Amazon has eliminated remote work. Is RTO the new normal?

When offices around the world closed due to COVID-19, the shift to remote work was rapid and complete. Homes were quickly remodeled and retrofitted for workspaces and privacy, desks and ring lights were purchased, and everyone learned how to increase their bandwidth and use Zoom. Life and work as we knew it no longer existed – and it was incredibly difficult. But after the chaos subsided and some normality returned, people settled in… and got to work.

In 2024, four years after the first closure, 98 percent of employees say they want the option to work from home at least some of the time.

And for good reasons. By eliminating the commute, people had more time for their family and friends. They could walk their dog or do a load of laundry during their lunch break. You could work in sweatpants. Life was good.

Companies joined in the positive response – and many of them developed more permanent work-from-home policies. As of August 2023, one in five Americans worked remotely.

Now some say that the era of remote work is coming to an end after the pandemic. Amazon recently announced that all company employees will be required to return to the office five days a week starting in January. Goldman Sachs, Boeing, UPS and Tesla also announced full-time return-to-office (RTO) mandates this year.

Several top Fortune 500 CEOs are voicing concerns about culture, productivity and innovation as employees work from home. They say RTO regulations will solve these problems.

But are their claims legitimate or is there something else going on here?

After all the time and energy that has gone into transitioning to remote work – and the benefits of reducing overhead costs and attracting top talent through WFH perks – why are they now choosing to take the course of to reverse popular policy?

And when companies refuse to listen to their employees’ concerns about these policies, what message are they really sending?

CEOs claim that work culture and productivity are suffering.

In a message to employees on September 16, Andy Jassy points to Amazon’s “unique culture” and emphasizes that keeping your culture strong is “not a birthright.” You have to work on it all the time.” He further announces that the company is returning to a pre-COVID policy that requires company employees to report to the office five days a week.

Culture features frequently in these announcements and in criticism of remote work.

Jamie Dimon, CEO of JP Morgan Chase, said: “The Zoom world has major flaws, so it’s difficult to convey culture, character and all of those things.”

Company culture is difficult to build and measure. Anyone who has listened to a Zoom call with speakers muted and connections stuttering can attest to the limitations of online collaboration. It’s also a surmountable challenge – and one that managers can overcome by adequately training their teams in the technologies and processes of remote work.

Jassy says to his employees: “The last 15 months of being back in the office at least three days a week have strengthened our belief in the benefits.”

But it’s hard to believe that the remaining two days at home have really affected the company culture. It seems that when productivity is also a goal, employees can easily connect with teammates on office days and focus on head-down work at home.

There is actually evidence that productivity suffers in fully remote companies, falling by 10% compared to fully on-site companies. But in hybrid environments, where workers have the option to work from home part of the week, there is no impact on productivity and retention rates improve dramatically.

What does Improve productivity in the workplace, regardless of location?

Employee satisfaction.

Research shows that productivity increases by 13% when employees are happy at work. Amazon workers have made their dissatisfaction clear. In a survey commissioned by employees, the new five-day office policy received an average rating of 1.4 on a scale of one to five, with one of them being very dissatisfied.

If CEOs are truly making this decision to improve productivity and profits, they should remember that unhappy, disengaged employees will cost the global economy $8.9 trillion in 2023.

So what are these RTO requirements? Really around?

“Any executive whose teams have ever been scattered in remote offices will tell you that organizational culture has nothing to do with location,” Chris Williams, a leadership consultant and former vice president of human resources at Microsoft, wrote on Linkedin last week. “RTO as a culture change is BS.”

The data seems to be correct.

Research from the University of Pittsburgh shows that RTO orders are more likely to come from companies with poor stock performance. The research found no improvement in stock returns or profitability after implementing these RTO requirements.

Additionally, “we found that return-to-office mandates are more common among male and more influential CEOs,” said Mark Ma, an associate professor of business administration at the University of Pittsburgh, in an interview with NPR.

Unfortunately, these full-time RTO mandates appear to signal a refusal to put employees’ work-life balance above profits – even if there is no evidence that profits will increase when employees are back in the office.

The bigger challenge here seems to be not workplace culture or profits, but trust in the workplace. Do managers trust their employees to do their jobs when they can’t see how many hours a day they sit at their desk? If not, there is an attitude problem – or a management problem.

To build trust, both parties must be willing to listen. And with an overwhelming number of employees expressing frustration with full-time RTO mandates, it’s clear who isn’t.

Losses occur when management does not listen to employees.

Generation Z and Millennials have expressed their desires: They want flexibility. By next year, Millennials will make up 75% of the workforce. If employers want to attract the best people, they have to listen – or lose them and the talent war.

These RTO regulations will harm employees who have reorganized their lives over the past four years of remote work. People have made home and family decisions based on the ability to work remotely. Taking this away in favor of company culture means that work-life balance and employee well-being are not part of that culture.

To retain their best workers, companies must show how they can balance everyone’s interests. If it’s easier for managers to get by in the office but easier for their employees to work from home, hybrid schedules are the obvious answer.

These leading companies that implement inflexible RTO requirements are the exception, not the norm. The era of remote work is not over yet because it still works for so many people.

Leaders who refuse to recognize the importance of employee satisfaction will eventually realize the impact on their bottom line – lost top talent and lost trust. Sales are expensive.

The new era of remote work must accommodate workers at all levels of an organization. If CEOs want to increase innovation, they should translate that creativity into better policies that reflect the broad range of needs and preferences of the people they depend on.