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Business Insider
21-07-2025
- Business
- Business Insider
Small companies' pitch to workers: No RTO required
If David were taking on Goliath today, he might do it from home. Startups and smaller companies offering flexible work arrangements could better challenge larger rivals less willing to let employees log on from home, and many may already be doing so, workplace researchers told Business Insider. "It's a great way for small companies to compete with big companies for talent," said Nicole Kyle, who studies the future of work, about giving workers greater autonomy. Nick Bloom, an economics professor at Stanford University who studies remote work, told BI that his research shows that in January 2023, 27.2% of fully paid working days were from home. By June 2025, the rate had edged up to 27.9%. That's mostly thanks to smaller companies and startups, he said. It comes as some of the biggest names in corporate America have gone all in on time in the office. Amazon, Goldman Sachs, and JPMorgan require five days, while Starbucks said last week that it would bump its RTO mandate to four days from three. Researchers told BI that doing the opposite could help smaller firms compete for talent and cut costs. Many young workers focus on flexibility because juggling the demands of work and life tends to get easier as people age, said Ellen Ernst Kossek, a professor emerita of management at Purdue University who has researched work-life balance challenges. In a decadeslong study involving several hundred thousand workers, she found that people under 30, compared to older age groups, report more work and life conflict overall. That goes beyond family duties and includes time for exercise, domestic tasks, caring for pets, and just being alone. Rather than across-the-board mandates, Kossek said, employers should construct a human resources strategy that accommodates an organization's needs and those of its workers. "We've got to balance employer and employee interests, or nobody's going to want to work for big companies," Kossek said. While fresh grads in need of mentorship and empty-nesters inching toward retirement are often more inclined to enjoy going to the office, people of prime working age who are both experienced and relatively young — between 30 and 50 years old — are attracted to more flexibility, especially in tech industries, Stanford's Bloom said. Someone leaving school with a master's degree in computer science and a specialty in AI would fall into "one of the hottest talent pools out there," he said. If the grad had competing job offers and one employer allowed someone to work from home twice a week and one didn't, it would likely be an easy choice, Bloom said. Because caregiving responsibilities more often fall to women than men, rigid RTO requirements tend to lead to a paucity of women in the upper ranks of some prestige industries, he said. "It's pretty hard to argue that having 90% men in a firm is great for business, which is the case for many tech and finance companies now," Bloom said. Big businesses are under pressure In a year of tariff whiplash, many businesses are facing rising costs, and remote work can be an easy scapegoat for lackluster performance, Mark Ma, a University of Pittsburgh business professor, told BI. "A jerk-knee reaction is to blame remote work and call employees back to the office," Ma said. Although the US stock indexes have been notching record highs, Ma said that if investors grow worried, for example, that tariffs will eat into corporate profits, more companies could feel compelled to issue RTO mandates. Starbucks, which said in a recent email to staff that it would increase its RTO mandate to four days from three starting in October, saw its stock fall earlier in 2025, though it's now up slightly for the year. CEO Brian Niccol, who joined the Seattle coffee chain in the final months of 2024, wrote in the memo that having people together in person lets workers "share ideas more effectively, creatively solve hard problems, and move much faster." Kyle, who is a cofounder of CMP Research, told BI that certain types of work are often better done when colleagues are together, though not all work falls into this category. Flexibility can allow teams to best design their workflows, she said. Bloom, from Stanford, said that smaller and newer companies are more likely to embrace remote work and tend to grow faster. In contrast, older and larger firms are leaning more toward office-based work and typically see slower expansion. "Enforcing RTOs is kind of like saying we as a company have decided to cancel the corporate jet and halve all travel allowances," he said. Just like draconian cost cuts can signal trouble, a sudden RTO push could make investors nervous, Bloom said. Flexible work could reduce costs Smaller companies unable to offer paychecks equal to those in Magnificent Seven tech firms may be in luck if they offer more flexible work as a perk, said Ma. He said that allowing employees to work from home can allow workers to spend less on transportation and meals. At the same time, companies may even negotiate a salary cut with employees in exchange for greater flexibility. That could help companies hang onto workers. Bloom said that the ability to work from home two to three days a week could be worth as much as an 8% pay increase, which is "a meaningful amount" for higher-level managers who make six figures. Workers who have a hybrid setup tend to leave at lower rates, he said. That can be a big savings for companies. "Every person that quits costs a company a fortune because you've got to go out, advertise, reinterview, onboard, retrain — and you're still looking at six months until someone is as up to speed as the person who just quit," Bloom said.
