Amazon’s RTO mandate likely to boomerang, other companies ‘should not follow suit’

Beginning with the new year, Amazon CEO Andy Jassy wants his employees back in the office five days a week, returning to an office routine that was common before the COVID-19 pandemic upended the workplace.

The backlash from employees was nearly instantaneous, as they berated Jassy — and the return-to-work policy — and vowed to quit. Others demanded raises in exchange for in-office work requirements.

Industry analysts were not surprised by the reaction, and said back-to-office mandates more often than not have the exact opposite effect as intended.

According to the employee memo released this week, Jassy believes being back in the office will help boost employee training, bolster collaboration, and strengthen culture.

“If anything, the last 15 months we’ve been back in the office at least three days a week has strengthened our conviction about the benefits,” Jassy wrote. “We understand that some of our teammates may have set up their personal lives in such a way that returning to the office consistently five days per week will require some adjustments. To help ensure a smooth transition, we’re going to make this new expectation active on January 2, 2025.”

In fact, a study performed in May indicated mandatory return-to-office (RTO) policies could lead to higher quit rates compared with companies that allow remote or hybrid work. The study by the University of Michigan and University of Chicago found that three large US tech companies — Microsoft, Apple and SpaceX — saw substantially increased attrition, particularly among more senior personnel, when they implemented strict return-to-work policies in the wake of the COVID-19 pandemic.

Forcing employees to quit, however, might be exactly what Amazon wants, according to J. P. Gownder, a vice president analyst with Forrester Research. “There is a chance that Amazon is hoping to induce a level of voluntary attrition with this move in lieu of layoffs. Unfortunately, the best talent often has choices, and most don’t want to work in an office five days a week,” Gownder said.

In his memo, Jassy also outlined a plan to reduce managers, saying that “will remove layers and flatten organizations more than they are today. If we do this work well, it will increase our teammates’ ability to move fast, clarify and invigorate their sense of ownership,” he wrote.

Amazon’s mandate puts the company in the minority, according to recent research. Among employees with jobs that can be done remotely, 43% work hybrid, 22% work fully remote, and 35% work in the office full time.

“Amazon’s decision may just compromise its promise to be ‘Earth’s best employer,’” said Gownder. “The macro data shows that pre-pandemic nostalgia is not a post-pandemic reality. Other companies should not follow suit.”

Abandoning hybrid work policies will negatively affect employee experience — particularly recruiting, retention, and diversity — impacting productivity and, potentially, the bottom line, according to Gownder.

Flexible hybrid work policies are the gold standard, research has shown. According to a Stanford University study, only 17.6% of employees who can work from home say they want to work in an office five days a week.

A June study by McKinsey & Co. showed organizations where employees work in multiple locations (at home, in the office, or at client sites) are more likely to see 10% or greater revenue growth than companies where employees work from a single location.

Another McKinsey study revealed that employees consistently point to greater productivity and reduced burnout as primary benefits of flexible work policies. Flexibility is especially important to women, who report having more focused time to work when working remotely, the study showed.

Across industries, employees are also doing the bare minimum to meet in-office mandates. For example, some are simply showing up long enough to get credit for being there before returning home to work — a practice known as “coffee badging.”

To determine what stops people from coming into the office, workplace management software maker Robin Powered surveyed nearly 600 full-time employees at companies that had flexible work policies. The survey revealed that while RTO mandates are everywhere, they aren’t sticking. Forty-five percent of those surveyed said their company’s mandates required them to be in the office at least four days a week, yet only 24% adhered to the policy.

In fact, 46% of respondents said that the reason they don’t come into the office is because they believe they are more productive with their at-home work setup. They frequently cited feeling more productive at home (71%) and not having the right resources at their desk (76%).

Amazon’s planned move to five days a week flies in the face of a positive employee experience, according to Gownder. “Consistently, studies show that hybrid [work] drives higher levels of employee productivity,” Gownder said. “Offices have their own distractions, plus onerous commutes. Employees do best at individual level work when they can customize their environments and schedules.

Employee experience, Gownder pointed out, is a central driver of productivity, employee retention, and business results. “And when employees feel valued, have purpose, possess a degree of autonomy, and feel trusted, they perform better,” he said.

“Offices, by comparison, are great for collaborative exercises that involve brainstorming, team bonding, and certain types of decision-making,” he said. “However, these collaborations can usually be accomplished in a couple of days per week.”