Since 2021, U.S. business sector productivity has experienced its sharpest decline on record, according to the Bureau of Labor Statistics. Now that the results are in and employers have that data, we’re seeing them make changes to increase productivity, including bringing employees back to the office. Many businesses have concluded that returning to in-office work is needed to increase efficiency and grow their bottom lines. Although these changes won’t bring every employee back to the office overnight, they will probably accelerate the return-to-office trend that’s been occurring since the end of the pandemic.
Companies aren’t delaying their return-to-office plans. Businesses nationwide rolled out stricter office mandates affecting over 500,000 employees in the first two weeks of May, according to JLL, a commercial real estate brokerage. That’s 22 percent higher than the number of employees impacted by office mandates between January and April, JLL reported last month. Although we can see the return-to-office trend in action, it will take some time — perhaps a couple of years — to return to what we would call the “new normal.”
Google’s email to employees last week outlining the tech company's plan to double down on office attendance is perhaps the most consequential example of how the tech sector has changed its tune on remote-friendly work policies. Google, whose 36,000-person workforce in Silicon Valley exceeds the populations of Menlo Park and Los Gatos, is widely considered a trendsetter in the tech industry and local economy. When Google changes its work policies, don’t be surprised if smaller and mid-sized companies across Silicon Valley do the same. From my experience, when Google talks, other companies listen.
Google also said it would start incorporating employees’ adherence to the company’s three-days-in-the-office-mandate into performance reviews, showing how much the company associates productivity with being in the office.
“Of course, not everyone believes in ‘magical hallway conversations,’ but there’s no question that working together in the same room makes a positive difference,” Google’s chief people officer Fiona Cicconi wrote in an email to employees last week, as reported by CNBC. “For those who are remote and who live near a Google office, we hope you’ll consider switching to a hybrid work schedule. Our offices are where you’ll be most connected to Google’s community.”
Google is only the latest large U.S. employer to partially or fully reverse remote-friendly work policies enacted early in the pandemic. Apple, which last year required all employees to work from the office three days a week, is tracking employee attendance through badge records and will give them “escalating” warnings if they don’t abide by that mandate, Business Insider reported in March. Amazon required its employees to return to at least three days of in-office work on May 1 after experimenting with fully remote, various hybrid, and full-time office models.
Amazon CEO Andy Jassy told employees in February that these models showed it's easier to “learn, model, practice, and strengthen our culture when we're in the office together most of the time and surrounded by our colleagues." Blackrock, the world’s largest asset manager, said it would increase in-office attendance requirements later this year to four days from three.
Not everyone has taken the stricter office mandates in stride; the Alphabet Workers Union — representing a relatively small, unidentified number of employees for Google’s parent, according to the Wall Street Journal — claimed that Google employees haven’t let their performance slip while taking advantage of flexible work arrangements.
However, those who’ve reviewed the latest U.S. worker productivity data may not buy the union’s assertion. The U.S. has had five consecutive quarters of year-over-year declines in productivity, according to an analysis of federal Bureau of Labor Statistics data by consulting firm EY-Parthenon.
Although the total amount of hours worked by U.S. employees increased by three percent from the fourth quarter of 2022 to the end of March, output grew just 0.2 percent. People are working longer hours and barely putting out more products, and you can’t cite time spent commuting to and from work as a reason since many employees are on hybrid or remote-first work schedules. I speculate that when people work from home, they’re not always working because if they were, the country’s productivity levels would be higher. Instead, they watch their kids, do their laundry, and maybe even binge-watch Netflix.
Businesses have spent much of the past three years searching for the right balance between pushing hard on office requirements and not alienating employees, who have generally had the upper hand in negotiating flexible work arrangements. Yet America is a capitalist society where productivity matters. And when the data says that business sector productivity nationwide has experienced its sharpest two-year drop ever, it’s clear whether a company’s survival will hinge on doing everything it can to increase productivity — including bringing its workers back to the office.
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