Business Insider
21-07-2025
- Business
- Business Insider
As big businesses get aggressive with RTO, this may be the perfect time for smaller companies to scoop up workers
If David were taking on Goliath today, he might do it from home. Startups and smaller companies offering flexible work arrangements could better challenge larger rivals less willing to let employees log on from home, and many may already be doing so, workplace researchers told Business Insider. "It's a great way for small companies to compete with big companies for talent," said Nicole Kyle, who studies the future of work, about giving workers greater autonomy. Nick Bloom, an economics professor at Stanford University who studies remote work, told BI that his research shows that in January 2023, 27.2% of fully paid working days were from home. By June 2025, the rate had edged up to 27.9%. That's mostly thanks to smaller companies and startups, he said. It comes as some of the biggest names in corporate America have gone all in on time in the office. Amazon, Goldman Sachs, and JPMorgan require five days, while Starbucks said last week that it would bump its RTO mandate to four days from three. Researchers told BI that doing the opposite could help smaller firms compete for talent and cut costs. Many young workers focus on flexibility because juggling the demands of work and life tends to get easier as people age, said Ellen Ernst Kossek, a professor emerita of management at Purdue University who has researched work-life balance challenges. In a decadeslong study involving several hundred thousand workers, she found that people under 30, compared to older age groups, report more work and life conflict overall. That goes beyond family duties and includes time for exercise, domestic tasks, caring for pets, and just being alone. In-demand workers could choose flexibility Rather than across-the-board mandates, Kossek said, employers should construct a human resources strategy that accommodates an organization's needs and those of its workers. "We've got to balance employer and employee interests, or nobody's going to want to work for big companies," Kossek said. While fresh grads in need of mentorship and empty-nesters inching toward retirement are often more inclined to enjoy going to the office, people of prime working age who are both experienced and relatively young — between 30 and 50 years old — are attracted to more flexibility, especially in tech industries, Stanford's Bloom said. Someone leaving school with a master's degree in computer science and a specialty in AI would fall into "one of the hottest talent pools out there," he said. If the grad had competing job offers and one employer allowed someone to work from home twice a week and one didn't, it would likely be an easy choice, Bloom said. Because caregiving responsibilities more often fall to women than men, rigid RTO requirements tend to lead to a paucity of women in the upper ranks of some prestige industries, he said. "It's pretty hard to argue that having 90% men in a firm is great for business, which is the case for many tech and finance companies now," Bloom said. Big businesses are under pressure In a year of tariff whiplash, many businesses are facing rising costs, and remote work can be an easy scapegoat for lackluster performance, Mark Ma, a University of Pittsburgh business professor, told BI. "A jerk-knee reaction is to blame remote work and call employees back to the office," Ma said. Although the US stock indexes have been notching record highs, Ma said that if investors grow worried, for example, that tariffs will eat into corporate profits, more companies could feel compelled to issue RTO mandates. Starbucks, which said in a recent email to staff that it would increase its RTO mandate to four days from three starting in October, saw its stock fall earlier in 2025, though it's now up slightly for the year. CEO Brian Niccol, who joined the Seattle coffee chain in the final months of 2024, wrote in the memo that having people together in person lets workers "share ideas more effectively, creatively solve hard problems, and move much faster." Kyle, who is a cofounder of CMP Research, told BI that certain types of work are often better done when colleagues are together, though not all work falls into this category. Flexibility can allow teams to best design their workflows, she said. Bloom, from Stanford, said that smaller and newer companies are more likely to embrace remote work and tend to grow faster. In contrast, older and larger firms are leaning more toward office-based work and typically see slower expansion. "Enforcing RTOs is kind of like saying we as a company have decided to cancel the corporate jet and halve all travel allowances," he said. Just like draconian cost cuts can signal trouble, a sudden RTO push could make investors nervous, Bloom said. Flexible work could reduce costs Smaller companies unable to offer paychecks equal to those in Magnificent Seven tech firms may be in luck if they offer more flexible work as a perk, said Ma. He said that allowing employees to work from home can allow workers to spend less on transportation and meals. At the same time, companies may even negotiate a salary cut with employees in exchange for greater flexibility. That could help companies hang onto workers. Bloom said that the ability to work from home two to three days a week could be worth as much as an 8% pay increase, which is "a meaningful amount" for higher-level managers who make six figures. Workers who have a hybrid setup tend to leave at lower rates, he said. That can be a big savings for companies. "Every person that quits costs a company a fortune because you've got to go out, advertise, reinterview, onboard, retrain — and you're still looking at six months until someone is as up to speed as the person who just quit," Bloom said.
