Companies likely lose money with more workers in the office. More electricity, more water, more supplies. More unhappy employees, more tired employees, more good employees looking elsewhere for WFH jobs.
this post was submitted on 29 Jan 2024
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Probably sunk cost fallacy with the lease. Building is paid for, why not use it and also be better able to micromanage your drones?
In many cases they don't even own the building!
The leases are often very long term like 5-10 years. So they are locked into paying for the building or risk hurting the company’s credit lines. So in a sense, they have paid for the building use. Which I think was OP’s intent, since they mentioned the lease.
Sure but leaving it empty until the loan expires is still cheaper. My point is, in most cases it's not the company's problem if the building they have their office in loses value because it's empty and no one wants to renew their contract, so why force employees to go back?
You’re right, and you’re pretty much describing the sunk cost fallacy as well.
They probably don’t save much money that way though. You stop have to keep the place warm enough and clean enough to prevent mold and frozen pipes. Many are in bigger buildings with cleaning, maintenance and security contracts.
I suspect as dumb as it is, the moronic managers still think micro-managing makes up for the 5-10% cost of employees there (might even be less in some offices). And as said before, they usually at best break even, while alienating the smarter employees who go find wfh jobs.
Yeah my language was imprecise, thanks for clarifying.
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It's also to do with the fact that most research looks at company profit. But if you follow the paper trails, most of the high level managers that insist on return to office are investors on commercial real state ventures and/or funds that invest in these downtowns and office spaces. It's bad for the company, but it's good for their personal wallets. The authoritarian high is a plus.
Forcing people back to office, firing thousands of tech workers... Yeah I don't see why people don't love working for these guys. Nobody wants to work!
Let's all go to the office for the "collaboration" and team spirit. We are all a family here. :)
The Musk tells people to sleep on the factory floor, that's how much he cares about people.
Amazing how when the argument is coming from the bottom up you have to have evidence, facts, numbers, etc. But when it comes from the top down “just knowing” and “a feeling” is more than enough.
Or how they always ask for feedback from people down the chain only to ignore it when taking decisions!
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Workplaces are tiny fiefdoms where the people who make the goods don't even get a vote.
Its an open secret that middle managers are trying to save their asses.
Every middle manager I know is openly opposed to forced RTO. It’s a huge pain in the ass from a policy enforcement perspective because, in their enthusiasm to make sure people are taking it seriously, they’ve decreased managers’ discretion for attendance. Now employees have to take a sick day if they can’t come in, even if they’re perfectly capable of working from home (eg a software dev with a broken ankle), or else have to jump through multiple hoops with HR.
I actually kind of like my office. It helps that I have an actual office to myself of course, but I do like the ability to put together a quick hallway chat or grab a room with a whiteboard and even just appreciate the higher bandwidth of communication I can get when physically present. But I also want to allow people to work from home if they’re having a TV delivered or if their kid is sick.
The standard, now rote, response from everyone up to the director level is pretty much “I know, it sucks. But it’s policy, and if you don’t do it there’s going to be consequences that I will not be able to handle for you.” They may put a happy spin on things for newsletters, but from where I’m from it’s seen as a legacy from an older culture running at the level of VPs and above who don’t have a direct hand in operations.
Nah. Middle managers would prefer to wfh, too. No one wants to lose 2 hours commuting.
I would rather have my team happy and working well rather than bitching about a crappy commute. I don't enforce the organisation's WFH rules on my team
And also just laziness. It takes more effort in leading a remote team and initiating intentional communication instead of doing the good ol' drive-by management and let communication and coordination up to "your in the same room, you figure it out".
It's much harder to hide corruption when everything is being recorded!
As an anecdote I work in a 20 person team and we hardly have any managers nor meetings. I honestly haven't even seen many of my coworkers I work with daily but we all keep loads of records from boards, to RFCs to traditional docs and wrap that all up with daily stand-ups. We're incredibly productive.
Remote is amazing when done well and I don't see how any CEO could say otherwise with a straight face. It saves so much money that all the "connection" gaps can be easily filled in with team building and workations and other events.
It is the future, well its already the present but many haven't caught up to it yet.
The argument I see in articles is engagement. Remote workers are less likely to give feedback and are less loyal to the company they say.
I'm not sure remote work is responsible for that. There have been enough meetings where everybody in the office just nods along and loyalty went out the window after layoff waves became normal.
Although there is a camaraderie that is easier to build in office that keeps people around a bit longer, office politics also erodes that goodwill.
