Why Forced RTO is Corporate America’s Silent Profit Killer
Whether you’re an advocate of full-time in-office work or complete flexibility, we can all agree that decreasing employee engagement is a profit killer. A recent survey by McKinsey reveals the staggering cost of disengagement. A mid-size S&P 500 company risks losing between $228 million and $355 million annually due to low engagement. Over a span of five years, this sums up to a potential loss of $1.1 billion per company.
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The forced RTO mandates in recent months have been a key driver of worker disengagement. Gallup finds in its 2022 assessment of employee engagement that after trending up from 35% to 36% in 2020, employee engagement in the US dropped to 34% in 2021 and 32% in 2022. Gallup’s findings show that employees who work exclusively remote or hybrid both have 37% engagement, compared to those who work exclusively on-site, of whom 29% are engaged. This difference is about the same for those in remote-capable jobs and jobs that are not remote capable, meaning that those who are remote-capable but work fully on-site are drastically less engaged than remote-capable employees with location flexibility.
McKinsey’s data shows the same outcomes. According to McKinsey, the core drivers of disengagement include inadequate compensation, lack of meaningful work, and inflexibility in the workplace. More specifically, employees fall into six distinct categories on the (dis)satisfaction spectrum:
- Thriving Stars: A mere 4% but impactful portion of the workforce, these employees excel in hybrid or remote work setups due to their adaptability and need for autonomy.
- The Majority: Comprising 75% of workers, this group is segmented into the reliable and committed (38%), mildly disengaged (32%), and double-dippers (5%). These employees can become high performers if motivated by meaningful work and a flexible work environment.
- Disruptors: These actively disengaged employees, making up 11% of the workforce.
For both McKinsey and Gallup, the data shows that the recent forced RTO mandates and its accompanying inflexibility drive down worker engagement. No wonder that so many companies have come to regret top-down RTO.
So Can We Get a Quick Fix Here?
Frankly, it’s expensive to fix compensation and difficult to convince people that their jobs are meaningful if they already don’t feel they’re meaningful – two of the three key factors identified by McKinsey. But both McKinsey and Gallup identified offering flexibility as a key differentiator. If that’s the case, should we simply offer remote work for everyone and have that fix the engagement crisis?
It’s not so easy, actually. In fact, even fully flexible companies that allow full-time remote work can struggle with employee engagement.
A thought-provoking survey by Promoleaf provides a magnifying glass to examine the intricate complexities of remote work. The study paints a candid picture: 68% of remote employees feel less connected to their coworkers, 58% believe their contributions are less visible when working remotely, and 39% feel their mental health needs are not adequately met by their organization.
Furthermore, the survey reveals that 47% of remote employees miss informal social interactions, while 42% believe that collaboration and brainstorming with colleagues is more challenging in a remote setup. The data also shows that 36% feel that building relationships with coworkers is more difficult when working remotely.
These statistics illuminate the remote work landscape in stark relief, bringing to light the numerous obstacles that impede employee engagement. However, they also provide valuable insight that can guide organizations to formulate effective strategies to navigate these challenges.
Harnessing the Power of Employee Engagement
Unlocking the potential of employee engagement in remote work is much like solving a Rubik’s Cube. It requires a multifaceted approach, but when tackled effectively, it can catalyze an organizational transformation.
Increase Visibility and Recognition
Imagine creating a virtual gallery where the achievements of remote employees are showcased for all to admire. By leveraging digital platforms to recognize accomplishments, we can ensure that the contributions of the 58% of employees who feel invisible are illuminated and celebrated. Regular virtual town halls, employee spotlight features, and recognition in company newsletters can make employees feel valued and seen.
For example, a mid-sized software development company was grappling with an engagement crisis. The firm noticed a drop in motivation levels and productivity, primarily amongst their remote workers. They hired me to help them address this issue. Upon investigation, we realized that 60% of their remote employees felt their contributions went unnoticed. In response, we implemented a digital recognition platform to highlight the accomplishments of their employees. Subsequently, they reported a significant uptick in employee satisfaction and productivity levels, proving that recognition can turn the tide on engagement issues.
