior leaders in hallways, moments of brainstorming and learning in a supervisor’s office, and many hours of relationship building over lunches and happy hours. Largely, C-suite executives deeply believe, based on personal experience, that being in-person 3+ days a week is an essential ingredient to the long-term success of their employees.
While conducting research over the past three months, I distilled the perspectives of academics and business leaders to answer the question: what could success look like in the future of designing RTO policies? At a 50,000 foot level, here’s what I learned:
1. Data and company-specific context are critical when developing and communicating an RTO policy context matter. Policies based on a “gut feel” are often generic and uninspiring. Companies rarely leverage company-specific context, like employee surveys or business results, to justify their RTO policy. Tying RTO to something quantifiable makes it easier for employees to justify the policy to themselves (e.g., declining profits, low employee NPS scores, concern about future career opportunities). One company in my research tied their RTO policy to an equity principle — since front line workers were required to return, corporate employees were as well.
2. Most companies miss badly on the messaging. Almost every leader used the phrase “we collaborate better together in-person” as a reason for returning to office. Additional statements are often also generic — “it’s important for your career development”, “we need to do what’s best for the business”. I encourage leaders to design messages that include a “why” that is compelling to employees, not juts senior leaders. Consider your employees’ context in crafting messages — what do you need to address to alleviate your employees’ specific concerns? What are your employees’ core motivators and how are they misaligned to your leadership team’s perspectives?
A media company focused their RTO messaging on the existential threat present to the business — our clients are returning to the office, and they have asked us to do the same. We exist to serve of our clients — they are the lifeblood of our business. There is no option to remain remote.
3. Sponsorship can be a game changer. Top-down policies that are not executed with the support of a sponsorship spine gain less buy-in than those that have inputs from cross-functional, cross-level RTO committees. Two executives I spoke to citied their RTO taskforce as a critical ingredient in the ultimate success of their policy rollout. These companies built cross-functional teams that gathered inputs for RTO decision makers and provided recommendations compromise between various stakeholders wants and needs.
4. Implementation is more than 80% of the battle. A good RTO policy that is not well communicated (in many forums, across a long period of time), practiced by senior leaders, and coordinated across teams and functions, will likely fail. RTO committees need to think through potential blind spots and obstacles that may occur 3, 6, or even 12 months down the road. In particular, leaders should define exceptions and team or role-specific RTO rules upfront, create strategies to retain high priority talent that may be affected by new RTO guidelines, and create a change management roadmap to promote adoption of the RTO policy (e.g., events, office updates, messaging campaigns, etc.). One pharmaceutical company hosted company-wide collaboration weeks once a month with a pre-planned agenda of events to maximize their in-person time together.
Ultimately, my research (linked here) gave me hope. Companies left a lot of opportunity on the table in their rollout of RTO policies, particularly in how they justify, communicate, and execute their RTO policy. Leaders are often not aware of the existing academic research that they can leverage in making decisions about their ideal RTO policy. Employee inputs, missing from many current or former iterations of RTO plans, might result in the design of a more resilient and enthusiastically supported strategy.
These opportunities will require bold and contrarian senior leaders to take a risk in challenging their company’s status quo (and senior leaders’ beliefs). Whatever the “right” policy is, we will benefit from a “reset” towards decision making processes that are more data-driven, inclusive, and forward thinking.
You can reach Peter, 2Y ’24, on his LinkedIn.
