The executive hubris driving five-day in-office mandates

In January, United Parcel Service CEO Carol Tomé announced the international logistics company was cutting 12,000 of its 85,000 management jobs. Workers who weren't axed would be expected in the office five days a week starting March. For the corporate staffers who can perform some or all their duties from home, the mandate came as an ice-water bath.

For employees like these who spend most of their days in front of a computer, workplace experts insist remote and hybrid work cannot easily be stuffed back into the bottle. "It's become so much of a mainstay now," says Colleen Flaherty Manchester, professor in the work and organizations department at the University of Minnesota's Carlson School of Management, US. We can't go backwards, she says.

Years of post-pandemic data has shown remote and hybrid work works. Researchers have found employees retain productivity and can help companies drive profits. There are also the intangible factors that breed employee loyalty, such as better work-life balance. Throughout the past several years, many CEOs courting the idea of full office returns have pulled back due to this data and the strong pushback of their workers. 

Yet these factors haven't stopped a handful of companies, including some very high-profile employers, from issuing mandates – or at least heavy-handed, public suggestions – that corporate workers should be back at their desks five days a week.

In finance especially, major institutions – including JPMorgan Chase, Goldman Sachs and Citigroup – have instituted five-day-attendance policies for many of its staff. Boeing, too, has taken the decision to require much of its corporate workforce back at their desks. Some data shows even more top brass are considering it, especially among large organisations.

Some leaders are just used to a certain command-and-control mode – Stephen Meier

Some experts, including Stephen Meier, chair of the management division at Columbia Business School in New York, remain genuinely baffled why companies like UPS are putting up a fight over return-to-office. But he believes there's a common thread among many of these firms: hard-line management tactics.

"You can't continue that leadership style that you had before [the pandemic]," he says. "You need to actually empower [employees] … And, I think, some leaders are just used to a certain command-and-control model."

This is true of many outspoken critics of remote work, such as Tesla CEO Elon Musk, who was one of the first to issue a "show-up-or-quit" ultimatum back in 2022. In a May 2023 interview with CNBC, Musk launched an expletive-laden attack on workers who wanted flexible set-ups, saying the "laptop class" was "living in la-la land". 

Nicholas Bloom, a professor of economics at Stanford University, says Musk's attitude towards remote work goes beyond the company's needs. "His life is his company," he says. "If you're Elon Musk, you basically want to spend every minute awake and work. It's the place your mind focuses on. You love it. It's your career. It's your aspiration where all your money is invested." Some CEOs with this mentality expect the same of their workers: if I am back, you will be, too.

This blunt-force, power-driven approach also showed up with JPMorgan Chase's CEO, Jamie Dimon, when he doubled-down on in-person work in July 2023. If employees wanted the prestigious organisation on their CVs, Dimon made clear they were to follow his mandate. "I completely understand why someone doesn't want to commute an hour and a half every day. Totally get it… Doesn't mean they have to have a job here, either," he said.

Beyond the cult of personality, some of these strong-armed mandates may be driven by a different type of desire for control – especially in the current uncertain economy, when corporate performance and earnings are shaky.

Bloom points to a 2023 paper by two University of Pittsburgh Katz Graduate School of Business professors who examined 137 different return-to-office announcements over the past year. The research found managers use return-to-office mandates "to reassert control over employees and blame employees as a scapegoat for bad firm performance". Bloom says many CEOs who are leading companies in financial tumult feel pressure to make broad, sweeping – even "desperate" – changes to prove to shareholders they're shoring up the bottom line.

He points to UPS's Tomé, whose company reported a steeper-than-expected revenue drop in their Q4 2023 earnings. "The CEO has to stand up and say something, and has to take radical action," says Bloom, "otherwise she's out of a job. This is what's going on."

This kind of executive peacocking may convince some shareholders getting workers back in office will be a panacea – but experts say recalling employees could come back to haunt leaders.

The CEO has to stand up and say something, and has to take radical action, otherwise she's out of a job – Nicholas Bloom

"I think a couple of these Sun King CEOs like Elon Musk have this problem," says Bloom, a reference to French absolute monarch King Louis XIV. "They're just out of touch with their employees, and they're not used to hearing no... And they just rammed this thing through, which is a bad decision."

He continues, "In the long run, performance is going to be improved by keeping employees happy, and reducing retention and recruitment costs. The research evidence shows quite clearly that for professionals and managers, hybrid is profitable for companies."

Most companies will realise this, says Prithwiraj Choudhury, associate professor of business administration at Harvard Business School. He sees firms that have taken a hard-line on return-to-office as the exception. He believes many companies opposed to remote work will soon change their tunes.

"I think no company in today's world can enforce a policy that is anti-talent," says Choudhury. "It's just not going to work. You're going to feel the pain. You're going to see some of your best people leave. And then there will be a course correction." Even prestigious firms, like JPMorgan Chase, may ultimately not be able to leverage their clout to snag and keep talented staff.

Still, it doesn't mean every organisation will budge, especially as workers have lost some of their power in a tightening job market. Hubris is powerful – and in some cases, it may prevail, even at the expense of employee desire and data-driven logic.

-bbc