Amazon’s RTO mandate won’t pay off in the way the company hopes

Amazon workers protested the company’s return-to-office policies in 2023 outside the Seattle headquarters.

Sorry, Amazon employees. Your home office might soon start gathering dust.

CEO Andy Jassy announced on Monday that starting next year, Amazon employees must be in the office five days a week.

Some CEOs might be tempted to exert that same level of control.

Yet, experts caution that the cost of calling remote or hybrid workers back to their cubicles five days a week could be high enough in terms of morale and retention that bosses should tread carefully.

Just look at what’s already happening inside Amazon, where angry workers are looking for ways to leave or not comply.

“What ever happened to ‘Striving to be Earth’s Best Employer,” one employee wrote in a company Slack channel focused on RTO issues, as B-17 previously reported. The comment was a reference to the company’s leadership principles.

Amazon’s announcement comes after 15 months of hybrid work — employees had to be in three times a week. It’s the latest sign that employers are retaking power, even if it doesn’t always benefit them.

Some employers like Amazon are looking to take back power

In the pandemic era, the labor market favored office workers. Employees were swept up in the Great Resignation, job-hopping to get the most money and perks, while many employers struggled to fill open positions. Fearful of losing top talent, companies kept flexible work options to win over applicants and retain employees.

But in recent years, companies like Goldman Sachs and JPMorgan have required some or all of their employees to come in five days a week.

“There is a sense that the talent market is cooling off, and they might not be at risk of people leaving because they have fewer options,” Caitlin Duffy, a research director in the Gartner HR practice, told B-17.

That might not be the case, though. Several experts agreed that returning to the office five times a week is a bad idea.

“There is a mythology of the on-site work experience that leaders believe in and hold onto that isn’t supported by the data,” Duffy said.

She pointed to Gartner’s research that showed organizations saw no performance gains once they made workers come back, and such mandates can cause other problems. Oftentimes, introverted employees work better outside the office, and some people find that the pressure of in-person work can stifle productivity and deep thinking, Duffy said.

Another area that often suffers is morale.

Julia Hobsbawm, who runs the consultancy Workathon and whose latest book is “Working Assumptions,” told B-17 that Amazon’s decision is a sign that corporate America is in a management crisis in which bosses don’t trust their management skills — or their workers.

That antipathy from some bosses is why, she said, desk workers and blue-collar workers have never been closer regarding feeling exploited and exhausted.

“They’re now treating white-collar workers like factory-floor workers,” Hobsbawm said, referring to Amazon’s decision.

Amazon’s Jassy said the decision is intended, in part, to boost innovation and the company’s culture.

“Before the pandemic, it was not a given that folks could work remotely two days a week, and that will also be true moving forward— our expectation is that people will be in the office outside of extenuating circumstances,” Jassy wrote in the announcement.

He didn’t address retention, though he did say he’d like to see fewer managers to help speed decision-making.

Sluggish hiring in tech since the pandemic boom could mean that more workers will line up to join Amazon, even with a requirement to spend five days in the office.

More Amazon workers could quit

Stanford economist Nicholas Bloom, who’s conducted research on remote work, told B-17 in an email that Amazon’s decision could result in a 20% to 30% spike in its employees quitting.

Research from Gartner shows that requiring workers to be in the office resulted in decreased intention to stay at a company, especially among high-performing employees.

Bloom also noted that Amazon’s move is the opposite of what’s been found to encourage workers to stay. He pointed to research he and several collaborators had done that was published in June in the journal Nature. It found that when the travel company Trip.com rolled back its office requirement to three days from five, the company saw quit rates drop by about one-third. Bloom added that workers value hybrid work setups about the same as an 8% pay hike.

That said, getting workers to quit could be part of the point, he said, referring to Jassy’s memo mentioning wanting thinner management ranks.

“The problem with this is often the best employees leave as they have the best outside options,” Bloom wrote.

Already, it appears that Amazon has seen more fully remote workers depart the company compared with those located close to a corporate hub. According to Live Data Technologies, a provider of real-time employment data, Amazon has seen a more dramatic outflow of employees who are not in a location that would be workable for an RTO mandate.

The biggest beneficiaries may be Gen Z

There is one group, in particular, who might benefit from being in the office more — and who are often up for it: younger employees.

Deborah McGee, president and CEO of PZI Group, a consultancy focused on human resources outsourcing, told B-17 that being back in the office is particularly beneficial for younger workers who lost out on mentoring opportunities because the pandemic forced remote work. She said that in her own career in consulting, being in the right place often made a big difference.

“Business happens in the hallways,” McGee said. “Business happens in the parking lots. Business happens after hours. It doesn’t always happen when you’re trying to ping someone remotely.”

The office is often where you get noticed, learn by observing, and meet your mentors. In fact, Gen Z was the only demographic in Gartner’s research that did not see a decrease in intent to stay in response to on-site mandates.

“They’re missing out on it because they’re not having those normal day-to-day type conversations and storytelling that happens from an older generation to the next generation,” McGee said.

Whether it helps or hurts in the long run, there is some irony in the fact that Amazon is calling workers back to the office when the company’s massive cloud-computing business is part of what underpins the ability of many desk workers to do their jobs from anywhere, Hobsbawm said.

“They regard all of their workers as if they were human robots that they can just instruct. And unfortunately, that won’t work,” she said. “And it won’t work partly because of the very technology that companies like Amazon have ushered in.”