The Boss May Not Like It. But Millions of Workers Aren’t Coming Back to the Office.

While senior co-workers have bought houses near the new office, it isn’t an affordable area for young professionals like her. “It’s hard to even find an apartment, and they are all very pricey,” she says.

Millions of workers like Li who went remote during the pandemic aren’t interested in returning to the office. They like the flexibility of remote work, and they don’t miss commuting. Many bosses, meanwhile, are pushing for a return to the office, citing better teamwork, productivity and innovation. 

A tight labor market has emboldened workers who want to keep working remotely. But employers are beginning to take a tougher stance.

Tech giant

Apple

recently asked employees to work from the office on Tuesday, Thursday, and a third day picked by individual teams. In response, an advocacy group formed by employees started a petition, demanding more flexible work arrangements.

“This uniform mandate from senior leadership does not consider the unique demands of each job role nor the diversity of individuals,” the group wrote. Nearly 1,000 Apple employees have signed the petition. Apple didn’t respond to a request for comment.

Since the pandemic threat dwindled, travelers are hopping onto flights again and shoppers are returning to the malls. But workers aren’t going back to their offices at the same rate. 

Across the top 10 cities in the nation, the occupancy rate of office buildings was only 43% recently, according to security firm Kastle Systems that tracks card swipes as a barometer. Before the pandemic, the rate was 99%.

CEOs have been vocal about their unhappiness. “If you can go to a restaurant in New York City, you can come into the office,”

Morgan Stanley

chief James Gorman said last year. People who want to work from home are in “Jobland,” he said, and they need to be back in the office in “Careerland” to be around colleagues and develop skills.

Earlier this year,

Tesla

CEO Elon Musk told workers to spend a minimum of 40 hours in the office a week. “If you don’t show up, we will assume you have resigned,” the billionaire wrote in an email to employees, noting that “phoning in” isn’t enough to create and manufacture “the most exciting and meaningful products of any company on Earth.”

An August survey from the New York Federal Reserve found that 30% of executives reported lower productivity from employees after their firms expanded remote work; half reported no change. Surveys of workers, in contrast, tend to report higher productivity working from home.

Li, for one, says she feels no difference. “Even in the office, we sit apart from each other and often use messages and emails to communicate anyways.”

According to a survey conducted by Morning Consult, six in 10 employed adults say they’re more likely to apply for a job with a remote work option. Some 40% said that they would rather quit their job than return to an office full-time, another survey from videoconferencing start-up mmhmm finds.

The current strong job market has given workers leverage to keep working at home, even when their employer tells them to come in. According to a recent survey from WFH Research, 35% of workers said there had been no consequence when they work in the office fewer days than expected; only 19% received verbal reprimand.

That will likely change if the economy cools down. Already, the number of job openings decreased 10% from March to June. In recent weeks, more firms have paused hiring or announced layoffs. 

Nicholas Bloom, an economics professor at Stanford University, doesn’t think companies will significantly change their work-from-home policies due to recession, but he expects them to better enforce those policies. “Those that are refusing to return at all will be pushed harder into line,” he says. 

“Employers have been trying to gently nudge people back to the office, but they are concerned about attrition and thus don’t want to be too heavy-handed in their rhetoric,” says Scott Homa, senior director of office research at real estate services firm

JLL
,
“If that leverage starts to shift and companies aren’t as concerned about the labor shortage, they will be more aggressive this fall.”

But a recession might also make companies reconsider if the office is truly necessary. For many employers, office rent is the largest expense after labor. In a tough economy, allowing more people to work from home and shaving rent costs could be an appealing option. 

As their previous leases expired during the pandemic, many companies negotiated short-term extensions of only a year or two due to high levels of business uncertainties, says JLL’s Homa. Before the pandemic, the typical renewal term was between five to 10 years. 

This means there is a high volume of office space set to expire in 2022 and 2023—about 28% above the trailing three-year average before the pandemic. 

If a recession hits, some of those leases might not be renewed.

Twitter
,
for example, is planning to decrease its presence in some cities and even close some offices to cut costs. “We’ve proven we can operate our business successfully with a distributed workforce over the years,” wrote a spokesperson in an email to Barron’s.

Still, the tug of war will continue. Musk, who agreed to acquire Twitter before attempting to back out of the deal, has made it clear that he prefers in-person work at the social media company if he ends up buying it.

Ultimately, the question is worker productivity. If remote workers can show that they are working hard and efficiently, while saving the company some operational costs, bosses will reconsider their strategies.

Write to Evie Liu at [email protected]