Do RTO mandates actually raise productivity? Nope.
- Champa Ha
While more organisations are issuing Return To Office (RTO) mandates for employees, especially at S&P 500 organisations, recent research studying these organisations and their strict RTO policies found that in-office workers were not more productive than before.
Mark Ma, an Associate Professor of Business Administration from Pitt’s Katz Graduate School of Business, started the research hoping to understand why some big organisations wanted employees to return to the office while other firms avoided calling them back. Analysing firms that had publicly announced their RTO policies, Ma and his research team examined whether the mandates affected the financial performance and how such policies impacted the wellbeing of their employees. After comparing the financial performance of the firms on the stock market before and after implementing RTO mandates, the researchers saw no significant change in either the financial performance or the stock market value.
Even if employee productivity is better in the office, he said, the positive enhancement of productivity is cancelled out by the large number of expenses to accommodate them such as parking, office space, catering, or other in-house costs.
“One of the most common arguments management suggests is that they want to return to office because employee productivity is low at home, and they believe returns to office would help firms improve performance and ultimately improve the firm’s value,” Ma said. “That’s the reason they give — but our results actually do not support these arguments.”
What Ma also found about RTO policies was that managers who were issuing RTO mandates were, more likely than not, trying to use them to reassert their control over the employees who became more aware of their rights in the last three years.
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Ma suggested that high-performing employees who perform well at home should be allowed to continue at home. This would benefit the employee as well as the firm in the long-term to recruit and retain high-performing employees.
