No More Calling It In

Trailblazer Elon Musk began insisting in November 2022 that employees at X, then Twitter, must work on-site 40 hours per week. Later, Zoom, an iconic work-from-home enabler, announced in August 2023 that workers living within 50 miles of an office must come in twice a week. That same month, the dating app Grindr demanded workers relocate to its Los Angeles headquarters or another hub city like New York or Chicago. Among 178 Grindr employees, 82 refused and were dismissed.

Gradually ditching remote

Remote practices are in transition as a hot labor market shifts toward a more mixed environment. According to the Bureau of Labor Statistics, in March 2021, 60% of businesses reported little to no telework. What a difference a year made as workers filtered back. By 2022, 75.2% had moved to a little telework. In other words, employers were issuing ultimatums to return.

These findings were clearly unevenly dispersed across various sectors. For example, at one end of the spectrum, a vast majority were still showing up for duty in September 2022, while in the following industries, small percentages worked from home:

  • Retail (2.1%).
  • Construction (2.1%).
  • Natural resources and mining (2.1%).
  • Health care and social assistance (4.4%).
  • Transportation and warehousing (4.4%).

In these sectors, it became less imperative to clock in:

  • Information (42.2%).
  • Professional and business services (25%).
  • Education (19.7%).
  • Wholesale trade (17.2%). 

Currently, most businesses are requiring or contemplating at least a partial return. Some have stopped advertising for remote positions in job listings. A number of companies jumped on the bandwagon to water down working from home. For instance, as 2023 closes, Disney expects workers on-site four days a week; Amazon, IBM and Meta expect three days a week; and Walmart, which mandates two days a week, has also relocated hundreds of people while it closes offices in several cities. 

 The productivity argument

The battle is pitched. Camps advocate remote (mainly workers) versus on-site (mainly bosses) advantages. Microsoft researchers have coined the phrase "productivity paranoia," describing how managers are skeptical that employees at a distance are more productive. Some maintain that in-person attendance is too important to sacrifice for catering to employee preferences or public attitudes. Many companies like Google and Salesforce, which could feasibly be fully remote, have rejected that route due to these tangible reasons:

  • It is detrimental to new hires and junior staff, who lose out on training and meeting colleagues. Firms note that 80% of new hires who experience poor onboarding are more likely to quit. Mentorship and skill development continue to lag.
  • Teamwork suffers, especially when in-office days are not aligned; cohesive culture and loyalty slide; and creativity, spontaneity and brainstorming decline.
  • Remote employees work three and a half hours less per week, according to Liberty Street Economics, an arm of the Federal Reserve Bank of New York.
  • Blurred boundaries between home and office impact mental health.
  • A digital divide leads to unequal career opportunities. Sixty percent of managers admit remote workers would be culled first.

So, productivity is at stake. But don't forget the wasted hours of office chitchat.

 Cities need workplace tax revenues

Since COVID-19, a generation has given up U.S. offices for sun and cheap living. Employers have reasons to bring workers and their tax revenues back before it is too late.

Meanwhile, managers are finding an ally in urban landlords. When office real estate flounders, tax collections decline, setting off a vicious doom loop cycle. Fewer tax revenues lead to cuts in public services, from libraries and transportation to garbage collection. The numbers add up: For instance, office taxes make up approximately 20% of New York's property tax inflows.

Lower income will be reflected in tax assessments. People will fight those assessments if they seem lower than market value, putting added pressure on revenues. If quality of life deteriorates, employees will be even less enthusiastic about living and working in cities.

The bottom line? Keep an eye focused on the long-term future and your company's needs.