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Time Magazine
29-05-2025
- Business
- Time Magazine
The return-to-office reality gap
By Fortune 500 companies are leading a significant shift in workplace policies, with full-time office mandates nearly doubling from 13% to 24% since Q4 2024, according to the latest Flex Index data. But a critical gap has emerged that's impossible to ignore: these increasingly rigid policies are colliding with stubborn workplace realities. The most revealing finding? While policy requirements for office attendance have jumped 10% since early 2024, actual attendance has barely moved, increasing less than 2% during the same period based on data collected by Stanford Professor Nick Bloom and his team. This growing compliance gap signals something fundamental: employees are quietly rejecting mandates they find disconnected from both their needs and their demonstrated productivity. The conventional narrative that American workplaces are abandoning flexibility doesn't hold up to scrutiny. Overall, 67% of US companies still maintain flexible work arrangements, with structured-hybrid models (for example, three-day-a-week policies) dominating at 43% of firms. While larger companies push for more office days, the vast majority of organizations with fewer than 500 employees (70%) remain fully flexible (no requirements for people to be in offices.) Even in companies with the strictest policies, reality proves stubborn. According to Occuspace CEO Nic Halverson, whose workplace occupancy sensor technology is deployed across Fortune 500 companies, many firms mandating five days in office see almost the same rate of utilization as those with more flexible policies. Even organizations threatening termination for non-compliance haven't moved the needle significantly. Why does this gap persist? Three key factors: The underlying math is flawed. Pre-pandemic office utilization already averaged around 50-60% due to vacations, business travel, sick days—and employees who already had a flexible setup. Firms who set three-day in-office policies in the past few years typically see 1.5 to two days of actual attendance, which isn't an outlier given the broader historical context. Compliance isn't performance. Managers facing pressure to 'do more with less' are unlikely to terminate high-performing employees whose only shortcoming is imperfect attendance. While non-compliance might occasionally facilitate the removal of underperformers, the persistent attendance gap suggests this remains rare. The silent agreement between managers and their best talent is evident: results matter more than physical presence. Mandates exclude critical talent pools. Five-day in-office requirements disproportionately impact significant segments of the workforce. Women, regardless of caregiving situations, prefer more flexibility and are three times more likely to leave under rigid return-to-office (RTO) mandates. Neurodivergent employees who thrived with fewer sensory challenges at home face renewed barriers. For workers with disabilities, the flexibility revolution had finally created more accessible employment opportunities—which mandates now threaten to reverse. Executives now face a consequential choice: double down on attendance policies they know put them at odds with their workforce and place their managers in untenable positions, or invest in systems that make flexible work truly effective. The most successful organizations are choosing the latter path, developing regular purposeful gatherings for distributed teams and implementing robust outcomes-based management frameworks that focus on results rather than visibility. The irony shouldn't be lost on anyone: many of the same leaders imposing rigid, top-down RTO mandates are simultaneously urging their teams to embrace generative AI and other transformative technologies. These contradictory approaches—command-and-control rigidity for workplace presence versus innovation and adaptation for technology adoption—create organizational whiplash. There are only so many 'sticks' leaders can wield before something breaks, usually in the form of disengagement, quiet quitting, or outright departures of valuable talent. The most effective leaders recognize that trust and flexibility aren't just employee perks, they're essential ingredients for navigating the multiple transformations reshaping today's workplace.
Herald Sun
29-04-2025
- Business
- Herald Sun
The future is hybrid: Why WFH is a win for Aussies and saving businesses money
Australia is now among the global leaders in hybrid work adoption, with levels stubbornly remaining higher than before the pandemic, despite efforts by some employers to force staff back into the office. Speaking at a Committee for Economic Development of Australia (CEDA) event on Tuesday, Stanford University Professor Nick Bloom said work-from-home rates had stabilised across English-speaking countries, including Australia, with hybrid arrangements firmly taking hold. 'The big picture I want to tell you is, one, work from home has kind of stabilised. There has not been a return to the office,' Professor Bloom said. 'The reason it's there is hybrid has turned out to be very profitable for firms.' Research shows that 80 per cent of Fortune 500 companies have committed to hybrid models after trials showed no loss in productivity and a 35 per cent drop in staff turnover, cutting recruitment costs and improving retention. A new CEDA report reveals that Australians working from home since the pandemic are saving an average of 3.4 hours a week on commuting, translating to an annual time and cost saving of $5308. The research also shows a 4.4 per cent rise in workforce participation, with remote workers often clocking nearly 20 per cent more hours. This shift has particularly benefited groups previously hindered by on-site work, such as parents and those with health conditions. Professor Bloom said hybrid working would stay in Australia because it made financial sense. A landmark six-month randomised control trial involving 1600 employees at travel giant found no decline in productivity when staff worked two days remotely each week, but quit rates fell by 35 per cent. 'Every person that quits costs us about $50,000 because we've got to go out, readvertise, reinterview, retrain, re-get up to speed,' he said. 