Build a Strong Community
The Promoleaf survey emphasizes the importance of fostering a sense of community among remote workers. Think of it as constructing a virtual community center, complete with spaces for casual chats, online team-building activities, and opportunities for relationship-building. Implementing virtual coffee breaks, shared online hobbies, or even remote volunteer activities can help to dissolve the sense of isolation felt by 68% of remote workers and build a stronger sense of camaraderie.
A regional insurance company with a substantial remote workforce found its employees feeling isolated and disconnected. After consulting with me, the company responded by initiating regular virtual social events, such as online game nights and coffee breaks. This intervention fostered a stronger sense of community, dramatically reducing feelings of isolation among remote workers and boosting morale.
Provide Mental Health Support
It’s highly concerning that 39% of remote employees feel their mental health needs are overlooked. By offering mental health resources such as wellness programs, virtual therapy options, and promoting a culture that prioritizes wellbeing, we can cultivate an environment that truly supports employees’ holistic health.
A professional services firm with around 100 staff, mostly remote, noticed a decline in overall performance. They asked me to help out, and we discovered that a significant portion of their remote employees felt that their mental health needs were neglected. The company decided to provide mental health support services and wellness programs. As a result, they saw an improvement in their employees’ wellbeing and work output.
Facilitate Collaborative Opportunities
The fact that 42% of employees find collaboration more challenging in a remote setup calls for innovative solutions. Think of it as organizing a virtual ideation lab where employees can brainstorm, innovate, and work together. Providing collaborative tools, conducting regular brainstorming sessions, and encouraging open communication can help bridge this gap and foster a more collaborative work culture.
A large financial services company was facing challenges with team collaboration in the remote work setup. To address this, they hired me to provide training in remote collaboration, and I introduced a suite of collaborative tools and techniques for remote work. This move helped to foster a more collaborative culture, enhancing productivity and innovation.
Conclusion
As McKinsey and Gallup make clear, offering substantial flexibility is a sine qua non for employee engagement. Yet while necessary, it’s not sufficient and won’t offer a simple quick fix.
We need to address the other tangible barriers to employee engagement: boost recognition, build community, improve mental health, and facilitate collaboration. All of these elements add up to that mystical culture that many leaders want to protect by returning to the office. Of course, such a return – when done in a top-down, forced manner – undermines culture by destroying employee engagement. By contrast, using evidence-driven techniques to solve the tangible problems of employee engagement in a flexible setting offers a fruitful path to cultivating culture and boosting employee engagement at the same time.
Key Take-Away
Forced RTO undermines employee engagement, but the damage can be repaired through flexible work that offers opportunities for recognition, community, mental health support, and collaboration. Share on XImage credit: Moose Photos/pexels
Dr. Gleb Tsipursky was lauded as “Office Whisperer” and “Hybrid Expert” by The New York Times for helping leaders use hybrid work to improve retention and productivity while cutting costs. He serves as the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts. Dr. Gleb wrote the first book on returning to the office and leading hybrid teams after the pandemic, his best-seller Returning to the Office and Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage (Intentional Insights, 2021). He authored seven books in total, and is best know for his global bestseller, Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters (Career Press, 2019). His cutting-edge thought leadership was featured in over 650 articles and 550 interviews in Harvard Business Review, Forbes, Inc. Magazine, USA Today, CBS News, Fox News, Time, Business Insider, Fortune, and elsewhere. His writing was translated into Chinese, Korean, German, Russian, Polish, Spanish, French, and other languages. His expertise comes from over 20 years of consulting, coaching, and speaking and training for Fortune 500 companies from Aflac to Xerox. It also comes from over 15 years in academia as a behavioral scientist, with 8 years as a lecturer at UNC-Chapel Hill and 7 years as a professor at Ohio State. A proud Ukrainian American, Dr. Gleb lives in Columbus, Ohio. In his free time, he makes sure to spend abundant quality time with his wife to avoid his personal life turning into a disaster. Contact him at Gleb[at]DisasterAvoidanceExperts[dot]com, follow him on LinkedIn @dr-gleb-tsipursky, Twitter @gleb_tsipursky, Instagram @dr_gleb_tsipursky, Facebook @DrGlebTsipursky, Medium @dr_gleb_tsipursky, YouTube, and RSS, and get a free copy of the Assessment on Dangerous Judgment Errors in the Workplace by signing up for the free Wise Decision Maker Course at https://disasteravoidanceexperts.com/newsletter/.