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We're Now Finding Out The Damaging Results of The Mandated Return to Office — And It's Worse Than We Thought. Companies knew the mandated return to the office would cause some attrition, however, they were not prepared for the serious problems that would present.

By Gleb Tsipursky Edited by Maria Bailey

Opinions expressed by Entrepreneur contributors are their own.

We're now finding out the damaging consequences of the mandated return to office. And it's not a pretty picture.

A trio of compelling reports — the Greenhouse Candidate Experience Report, the Federal Reserve's Survey of Household Economics and Decisionmaking (SHED), and Unispace's "Returning for Good" report — collectively paint a stark picture of this brewing storm.

Unispace finds that nearly half (42%) of companies that mandated office returns witnessed a higher level of employee attrition than they had anticipated. And almost a third (29%) of companies enforcing office returns are struggling with recruitment. Imagine that — nearly half! In other words, they knew it would cause some attrition, but they weren't ready for the serious problems that would result.

Perhaps they should have. According to the same Greenhouse report, a staggering 76% of employees stand ready to jump ship if their companies decide to pull the plug on flexible work schedules. Moreover, employees from historically underrepresented groups are 22% more likely to consider other options if flexibility goes out the window.

In the SHED survey, the gravity of this situation becomes more evident. The survey equates the displeasure of shifting from a flexible work model to a traditional one to that of experiencing a 2 to 3% pay cut.

Related: You Should Let Your Team Decide Their Approach to Hybrid Work. A Behavioral Economist Explains Why and How You Should Do It.

The talent hunt: A game of chess with flexibility as the queen

In the game of talent acquisition and retention, flexible work policies have swiftly emerged as the queen on the chessboard — commanding, decisive and game-changing. The Greenhouse, SHED, and Unispace reports — when viewed together — provide compelling evidence to back this assertion.

Greenhouse finds that 42% of candidates would outright reject roles that lack flexibility. In turn, the SHED survey affirms that employees who work from home a few days a week greatly treasure the arrangement. It's like enjoying a day at the beach while still being connected to the digital world.

Curious about what's luring employees away? The Greenhouse report has cracked the code:

  • Increased compensation (48%)
  • Greater job security (34%)
  • Career advancement opportunities (32%)
  • Better flexible work policies (28%)
  • A more positive company culture (27%)

In other words, excluding career-centric factors such as pay, security and promotion, flexible work policies shine brighter than the Vegas Strip in employee desires.

Interestingly, Unispace throws another factor into the mix — choice. According to their report, overall, the top feelings employees revealed they felt towards the office were happy (31%), motivated (30%) and excited (27%). However, all three of these feelings decrease for those with mandated office returns (27%, 26% and 22% respectively). This highlights that staff are more open to returning to the office if it is out of choice, rather than forced.

Case studies of attrition with the return to office

Take, for example, a regional insurance company with a workforce of around 2000 employees. The company enforced a return to the office policy, causing waves of unrest. It soon became evident that their attrition rates were climbing steadily. It echoed the Greenhouse report's findings: a majority of employees, 76%, would actively seek a new job if flexible work policies were retracted. The underrepresented groups were even more prone to leave, making the situation more daunting.

At that point, they called me to help as a hybrid work expert that The New York Times called the "Office Whisperer." We worked on adapting their return-to-office plan, switching it from a top-down mandate to a team-driven approach, focusing on welcoming staff to the office for the sake of collaboration and mentoring. As a result, their attrition rates dropped and the feelings of employees toward the office improved, in line with what the Unispace report suggests.

In another case study, a large financial services company began noticing employee turnover despite offering competitive salaries and growth opportunities. Upon running an internal survey, they realized that, aside from better compensation and career advancement opportunities, employees were seeking better flexible work policies. This aligned with the Greenhouse and SHED findings, which ranked flexible work policies as a crucial factor influencing job changes. After consulting with me, they adjusted their policies to be more competitive in offering flexibility.

A late-stage SaaS startup decided to embrace this wave of change. They worked with me to introduce flexible work policies, and the result was almost immediate - they noticed a sharp decrease in employee turnover and an uptick in job applications. Their story echoes the collective message from all three reports: companies must adapt to flexible work policies or risk being swept away.

Related: Why Empowering Your Hybrid Workers to Co-Create a Winning Return to Office Plan Leads to Longterm Gain

The brain factor: How cognitive biases play a role

As we navigate these shifting landscapes of work, we cannot ignore the human elements at play. Like unseen puppeteers, cognitive biases subtly shape our decisions and perceptions. In the context of flexibility and retention, two cognitive biases come into sharp focus: the status quo bias and anchoring bias.

Imagine a thriving tech startup, successfully operating in a hybrid model during the pandemic. As the world normalized, leadership decided to return to pre-pandemic, in-person work arrangements. However, they faced resistance and an unexpected swell of turnover.

This situation illustrates the potent influence of the status quo bias. This bias, deeply entrenched in our human psyche, inclines us towards maintaining current states or resisting change. Employees, having tasted the fruits of flexible work, felt averse to relinquishing these newfound freedoms. The Greenhouse report bears testament to this, with 76% of employees open to job hunting if their company rolled back flexible work policies.

Consider a large financial institution that enforced a full return to office after the pandemic. Many employees, initially attracted by the brand and pay scale, felt disgruntled. The crux of the problem lies in the anchoring bias, which leads us to heavily rely on the first piece of information offered (the 'anchor') when making decisions.

When initially joining the company, the employees were primarily concerned with compensation and job security, the "anchors" in their decision-making process. However, once within the fold, the pandemic caused them to shift their focus to work-life balance and flexibility, as confirmed by both the Greenhouse and SHED reports. Unfortunately, the rigid return-to-office policy made these new anchors seem less attainable, resulting in dissatisfaction and an increased propensity to leave.

So, as we steer our ships through these tumultuous waters, understanding these cognitive biases can help illuminate our path. Recognizing and accounting for the status quo and anchoring biases can enable us to create a workplace that not only attracts but also retains its employees in this age of flexibility. After all, success in the world of business is as much about understanding people as it is about numbers and strategy.

Embracing the wave of change

If there's one overarching theme resonating from the Greenhouse, SHED, and Unispace reports, it's this: Companies need to embrace the wave of flexible work policies or risk being left adrift. As we set sail into the future of work, flexibility isn't just a passing trend; it's a necessity, the new standard. After all, the key to not just attracting talent, but retaining it, lies in one simple word: flexibility. To ignore it is like trying to run a marathon with one shoe. Possible, perhaps, but far from comfortable or efficient.

Gleb Tsipursky

CEO of Disaster Avoidance Experts

Dr. Gleb Tsipursky, CEO of Disaster Avoidance Experts, is a behavioral scientist who helps executives make the wisest decisions and manage risks in the future of work. He wrote the best-sellers “Never Go With Your Gut,” “The Blindspots Between Us,” and "Leading Hybrid and Remote Teams."

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