This Labor Day unofficially marks the fourth year of return-to-office (RTO) initiatives, and we know so much more than we did even just a year ago about what’s working and what’s not for companies, including real-world patterns of office use, productivity and cost implications, and the role of offsites. To guide how your organization is approaching it, here are experts’ top takeaways, edited for length and clarity:
Hybrid work is saving companies millions of dollars.
Nicholas Bloom, William Eberle Professor of Economics at Stanford University
Hybrid work can be massively profitable. This is the key result from many studies, including, for example, my 2024 Nature paper. Having employees in the office three days a week does not seem to impact productivity. This appears to be enough time for mentoring, connecting, and innovating. The big win comes from a major reduction in recruitment and retention costs. The Society of Human Resource Management estimates it costs roughly 50% of professional salary if employees quit due to recruiting, training, and experience costs. So if you have quit rates that are, say, 30% a year and hybrid cuts them by a third (as it did in the Nature experiment) you are avoiding about 10% of quits, saving around 5% on your wage bill. That’s a big win, and for large companies adds up to tens of millions in savings.
Intentional flexible work plans can drive teamwork, connection, and retention.
Dr. Molly Sands, head of the Atlassian Teamwork Lab.
For Atlassian, we’ve spent the past four years learning from our own scaled experience with distributed work. Here’s what we know:
- Working in a distributed environment can enable more effective teamwork. Because we are working online more than ever before, distributed teams are accustomed to working asynchronously and progressing work forward without scheduling a meeting.
- In person time still matters. But we’ve also learned that teams foster connection through intentional onsite gatherings, not sporadic office attendance. Atlassian data shows that bringing teams together intentionally does impact team connection and productivity, but you only need to do it ~3 times per year to be effective.
- Flexibility is a requirement for attracting and retaining top talent. We know that RTO mandates drive out top talent and drive down diversity, and data findings consistently report that workers rank location and schedule flexibility as the most important reasons for staying with an organization.
Accelerating hybrid-work trends could pave the way for four-day workweeks.
Jonathan Weindel, head of data analytics at Envoy
There continues to be acceleration in terms of the widespread use of hybrid work models and RTO efforts. Office foot traffic is up about 21% compared to this time last year, and there was a pretty big surge in terms of foot traffic towards the end of 2023, which has continued into 2024, signaling that physical workplaces are continuing to thrive.
We see that the most volume in terms of workplace entries is happening in the middle of the week. Only 10% of workplace traffic happens on Fridays. And this was not something that we saw pre-Covid, when there was a pretty even distribution throughout the week. In 2020, it started off about 20% on Fridays, then down to 19% in 2021. Fast forward a year later, January ‘22, it went down to 16%, then down to 11% in ‘23, and then now we’re sitting at about 10.6%. That’s been consistent all year.
It leads to the question of what’s in store for the traditional Friday workday. There’s been a lot of media interest in four-day workweeks, with a number of companies in Europe and the US experimenting with this. There could be a natural transition as we see deceleration of entries on Fridays into this more natural four-day workweek.
Making work arrangements work for caregivers is a design choice.
Reshma Saujani, founder and CEO of Moms First
What we know now is that workplaces can actually be designed to work for moms. Four years ago, we didn’t think it was possible to have flexibility. We thought that if you gave people flexibility that they wouldn’t be as productive. We know now that that’s not true. Sometimes people just need to have predictability about their schedule or flexibility to pick up a sick child or care for a parent that’s not feeling well. They don’t want to have to feel that they have to lie about their identity as a caretaker because it will compromise their ability to succeed in their workplace. We know now that it’s possible, and we should be embracing remote work. We should be embracing flexibility everywhere.
The struggling commercial real estate market is getting a boost from RTO mandates and upcoming interest rate cuts.
Nick Romito, founder and CEO of commercial real estate platform VTS
The real estate market has been in a recession for many years, but a potential economic recession is helping the office market come out of a downturn. As unemployment goes up, a lot of the power goes back to employers, many of whom clearly want people in the office. That means return to the office goes up, a net positive for office buildings. Now you’ve got interest rates going down, which is also a net positive for the office market. I don’t think anyone’s ever seen a scenario like that, where a recession could potentially positively impact a big part of the market, the world’s second biggest asset class.
We’re tracking and looking at basically 100% of the actual searches for office space, both people physically going and touring space, but also online. And so you’ve got a year of growth, a consistent year of growth that we haven’t seen before, and that’s even before rates go down. That tells us that our recession on the real estate side is either over or about to come to an end in spite of whatever happens with the macroeconomy.
For individuals confronting another wave of RTO mandates, focus on what gives you joy.
Daisy Auger-Dominguez, fractional chief people officer and author of Burnt Out to Lit Up
Unfortunately, what we’re seeing from a lot of organizations is a retrenchment in demanding that people come back to the offices. For some of them it’s working, but what you end up having is really a bunch of unhappy employees coming back.
We’ve spent the last four years figuring out why we work, where I work, and for what reasons. Now, we’re going to have to find out what works for us and focus on what gets us energized and gives us joy. I stopped commuting and had to get used to commuting again. And that sucked, but I found that I love thinking about what outfit I’m going to wear that day. It’s silly, and it feels really superficial, but that got me motivated to get up and go out into the world. After a couple of weeks of commuting back to the office, I started leaning on that muscle memory.
Check out our guide to applying product thinking to flexible-work strategy.
For examples of how companies have tackled offsites, office design, and experimentation, read our case study on Allstate’s and Zillow’s flexible-work policies.
Update September 4, 2024: This article was updated to include remarks from Reshma Saujani, founder and CEO of Moms First.