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https://arstechnica.com/science/2024/02/rto-doesnt-improve-company-value-but-does-make-employees-miserable-study/>
'For some, having to work from home during the COVID-19 pandemic was stressful.
Parents balanced job duties while caring for children. Some struggled to set up
a home office and adjust to new tools, like video conferencing. Lonely workdays
at home added to social isolation. The line between work and life blurred.
For others, working from home was a boon—comfort, convenience, flexibility, no
commuting or rush-hour traffic, no office-environment distractions. When the
acute aspects of the pandemic receded, some who at first struggled began to
settle into a work-from-home (WFH) groove and appreciated the newfound
flexibility.
Then, bosses began calling their employees back to the office. Many made the
argument that the return-to-office (RTO) policies and mandates were better for
their companies; workers are more productive at the office, and face-to-face
interactions promote collaboration, many suggested. But there's little data to
support that argument. Pandemic-era productivity is tricky to interpret, given
that the crisis disrupted every aspect of life. Research from before the
pandemic generally suggested remote work improves worker performance—though it
often included workers who volunteered to WFH, potentially biasing the finding.
For a clearer look at the effect of RTO policies after the pandemic, two
business researchers at the University of Pittsburgh examined a sample of firms
on the S&P 500 list—137 of which had RTO mandates and 320 that clearly did not
between June 2019 and January 2023. The researchers collected publicly
available data on each company, including financial data and employee reviews.
They then looked at what factors were linked to whether a firm implemented an
RTO policy—such as the company's size, financial constraints, and CEO
characteristics—as well as the consequences of the RTO mandates—employee
satisfaction and financial metrics of the firms.
Overall, the analysis, released as a pre-print, found that RTO mandates did not
improve a firm's financial metrics, but they did decrease employee
satisfaction.
Drilling down, the data indicated that RTO mandates were linked to firms with
male CEOs who had greater power in the company. Here, power is measured as the
CEO’s total compensation divided by the average total compensation paid to the
four highest-paid executives in the firm.
Before the analysis, the researchers hypothesized that RTO mandates may be used
to blame employees for poor firm performance. But, companies that have
institutional ownership—such as hedge funds or endowments—would not fall for
such a "blame game" and would thus be less likely to implement an RTO mandate.
The data supported those hypotheses. Firms with weaker stock performance before
employees were able to return to the office were more likely to enforce RTO
mandates. However, institutional ownership decreased the probability of RTO
mandates.
Although CEOs often justified RTO mandates by arguing that returning to the
office will improve the company's performance, "Results of our determinant
analyses are consistent with managers using RTO mandates to reassert control
over employees and blame employees as a scapegoat for bad firm performance,"
the researchers concluded.'
Via Frederick Wilson II.
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