Yahoo
18-06-2025
- Business
- Yahoo
Tax law might be coming for your free office snacks
A change in tax law may make companies rethink a popular workplace perk: food and drink. Starting in 2026, companies will no longer be able to deduct the cost of on-site cafeterias or takeout for workers who stay late. And accountants say the change probably applies to office snacks and coffee, too. Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. Though the cost of such staff freebies is relatively small in the grand scheme of employee benefits, the potential change in tax law comes as many businesses are trimming expenses in the face of tariffs and economic uncertainty. 'Companies are in cost-cutting mode, and if they don't have some incentives, they will continue to cut back,' said Ellen Kossek, an emerita professor of management at Purdue University. 'We've seen this in Silicon Valley,' she added, referencing the onetime center of such upmarket perks as unlimited vacation time, on-site hair stylists, deluxe cafeterias and coffee bars. Because food can be a powerful motivator - especially at a time when many companies are abandoning remote and hybrid work - Kossek said companies' ratcheting down of staff offerings could affect the broader corporate culture and return-to-office initiatives. 'If you have to pay for your food, it's one less reason to come to the office.' U.S. tax law allow companies to deduct certain business costs, such as insurance, rent and office supplies, from their income before they pay taxes. But meals are treated differently, depending on the category. For instance, a company can deduct 50 percent of the restaurant bill for taking a client or a job candidate to lunch under current law. But a provision that allows companies to deduct cafeteria costs or any meals they provide in the workplace 'for the convenience of the employer' is poised to sunset in 2026. If it does, U.S. businesses would be looking at an additional $300 million a year in taxes, based on estimates by the Joint Committee on Taxation. With congressional Republicans racing to advance President Donald Trump's tax and immigration bill and extend his 2017 tax cuts, some accountants had expected lawmakers to retain the workplace meal deduction. But the House version made an exception only for the restaurant industry, according to Christa Bierma, vice chair of the American Institute of Certified Public Accountants' committee on employee benefits. Unless the Senate makes further changes to the legislation, which tax experts say is unlikely, restaurants will continue to get the write-off. 'For some industries, it is culturally demanded,' Bierma noted of the exception. 'Nobody would want to be the first one to say we're not going to do this anymore.' Ending the tax advantage makes philosophical sense for conservatives, said Tax Foundation analyst Alex Muresianu. Under current rules, a company-paid lunch is essentially a form of tax-free income. And if the employee isn't paying tax, the company should, Muresianu said. 'We want to tax all employee compensation the same,' he said. 'And instead of wages, having employer-provided meals in various contexts is a form of nonwage compensation.' That thinking, though, doesn't align with other provisions in the Republican bill, which treats overtime wages and tips as tax-free. Trump is pushing senators to pass his tax bill by July 4 despite warnings from many economists and some lawmakers about the projected price tag; the nonpartisan Congressional Budget Office expects it to expand the deficit by $2.4 trillion over a decade. In 2017, when lawmakers opted to sunset the in-house meal deduction in eight years, the coronavirus pandemic had not yet driven millions of workers home from their desks. Today, some management experts question the wisdom of removing a business incentive at a time when many workers are chafing at RTO mandates. 'I think the corporate culture will change in several ways,' said University of Manchester professor Cary Cooper, who has researched hybrid work arrangements. Free food can be a powerful motivator, he said. 'If they're taking that away … or minimizing the quality of the food being provided - and there will be companies that will do that - you're not going to motivate people to return to the office.' Cooper suggested that senators consider extending the deduction as they reshape the tax bill. Without a delay, he foresees repercussions for businesses that need employees on-site, such as hospitals. 'In our day and age, I think it's just silly. I don't know why you would want to change the law in that direction at all.' Last summer, Bierma's committee of CPAs submitted a long list of questions and suggestions to the IRS seeking guidance on how companies should plan for the change. It hasn't received an answer. The law clearly removes tax advantages for company cafeterias - businesses can no longer deduct the cost of food, beverages or operations, which are now fully or partly deductible. Also out are meals that employers might provide in the workplace, such as dinner for staffers who stay beyond their shifts. But that leaves questions about more modest niceties. Accountant Richard Pon, who counts law firms and retailers among his clients, is convinced that the deduction will also go away for break-room staples such as coffee, fruit, chips and granola bars. 'Just having a small kitchen … some people will take the position that's not an eating facility. That's not a cafeteria,' he said. 'I think the position of the IRS might say that's an eating facility, no matter how small it is.' Related Content Russian attack destroys Kyiv building as Trump avoids talk of new sanctions Field notes from the end of life: My thoughts on living while dying He's dying. She's pregnant. His one last wish is to fight his cancer long enough to see his baby. Sign in to access your portfolio
