Senior executives are walking out after being told to return to the office. Photo: Shutterstock

Senior executives are walking out after being told to return to the office. Photo: Shutterstock

Companies that plough ahead with return-to-office mandates risk losing key senior executives to rivals offering more flexible conditions, according to new studies.

After workers around the world switched to remote and flexible work during the COVID-19 pandemic in recent years, there has been a wealth of research into the benefits of doing this in terms of health and productivity, and the willingness of junior employees to leave their current job if they are forced to return to the office.

A new study by Gartner has found that more senior executives are feeling the same way about return-to-office mandates, and Australian companies risk a leadership vacuum if they continue to implement these mandates.

separate study from the US has backed up these findings, revealing that major tech companies that forced employees to return to the office lost a significant number of senior managers to rival companies that stuck with remote and flexible work.

The Gartner survey of 3,500 employees found that a third of executives who’d been given a return-to-office mandate said they would leave their current employer because of this. This was even higher than the same answer for non-executive respondents, with 19 per cent of people saying they would leave their current role due to a lack of flexibility.

Tide turning against the office

Gartner director of HR Advisory Neal Woolrich said that the tide is turning against these return-to-office mandates, even among more senior employees.

“What we’ve seen over the last year and a bit has been senior executives being willing to tow the company line – they’ve been told to come to the office and to bring their people back,” Woolrich told Information Age.

“Now we’re seeing this bump up against reality.

“Those senior executives themselves are starting to question this, and they’re seeing the personal impact on their team members as well.”

Of the executives facing being forced to return to the office, just under 60 per cent said their company had provided a convincing reason for this mandate, and just 6 per cent said they had not.

But despite this, 33 per cent of executives agreed or strongly agreed that they would leave their current job because of being pushed back to the office.

Many are already following through with this threat too, the Gartner research found.

Of senior managers surveyed who are actively looking for a new role, 36 per cent said a return-to-office mandate was a factor influencing this decision, while a third of senior management job candidates said they decided to not go for a new position because the organisation they were applying for had asked workers to return to the office.

Woolrich said these results may finally communicate to Australian employers the dangers associated with blanket return-to-office mandates.

“The fact that their peers or senior executives around them are starting to question return-to-office mandates may go some way to opening up leaders’ eyes about the risks around these mandates,” he said.

“The data hasn’t worked on them but maybe the influence of peers and people close to them in the leadership team may work.”

Tech firms losing employees to rivals

A separate report by researchers from the University of Chicago and University of Michigan found that three of the largest tech firms in the world experienced major staff turnover due to their insistence on workers returning to physical offices.

The study found that there was a strong correlation between senior employees leaving SpaceX, Microsoft and Apple following the implementation of mandates, and that many of these workers went straight to work for tech rivals.

The report found that SpaceX, which forced its workers back to the office full-time, had a 15 per cent decline in top talent.

Microsoft and Apple, which adopted hybrid working models, experienced turnover of 5 per cent and 4 per cent respectively.

Woolrich said that some of a company’s most valuable employees may be most likely to jump ship if they are forced into the office full-time.

“High-performing talent has quite often been the first ones to leave or the most likely to leave,” he said.

“Those rival employers who can provide flexibility that others aren’t, they’re likely to be able to attract the best talent.

“And high performers and senior executives are willing to accept a pay cut to have flexible work.”

Companies that do want to bring workers back into the office need to ensure they are offering something that is unique to the working from home experience, he said.

“It has to be different work, and complementary to what they’re doing at home, not the same things they could be doing at home,” Woolrich said.

This article was first published in ACS InformationAge.