| By Olivia Ernst |

Workplace Reentry’s Ripple Effect: How RTO Policies Impact Global Firms

At the start of 2025, several major global companies such as JP Morgan, Amazon, Dell, and AT&T announced full-time, return-to-office (RTO) mandates for their corporate employees. While most RTO mandates following the pandemic only require attendance for a few days of the week, these increasingly common policies seek to fully restore the pre-pandemic in-office work week. For example, a January 2025 survey of 849 companies by Resume Templates found that the number of companies requiring full-time, in-person work is expected to increase from 22% to 27% by the end of 2025.  Many employees who have grown comfortable with the new hybrid work norm are left wondering about the motivation behind these mandates. Explanations and claims vary greatly, suggesting that these labor mandates are driven by a nuanced set of factors.

Some company leaders claim on-site work increases productivity and thus profits. For example, Dell’s RTO mandate for its sales teams emphasized that “data shows that our sales teams are more productive when on-site”. Others believe that on-site work is more optimal for collaboration and teamwork, such as Amazon CEO Andy Jassy, who claims “people riff on top of each other’s ideas better if they’re together.” However, many believe there are other explanations behind these policies, including the concern with utilizing expensive offices, or using RTO mandates to weed out their most dedicated and loyal workers. Research suggests that some businesses base their decisions on the behavior of other firms and governments. Particularly in the United States, the Trump administration’s RTO mandate has also resulted in RTO pushes in other companies. Despite these considerations, there is a lack of consensus among experts regarding what is driving these mandates, and the answer is likely contingent upon individual business needs and preferences.

Economic Impacts of Full-Time RTO Mandates

Though the exact cause of these mandates is ambiguous, it is clear that they have the potential to significantly impact the economy. Specifically, RTO policies may impact consumer behavior and boost local businesses which benefit from foot-traffic during the workday. This includes restaurants, food trucks, bars, and transportation services. Additional services, such as dry cleaning and childcare may also experience more business as these changes are implemented. The urban real-estate market will also likely be impacted. As more employees are required to relocate near their jobs, the demand for housing in cities where many of these companies are based will drive up prices.

RTO mandates may also impact the size and composition of the global labor force. For example, remote work has significantly increased women’s participation in the labor force. If remote/hybrid work is reduced substantially, women’s participation will likely decline due to their prominent role in childcare. In addition, many other individuals who have benefitted from remote work will likely have to leave the labor force. These include workers with disabilities, eldercare responsibilities, and workers near retirement, who tend to face additional constraints with frequent commutes and time spent in the office within a traditional five-day work week.

Are RTO Mandates Feasible in the Long Run? 

Beyond labor force composition, companies may also face retention challenges as workers react to these mandates. Most of the global workforce does not want to return to the traditional work week. A 2023 survey of over 35,000 workers in 34 countries from Working From Home (WFH) Research revealed that workers desire to work remotely more days per week than their employers allow. As a result, RTO mandates have been met with significant resistance, which raises questions regarding whether these mandates are feasible for businesses in the long run. For example, some employees petitioned to form a labor union in response to JP Morgan’s full-time RTO mandate, and nearly 300 employees staged walkouts in response to Amazon’s RTO policies. Stronger labor-protection laws in Europe have posed additional challenges to these companies by providing more bargaining power to employees. For example, employers in the Netherlands must obtain approval from a works council in order to implement RTO mandates.

Research suggests that this resistance is resulting in increased turnover rates, even among large tech and financial firms that typically benefit from higher retention. This is particularly prominent among female employees, according to a November 2024 study on S&P 500 firms. RTO mandates have also been linked to hiring challenges, which result in increased recruitment costs and negative impacts on financial performance. Returning to in-person work may also impact the quality of the company’s applicant pool. By eliminating geographic constraints, remote work can increase the number of qualified applicants for a position, and research has found this to significantly improve company productivity. Re-establishing these barriers means these companies will have to be less selective, as their pool of applicants will be reduced to those willing and able to commute daily.

Temporary Supremacy, Permanent Shifts: Employer Power vs. (Re)United Workers in the Post-Pandemic Dialectic

Employers, however, currently hold more power than workers amid widespread corporate and government layoffs, resulting in more job seekers than there are jobs. With an influx of applicants knocking on their door, these companies (that tend to already be popular among candidates), may feel well-equipped to shoulder the cost of the turnover and hiring challenges that RTO mandates induce. While the negative consequences for companies may not be felt just yet, if the power balance fluctuates in the future and other remote and hybrid options remain widely available, these businesses may be forced to bargain with employees for more flexible work options.

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The images in this article were created using an AI image generator. All illustrations are ©Intelliwings.