Return to office (RTO) mandates can spark a brain drain at companies, according to a new study — and the turnover is highest among women and more senior, skilled employees.
The last year has seen high-profile companies such as Amazon end hybrid working in favour of a full return to the office, sparking a backlash from employees.
But research led by the University of Pittsburgh suggests brain drain is one significant cost of RTO mandates — and it’s the best staff who are departing.
The researchers tracked three million employment histories across tech and finance on LinkedIn, comparing that data from 54 tech and finance companies and their RTO mandates.
They found that the average turnover rate increased by 14% after an RTO mandate, but noted that the tech and financial firms tend to have a lower churn because of their higher pay rates, so other industries may see even more disruption.
“We find that these firms experience abnormally high employee turnover following RTO mandates,” the research paper explained.
“The increase in turnover rates is more pronounced for female employees, more senior employees, and more skilled employees.”
The research suggested female employees were more likely to quit following an RTO mandate because of family responsibilities, while more senior or highly skilled staff have more connections and therefore can find a new role more easily.
RTO mandates cause recruitment chaos
Beyond sparking staff churn, RTO mandates make filling those positions harder in the future, the study warned, with many organizations taking “significantly longer” to fill vacancies after a return-to-office policy has been implemented.
“These results are consistent with firms losing their best talent and female employees and facing greater difficulties with talent attraction after RTO mandates,” the study said.
The researchers said that RTO firms take 23% longer to fill roles after a mandate, and their hire rate decreases by 17% — both of which will be associated with higher costs.
“Taken together, our findings suggest that firms lose their best talent after RTO mandates and face significant difficulties replacing them,” the researchers said.
Downsides and benefits
Some companies are enforcing RTO mandates as a form of stealth layoffs, encouraging people to quit rather than pay for redundancies.
Elon Musk has said this out loud, for example, saying looming RTO mandates for US federal employees are designed to encourage staff to quit.
This research suggests companies will see increased turnover following an RTO. On the other hand, companies that support flexibility through hybrid working may find it easier to hire women and those with more skills and seniority, while also benefiting from the other positive impacts of letting employees choose where they work.
“Together, our evidence suggests that RTO mandates are costly to firms and have serious negative effects on the workforce,” the researchers added.
“These turnovers could potentially have short-term and long-term effects on operation, innovation, employee morale, and organizational culture.”
The research echoes a similar study from this summer that employees offered choice and agency where they work were three times more likely to want to stay with an organization and have a healthy work environment.
