Wharton@Work

March 2025 | 

Back to the Office? The High Stakes of RTO Mandates

Back to the Office? The High Stakes of RTO Mandates

As a new round of return-to-office (RTO) mandates rolls out, one thing is clear: the debate is heating up. Some see RTO as a necessary reset to rebuild collaboration and boost productivity, while others view it as an outdated power move that ignores the realities of modern work.  Even among experts, there’s little consensus. After speaking with three Wharton professors who each bring their own nuances to the discussion, it’s obvious that the complexities of the issue defy simple solutions. In fact, it’s so complex that we’re presenting it in two parts: the case for returning to the office will appear in the April issue.

But while we don’t find easy answers, we do have a better sense of the key trade-offs — productivity versus culture, autonomy versus collaboration, cost savings versus talent retention. By digging deeper into these tensions, we can move beyond the headlines and start focusing on what really matters for companies, employees, and the future of work.

Our experts:

Matthew Bidwell, Xingmei Zhang and Yongge Dai Professor of Management, studies career paths, hiring practices, and how organizations balance internal promotion with external hiring.

Lindsey Cameron, assistant professor of management, examines the gig economy, remote work, and the impact of technology on modern workforce structures.

Peter Cappelli, George W. Taylor Professor of Management and director of Wharton’s Center for Human Resources, researches workplace dynamics, talent management, and the evolving nature of work. He is co-author of the forthcoming In Praise of the Office (UPenn Press, 2025).

Let’s start by defining who is really impacted by the debate. While headlines paint a picture of workers clinging to remote jobs and companies demanding in-person work, the truth is more nuanced. “The perception that ‘everyone’ is working remotely is misleading,” says Professor Cappelli. In the U.S., only 27 percent of employers offer remote work — mostly large firms in major cities. Globally, the numbers vary, with Europe averaging 21 percent and parts of Asia reaching 80 percent.

But while those numbers vary widely, it’s clear from most of the world’s workforce that can perform their jobs remotely that they want that option to remain open. As Professor Cameron notes, “More people see remote work as a right and not a benefit. That's hard because the government, among other employers, is trying to revert from what's become a norm that people deeply cherish. So, it makes sense that we’re seeing a backlash.”

The latest wave of stricter in-office requirements has reignited debates over productivity, retention, and workplace culture. But to Professor Bidwell, those new RTO policies “feel like more continuity than change. Over the past two years there has been this steady drip, drip, drip of corporations with their return-to-office mandates. Tesla was one of the very early ones. Then we had Amazon, the investment banks, and now the federal government. But those mandates are often not well thought out, as they keep hitting obvious barriers, such as a shortage of office space and parking for everyone.”

Cappelli calls those barriers “the big problem that companies don’t want to talk about. Most of them reduced their office space, so they literally can't bring people back five days a week. They no longer have a space for them. A lot of the line managers and the CEO think everybody should come back, but physically it can’t work.”

Freedom, Focus, and Fewer Commutes: The Perks of Remote Work

Aligning with Cameron’s view that many workers now see working from home, even part-time, as a right rather than a privilege, Bidwell says, “I think hybrid and remote are largely here to stay because most employees want it. Things like focused work are much easier to do for many people when they're at home, and there’s more time to do something else when you’re not commuting. RTO mandates take away people's autonomy to decide where and when they work the best.”

He continues, “Companies that insist on bringing people back to the office are going to incur costs from doing so. They're going to have to pay more for their people. An interesting new study suggests that tech workers are willing to accept salaries about 25 percent lower in exchange for hybrid and remote work [two other recent studies come to similar conclusion]. The companies that insist on having everyone in the office every day will have more attrition and will find it harder to attract talent. If you're a very desirable employer, that may be ok. But I think for a lot of other companies, they will look at this balance and say, we want to get good people. Sure, if everybody's in the office every day, that might be a bit better. But the costs don't outweigh the benefits of our being able to get better people cheaper by offering more than what they want.”

He continues, “Whenever I talk with HR executives about it, the conversation goes something like: ‘My CEO wants us all back in the office. My CEO believes that we work better together in the office. But every time we try and hire, the first question the candidates ask is, what's the policy about remote and hybrid work?’ It’s clearly a concern for people looking at jobs.”

But while Bidwell sees the study’s findings as proof that remote work is a highly valued benefit, Cappelli argues that they simply reflect a temporary market adjustment rather than a fundamental shift in worker priorities. “There are a lot of studies about willingness to take a pay cut to work remotely, or get more training, or some other benefit — or that they’ll quit if they don’t get it. I don’t believe any of them are true. The relationship between those who say they're going to quit and those who actually quit is about 8 percent.” He says much of the research on the positive effects of remote work was based on self-reported surveys done early in the pandemic, when “the responses were likely influenced by the limited alternatives: face unemployment or risk exposure to COVID-19 in an office setting.”

He also says prominent studies that show the positive effects from remote work “never pointed out that they only looked at individual contributor jobs. One was patent office attorneys who never worked with anybody else and who were remote even before the pandemic. The other study was on travel agents in China, who also never work with anybody else. So, if you're an individual contributor, it might not matter that much. But we're hearing even from call centers that when people are remote, it takes longer to train them and it's easier to lose them because they've got no ties to anything except the piece of equipment you provided.”

Implications for Employers

The contrasting perspectives are instructive for business leaders grappling with RTO mandates. The percentage of individual contributors in your workforce matters — and managing a permanent remote workforce presents its own challenges. Cappelli points to GitHub, a small tech company that has been completely remote since its founding. “Companies saying they can become remote because GitHub has done it miss that fact, and they also don’t see that GitHub has a 2,000-page slide deck explaining the rules for working in a remote environment.”

While critics of RTO mandates insinuate — or state outright — that they’re really a power play rather than a necessary course correction, the truth is likely somewhere in the middle. Next month, we’ll make the case for returning to the office.