News: Office mandates don't help make more money but do reduce employee happiness: Study

Talent Management

Office mandates don't help make more money but do reduce employee happiness: Study

The study showed that having rules about working in the office or not didn't really make a big difference. In terms of money, companies with these rules didn't do much better than those without them.
Office mandates don't help make more money but do reduce employee happiness: Study

Nearly four years after the onset of the coronavirus pandemic prompted a surge in remote work, employers around the globe continue to grapple with the challenge of enticing employees back to the office. The ongoing tug-of-war between employees advocating for flexibility and employers endeavouring to bring workers back has resulted in instances of employee walkouts, corporate ultimatums, and, in some cases, widespread resignations. 

A recent study from the Katz Graduate School of Business at the University of Pittsburgh indicates that while office mandates may not necessarily improve companies' financial performances, they can contribute to reduced job satisfaction and negatively impact work-life balance for employees. 

Mark Ma, co-author of the study and associate professor at the Katz Graduate School of Business, stated, "We will not return to a time when as many people find satisfaction working from the office as they did before the pandemic." 

Furthermore, he emphasised that mandates contribute to reduced employee happiness, subsequently impacting productivity and increasing the likelihood of individuals seeking new employment opportunities. 

The study conducted an analysis on a subset of Standard & Poor’s 500 firms, aiming to investigate the impact of office mandates. This examination included assessing the average change in quarterly results and company stock prices among firms with office mandates, which were then compared to those without such mandates. 

The findings revealed that the presence of mandates did not yield any discernible difference. Financially, firms with mandates did not exhibit any notable improvement compared to their counterparts without mandates.

The sample size for the analysis encompassed 457 firms and 4,455 quarterly observations, spanning the period between June 2019 and January 2023. Information from the US Bureau of Labour Statistics reveals that, despite an increase in the implementation or reinforcement of mandates by various companies over the past year, the overall number of people working from physical office locations has seen minimal change. 

In December 2023, approximately 78 per cent of workers aged 16 and older were engaged in entirely on-site work, a slight decrease from the 81 per cent reported a year earlier. Notably, professions such as tech workers, known for their more flexible work schedules, displayed lower averages, with only 34 per cent exclusively working on-site last month compared to 38 per cent the previous year. 

Prithwiraj Choudhury, a Harvard Business School professor specialising in remote work studies, expressed a universal challenge, stating, "There are compliance issues universally." 

He noted that some companies are resorting to veiled threats related to promotions and salary increases, a situation he deems unfortunate as it involves the talent pool, which is considered the most valuable resource for companies. 

However, despite the challenges and resistance, some companies are steadfast in their commitment to mandates. They actively remind employees and, in certain cases, issue warnings about the potential impact on promotions and job security for those who do not comply. 

According to Ma, leaders are often reluctant to backtrack on mandates once they are implemented, as doing so may be perceived as an acknowledgment of mistakes. 

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Topics: Talent Management, #RemoteWork, #HRTech, #HRCommunity

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