Many CEOs are looking to ditch remote work and bring employees back to the office full-time. A recent survey by KPMG US shows a significant shift in sentiment, with nearly 80% of CEOs expecting workers back in their desks within three years. This is a big jump from a previous survey where only a third anticipated a full return.
Why the Shift? CEOs like Paul Knopp, chair and CEO at KPMG US, believe face-to-face interaction fosters better development and mentoring for employees. However, Knopp acknowledges that widespread action hasn't necessarily followed this sentiment. He suggests offices may see a return to pre-pandemic levels of occupancy, but with more flexibility for workers - like later start times or fewer evening hours.
Hybrid Work: A Balancing Act: The survey suggests hybrid work, splitting time between home and office, might be on its way out. Knopp highlights the challenge of managing such a setup, as there's no one-size-fits-all approach. Young professionals might desire in-office time, while working parents may prioritize remote work. This could lead to employee turnover.
The Talent Retention Risk: Stanford economist Nicholas Bloom's research found companies demanding more in-person presence could lose valuable workers. When Trip.com reduced its in-office requirement, the employee quit rate dropped significantly. Bloom emphasizes that top performers often have the best options elsewhere.
Beyond the Office: Preparing for the AI Future: The survey also reveals CEO concerns about an aging workforce and the impact on talent acquisition. Additionally, the rise of Generative AI (GenAI) is seen as requiring continuous skills development for employees. While some fear job losses due to AI, most CEOs view it as a tool for boosting efficiency, training workers, and driving innovation. Investment in AI is a top priority for many, particularly in areas like IT, sales, and finance.
While CEOs are eager to see employees back in the office, the future of work remains uncertain. Balancing flexibility with in-person interaction and preparing for the impact of AI will be key challenges for companies and workers alike.
Amazon's hard-core move to push employees back into the office five days a week is a signal that — in the tech sector at least — employers have regained some leverage over workers.
The labor market has weakened. The rank-and-file mostly don't want to be in the office for a full work week — but in a looser labor market, their opinions matter less.
- Currently, Amazon employees are expected to go in for three days.
Zoom in: The tech sector has been through a lot of layoffs over the past few years. It's not as easy to find a new job, leaving many feeling stuck.
- "The power has shifted back towards companies, which is what emboldens them to take hard-line stances like [Amazon's]," says Erin Grau, cofounder of Charter, a future of work media company.
- In other sectors, such as manufacturing, the labor market is still pretty tight — and workers have some leverage. Boeing workers, for example, felt confident enough that they went out on strike last week.
- Still, overall, the tech industry has the highest share of employees working remotely. If things tighten up, it'll just bring the sector in line with others.
Amazon's change, which starts in January, sets a new standard and may give companies cover to restrict work-from-home a bit more — while still looking generous, says Brian Elliott, a former executive at Slack who is now a work consultant.
- "Two days in office becomes three. And three days becomes four," he says. Companies can make these moves and say: "We're not as bad as Amazon though."
- Other employers won't change a thing — and instead could use Amazon's move as a recruiting opportunity. Microsoft's hybrid work policy just became even more enticing to top tech talent, says Elliott.
Amazon might change things at the margin in the tech sector, but that doesn't mean we're headed back to a fully in-office world, academics and consultants who watch this trend closely tell Axios.
- The share of U.S. workers in hybrid arrangements has remained relatively steady since early 2023, per data from WFH research, a monthly survey run University of Chicago, ITAM, MIT, and Stanford University.
Four years out from the radical upheaval of the pandemic, most companies have settled into a new set-up and wouldn't want to go back. They also have internal research showing that employees are happier with hybrid work.
- "I think we are firmly in the hybrid era," says Prithwiraj Choudhury, a professor at Harvard Business School.
Amazon is the most prominent tech company to go back to five days a week in office. And that shouldn't come as a shock.
- CEO Andy Jassy has been gunning for in-office work for more than a year. In the memo this week, he says being in the office is a way to "strengthen our culture."
- And that culture has long been known for its intensity.
- The company doesn't mean "culture" as belonging and inclusiveness, says Elliott. "What they mean is: are you in it to win it and are you fully dedicated to the company?"
Experts say some workers will quit because of the policy change. A lot of workers can't be that hardcore.
- Working parents — mothers in particular — were already in a rough spot when Amazon put a three-day mandate in place last year, as Bloomberg reported.
- "I'm most concerned about diversity," says Grau. "We know who prefers to, and can, work full-time in the office. They're more likely to be white men without primary caregiving responsibilities."
- "Not everyone will leave, but some of the best performers are at risk," says Choudhury. "Especially women and minorities.
Even after employees were called back to the office for three days a week, Amazon maintained its diversity levels, spokesman Brad Glasser told Axios, pointing to its workforce data.
Keep an eye on the economy. In a downturn, the pendulum will swing back even further in employers' favor.