Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
Bosses who signed office leases in the years leading up to the pandemic are becoming incensed by the rows of empty desks in offices they’re on the hook to pay for — and it’s a huge factor in their RTO mandates. That is, until 2028, at least.
It turns out that long inescapable office leases — rather than work output — might be the most powerful force in the return to office (RTO) push so many companies have been making or threatening to make.
One-third of companies surveyed in a recent report from Resume.org said that their company’s lease agreements are the anchoring force behind their return-to-office policies.
More than half of the leaders who lease an office told the online resume-writing company that the lease itself underpins the mandates. About 16% of companies said the leases have a “major impact,” while 38% said it plays some role.
Resume.org surveyed 900 business leaders for their report; around 600 of them are at companies that currently maintain office space, many of whom signed lengthy leases before the pandemic. About half of that group has leases that don’t end until 2028 at the earliest.
The silver lining? One in ten of those firms admitted that they plan to scrap the mandates entirely after their leases expire.
Roughly a quarter said they’ll be decreasing the amount of office space they rent when it’s time to renew.
We paid for the office space, we want to use it
In-office attendance, of course, doesn’t actually make a long, expensive rental agreement less burdensome.
Rather, it’s just the idea of workers being at their desk — making use of the space — that is likely to quell bosses’ concerns and provide the feeling of money well spent, or at least better spent.
There’s really just one economic factor to the RTO push vis-a-vis rental agreements, and it’s fairly minor, Brian Elliott, CEO of leadership advisory Work Forward, tells Fortune.
“Sometimes [companies] have minimum commitments to vendors in the building.” Perhaps a coffee shop in the lobby or the fast-casual chain on the street level. But “that’s clearly not the standard case,” Elliott said, and it’s only applicable if a business owns or leases a whole building.
With that in mind, the imperative for people in offices that are already being paid for is more emotional than practical. The mere sight of rows of empty desks is a common reason for executives to push a return-to-office directive through, Elliott explained.
More stories for you
“One CEO said to me, ‘I don’t know that they’re walking the dog four hours a day at home, but I know they can’t be if they’re in the office,’” Elliott said.
An empty or nearly empty office just stokes that fear, even if it’s inaccurate. Just ask Elon Musk, one of the most vocal proponents of in-office work as a means of improving morale.
In 2022, Musk emailed his employees at Tesla with the directive to work in-person 40 hours per week, or else company leadership “will assume you have resigned.”
Then at X, which he bought when it was Twitter in October 2022, he stormed into the corner office with an instant threat to lay off any workers who wanted to carry on working from home.
He claimed remote workers are just “pretending to work,” and any employees who insisted on teleworking must run their argument by him to personally and individually approve.
Musk says WFH costs the federal government $2 trillion
Most recently, Musk has emphasized his stance as an advisor to the incoming Trump administration — heading up the Department of Government Efficiency (DOGE) with Vivek Ramaswamy — and is setting his sights on five-day office mandates for government workers.
Empty offices and lack of in-person work among federal employees, Musk has argued, is causing an enormous waste of federal funds — maybe even $2 trillion (though experts refute this).
“If you exclude security guards and maintenance personnel, the number of government workers who show up in person and do 40 hours of work a week is closer to 1%! Almost no one,” Musk wrote on X, linking to a New York Post write-up of a pro-office report from Iowa Senator and staunch DOGE supporter Joni Ernst.
“Literally thousands of empty buildings, not just in America, but around the world, paid for with your tax dollars!” he wrote.
Written by Jane Thier for Fortune as “Like Elon Musk, 1 in 3 bosses admit they are pushing RTO because they’re so upset about wasting money on all those empty desks” and republished with permission.