'Hybrid is phenomenally profitable.' Several high-profile businesses have forced workers back into the office in the past year, including Tesla and Amazon in the US, while in Australia, Tabcorp and the NSW government have also ended flexible arrangements. Opposition leader Peter Dutton has vowed that under a Coalition government public servants would be forced back into the office five days a week. He later back flipped as the gap between worker and employer expectations continues to widen. Professor Bloom warned that companies failing to manage hybrid work well risk losing employees to firms that offer better flexibility. Poorly executed policies — such as those without co-ordinated in-office days — could drive chief executives to abandon hybrid altogether. 'A good law is an easy-to-enforce law,' he said. 'Set a sensible plan — maybe three days in the office, co-ordinate on fixed days, and then stick to it.' CSIRO chair Ming Long, speaking at the same event, said hybrid work was crucial for building operational resilience in an era of climate disruption, pandemics and other shocks. 'I want to have that level of resilience in the organisation to adapt to whatever catastrophe or whatever thing is going to disrupt the organisation,' Ms Long said. 'That muscle needs to exist well into the future.' She said organisational culture would be critical in ensuring teams could switch rapidly between home and office in the face of unexpected disruptions. 'If you're always just working in the office, then the level of resilience in the organisation to adapt to whatever catastrophe or whatever thing is going to disrupt the organisation will disappear. That muscle needs to exist, and it needs to exist into the future,' Ms Long said. The rise of remote work has also had profound impacts on cities and real estate markets. Professor Bloom said spending and populations had shifted to the suburbs, while central business districts remained less populated than before the pandemic. 'People moved out of city centres into the suburbs,' he said. 'Traffic patterns are better. Sandwich shop demand is down in the city centre but way up in the suburbs.' While office occupancy is sitting at about 60 per cent of pre-pandemic levels, Professor Bloom said the narrative of a commercial real estate collapse was overblown. 'It turns out that those three days tend to be Tuesday, Wednesday, Thursday, and it's actually very hard to share offices,' he said. Professor Bloom said about 20 per cent of workers never wanted to work from home — typically younger employees who valued social connection — while about 30 per cent wanted to work remotely full-time, usually older workers with young families. 'There's no one-size-fits-all,' he said. 'As long as you stick with it as a company … over time your employees are going to adjust.' Ms Long said leaders who failed to adapt their management styles for hybrid workforces would be left behind. 'If you do not know, as a leader, how to lead in hybrid, then maybe you are not the leader for the organisations of the future,' she said. Originally published as The future is hybrid: Why WFH is a win for Aussies and how it's saving businesses money
NBC News
07-02-2025
- Business
- NBC News
Many workers would take a pay cut to work from home — some would forgo at least 20% of their salary
Many workers value remote work to such a degree that they'd take a pay cut to be able to work from home, even on a part-time basis, studies show. The prevalence of remote work ballooned during the Covid-19 pandemic. Many experienced telework perhaps for the first time in their careers; employees cite work-life balance as by far the biggest perceived benefit, according to Pew Research Center. Some researchers have quantified the financial value workers assign to telework. For example, about 40% of workers say they'd accept a pay cut of at least 5% to keep their remote job, according to a recent study by researchers at Harvard University, Johns Hopkins University and the University of Illinois at Urbana-Champaign. About 9% would trade at least 20% of their salaries to preserve telework, said researchers, who polled more than 2,000 workers. Put another way, workers see the ability to work from home — even two or three days a week — as equivalent to getting a raise, according to Nick Bloom, an economics professor at Stanford University who studies workplace management practices. Data that Bloom has collected in recent years suggests the average worker equates remote work to about an 8% raise, he said. 'That figure seems remarkably stable' over time, Bloom said in an e-mail. 'For some subsets of workers you can find higher numbers,' relative to the pay cut they would accept, Bloom said. For example, a National Bureau of Economic Research working paper published in January that looked at workers predominantly in the technology field found they'd accept an average 25% pay cut for a job that offers fully or partially remote work. 'The reality is: It is a very attractive feature of a job,' said Zoe Cullen, an assistant professor of business administration at Harvard Business School, who co-authored the NBER research. The paper examined data on almost 1,400 workers from the U.S. tech sector. The average person was 32 years old, and had about seven years of work experience. Researchers gathered data on the job offers individuals receive and the jobs they ultimately choose, with the average gig offering $239,000 a year in total compensation. Of course, not all Americans prefer out-of-office work. About 41% of workers with the ability to telework — but who rarely do — say in-office work helps them feel more connected to co-workers, and 30% think in-person work helps with mentoring opportunities, according to Pew Research Center. Working from home has also waned from its pandemic-era peak. Big companies like Amazon, AT&T, Boeing, Dell Technologies, JPMorgan Chase, UPS and The Washington Post have initiated return-to-office mandates for at least some employees. President Donald Trump also issued an order Jan. 20 to terminate remote work for federal employees and require full-time in-office attendance, with some exceptions. That said, on a national scale, employers don't seem to be retrenching en masse, according to labor economists. The number of paid days worked from home during the workweek has held steady for the past two years, at between 25% and 30% — more than triple the pre-Covid rate, according to WFH Research. Employees aren't the only ones who get a benefit: Remote work is also a profitable arrangement for businesses, according to labor economists. For example, employers may save money on real estate by downsizing office space. They may also hire job candidates from across the country, potentially at a lower relative salary, depending on geography. Workers with the ability to work from home also tend to quit less frequently, thereby reducing company spending on expensive functions like hiring, recruitment and training, Bloom said.