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It all boils down to the psychology of asscunts lording over us slobs.
Its not about money. It's about power and control. Corpos only care about one thing, and thats power. What good is money if you can't use it to lord over someone?
It's several things.
- They believe people work better when they have team mates around them
- They believe there are synergies from water-cooler conversions
- They believe managers need to see their staff to know they're working
- They believe people in the office are best for teaching new starters
- They believe that since they are paying so much for office space it would be a waste to not use it
Probably more than that.
Some of it's true.
They don't understand what it costs. They don't understand that people resent having to commute to do the same work they could have done at home.
I used to have a manager that would micromanage everyone and come and stand behind you and make comments usually asking why you weren't working on X. X was always something other than what you were doing, he was never happy.
Now he can't do that anymore. Unsurprisingly productivity increases when an overbearing idiot can't stand behind you.
Yeah that's a good answer. A part of the problem is management not understanding that not everyone payroll is an extroverted, type A person. Most folks will actually be more productive if they can fuck off to walk the dog or fold some laundry in the middle of a work day.
I think return to office mandates are silly. Regardless, it's more about maintaining the office market values, right? So basically need to accept that's where things are going and that will inevitably happen.
I'm not an economist, so I don't know the full implications of it all, but I know things will be in for a ride.
I don't know how this property values thing just became accepted knowledge, but it's nonsense. Most companies don't own their own office space, and for the ones that do, it's a cost centre they'd prefer not to have on the books.
I've also seen absolutely no evidence that this is a factor in their decisions, and you'd expect at least one CEO to let the truth slip if this was the case.
And yet people keep parroting it.
Commercial leases are not always a 1 year lease though, like an apartment. They could be in a 10 year lease so I think it's still valid a lot of times. Obviously there are also additional factors but some companies are still stuck paying for a building they can't use.
Sunk cost fallacy. This is not difficult to grasp. The money is gone regardless of whether people are in the building.
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There was an article a while back about how RTO brings profits to stores inside the office buildings - gift shops, restaurants, etc. Externally speaking: oil companies. There is a lot of vampirism involved in RTO that is obvious... and far more that's not.
Iirc a key problem is a lot of these companies used their office space as collateral for loans. They literally cannot afford to have the value of that office space degrade so forcing everyone back into the office seems like the only solution to them.
Nevermind that it's not a sustainable tactic long term but smart business decisions isn't something I expect from companies operating with permanent debt anyway.
Good. Hope all these office mandating companies go out of business. No more of people being forced into these mandatory COVID infection labs just to make a living.
It's about "butts in seats" people.
Big tech companies OWN not rent.
When you OWN an office building, and it is empty, you are LOSING MONEY.
It's about the real estate, nothing else. Open your eyes
How? How are they losing money not having people in the office? Where is this money coming from?
Explain your reasoning.
I disagree that property value is the main driving force behind return to office mandates, but if they do in fact own their offices, then those offices depreciate in value. They also cost money in upkeep. Gardeners, janitors, window cleaners, security, power, maintenance, insurance. Even if nothing is happening, there are contracts with companies that provide these services. Either they'd have an agreed frequency of visits, or a retainer fee. They have managers that want their employees to make on site visits to justify their jobs. The AC and lights would need to be on for anyone onsite, including security, and that is a lot of power. Offices are expensive.
If nothing is getting done in those offices, then those offices are bleeding money. And if they're empty and nobody wants to work (in an office) anymore, then you can't sell them for anything like their old book value. It's a huge loss.
That said, I suspect it's more institutional inertia that drives most of this return to office stuff. Managers justifying their existence or just not being able to cope with the new skills they need. Plus selling or ending leases is a job that someone has to do, and you might fuck that up, so you'd rather not make the change. Plus they've got the offices now, what if they need them soon? Capitalist companies, especially corporations, are fundamentally conservative entities.
If you buy a car and don't use it, you're in much the same situation. You have an expensive thing gaining you no value. At worst that money could be in your savings. I imagine a company could find more productive uses for that capital. (A decent chunk of capital mind you, Google paid about 10% of its annual profit for a pair of offices in 2018.)
Sure, you could sell the car but you're going to take a loss as office vacancy rates are at what I assume are historic highs (in Canada it's about 17%).
The more conspiratorial minded may also point out that most CEO level folks or board members are pretty likely to have a lot of their wealth tied into the market, a not insubstantial sum of which is tied to corporate real estate. A significant disruption there could cost those folks and their friends heavily. It's a little conspiracy minded for me but also not so much so that it feels ludicrous.
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