CEOs are Quietly Backtracking on Remote Work — and More Companies Could Follow

Apr 3, 2023

More companies are backtracking on earlier pledges to let employees work from home on a full or part-time basis.

Across industries, major corporations including Disney, Twitter and Starbucks are requiring employees to spend more time at the office.

While half of employers say flexible work arrangements have worked well for their companies, 33% who planned to adopt a permanent virtual or hybrid model have changed their minds from a year ago, according to a January 2023 report from Monster.

Marc Benioff, CEO of Salesforce, is the latest leader to appear to reverse course after embracing remote work and criticizing return-to-office mandates.

Salesforce was among the first tech companies to tell employees they didn’t have to come back to the office, declaring that “the 9-to-5 workday is dead” when it announced a permanent flexible working model in 2021.

Earlier this month, however, Benioff said that he “knows empirically” that new hires perform better “if they’re in the office, meeting people, being onboarded, being trained” on the “On With Kara Swisher” podcast. 

Benioff’s comments come amid new reports that Salesforce will require employees to up their in-office time.

“Our hybrid approach empowers leaders to make decisions for their teams about how and where they work,” a Salesforce spokesperson said in a statement.

As recession fears loom and layoffs mount, the power pendulum is swinging back towards bosses — and more companies could seize on the moment to get their employees back to the office.

‘The bosses are back in charge’

Anxious about high inflation and mass job cuts, workers’ confidence is wavering — even though the labor market remains incredibly tight, with almost 1.9 unfilled positions for every jobseeker.

Meanwhile, managers who felt they had less leverage during the prolonged hiring shortage now feel they have more power in negotiations with employees, especially when it comes to office attendance, says Kathy Kacher, president of Career/Life Alliance Services. Kacher has been advising companies on their return-to-office plans.

“When executives were scrambling to retain workers, they were afraid to ask workers to come back to the office and lose even more talent, because many workers have made their distaste for the office very clear,” she explains.

Kacher continues: “Now, faced with this shaky economy, I think organizations are going, ‘Okay, good. The bosses are back in charge. Now we can say what we really want.'”

For some companies, remote work accommodations offered at the start of the Covid-19 pandemic were emergency measures that executives don’t believe are sustainable for the long term, says Susan Vroman, a lecturer in management at Bentley University.

Now that the pandemic is entering its endemic phase, more managers are comfortable asking people to resume their pre-pandemic commutes.

“If executives like having people in the office, it feels like the safest time in three years to communicate that,” Vroman adds. “And if leaders at big companies are adjusting their return to office policies, others will see that and think, ‘I can do the same.'”

Workers could quit over RTO requirements

More RTO requirements could trigger another wave of the “great resignation.”

Employees who don’t believe their company is being transparent about remote working policies are 2.3x more likely to look for a new job than those who are satisfied with their company’s messaging, according to a recent Future Forum report, which surveyed over 10,000 workers between November and December 2022.

Overall, 59% of employees are open to looking for a new job soon — but among those who are dissatisfied with their level of flexibility, 75% say they are planning to find a new job within the next year.

Whether or not we’ll see another “big quit” depends on what choices jobseekers will have in the coming months, says Dan Kaplan, a senior client partner at Korn Ferry.

Remote job opportunities are dwindling: In December 2022, remote jobs made up less than 14% of postings advertised on LinkedIn, down from 20.6% in March 2022, according to the Wall Street Journal.

Despite a drop in remote listings, the number of people working remotely has seen a slight increase in recent months, according to LinkedIn’s latest Workforce Confidence Index, which surveyed 5,860 U.S. professionals from Jan. 14 through Jan. 27. As of January, 28% of workers said they were working primarily remote, up from 25% in November 2022.

It’s too soon to tell if this increase will continue, though.

“If five major tech companies tell employees they have to be in five days per week, and three other competitors say they’ll let you work from anywhere, people are going to flock to the companies offering flexibility,” Kaplan says. “But if everyone says, ‘time to come to the office five days a week,’ then workers will lose that freedom of choice.”

Companies, though, could also stand to benefit from employees quitting over RTO requirements. Kacher says she’s seeing more executives use stricter office mandates as sneaky way to reduce their headcount, so they are not liable for conducting mass layoffs and paying employees severance.

“It’s a good deal for companies who don’t want to deal with the backlash and consequences that come with layoffs but need to cut costs somewhere,” she explains.

To avoid retention issues and maintain employees’ trust, transparency is paramount, says Vroman. “There’s nothing wrong with admitting you committed to an RTO strategy in haste, and need to re-adjust how some of it works, as long as you’re being upfront and honest about it,” she says.

Kaplan agrees, adding that companies should attempt to meet workers in the middle and offer a more flexible work schedule, or allow employees to work from home certain days throughout the week or month.

“Ultimately, return to office is a negotiation between managers and employees… neither group is going to get everything they want,” he adds. “If we can’t reach a consensus, it’s only going to create bigger problems.”

By Morgan Smith