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While there’s been discussion for years blaming return-to-office mandates on productivity issues, new research reveals that it’s often tied to bad stock performance, and that the decision only made things worse.
Researchers from the Katz Graduate School of Business at the University of Pittsburgh published a study exploring the effects of return-to-office (RTO) mandates on corporate performance.
The study examined data from 137 companies listed in the S&P 500 and reveals a higher prevalence of RTO mandates were initiated at companies that had previously experienced weak stock performance.
The data further suggests that these mandates didn’t noticeably improve stock returns or profitability at these firms. According to the published paper, researchers also observed “significant declines in employees’ job satisfactions.”
According to a report published by Business Insider, the study used employee feedback data from Glassdoor, which reveals a decline in employees’ ratings of work-life balance, senior management, and overall job satisfaction due to RTO mandates. However, the researchers mentioned that it’s also likely there are many employees who view RTO as a factor contributing to greater collaboration amongst teams.
There are many CEOs embracing hybrid work arrangements rather than insisting on full-time office work, and this work environment became the popular compromise between employees and employers. There isn’t a one-size-fits-all plan laid out for every organization, rather, there is need to recognize the value of work beyond just physical presence in an office — as illustrated by data revealing 80% of executives regret their own return to office policies.
