Enforcing return-to-office (RTO) mandates to improve business performance poses significant talent retention challenges for companies, with high-performing employees more likely to quit if those policies come into effect.
New data from business network organisation the British Chambers of Commerce (BCC), found that almost half (48%) of UK businesses expect all working days to be in-person over the next 12 months, and 41% have required staff to spend more time working on site over the past year, as more firms attribute remote and hybrid working to decreased productivity.
“Hybrid working has become a fixture of modern working life since the pandemic and is valued by employers and their workforce,” Jane Gratton, director of public policy at the BCC, said in a news release. “But it does not suit everyone, and for some firms, a full onsite model may be the best solution for the business,” she added.
BCC surveyed nearly 600 businesses between April and May. Ninety-four per cent of firms were small- and medium-size entities (SMEs) with fewer than 250 employees.
But changing how they do business could cost companies their staff. Subsequently, nearly one in ten (9%) of those businesses say staff have quit because of RTO requirements. Employers should consider the talent retention risks stemming from rigid RTO policies, according to research across UK and US markets.
Resistance to RTO mandates has increased since 2022. New UK research shows that employees complying with RTO mandates fell from 54% in 2022 to 42% in 2024; 49% said they would look for a new job offering remote working arrangements and 9% would quit if RTO was mandated.
The Global Institute for Women’s Leadership at King’s College London and King’s Business School analysed data from more than 1 million observations in the Labour Force Survey (LFS) and more than 50,000 observations in the Survey of Working Arrangements and Attitudes UK (SWAA-UK).
Those policies are also disproportionately impacting women, the researchers warned. “RTO mandates can undermine gender diversity, talent retention, and workforce wellbeing, particularly by forcing out workers, often mothers, who cannot comply due to caregiving responsibilities,” the King’s study said.
Similar results in the US last year highlight the importance of flexibility for finance professionals. Women were more likely to leave RTO firms, alongside more senior and more skilled employees, according to research focused on 500 of the largest publicly traded firms in the US (S&P 500). The researchers tracked more than 3 million S&P 500 tech and finance workers’ employment histories reported on LinkedIn.
“Employee turnover rates abnormally increased following RTO mandates. Specifically, the average turnover rate for RTO firms increased by [14%] after RTO mandates.” The S&P 500 study also found that it takes longer for RTO firms to fill new job positions, and they also hire fewer employees following those mandates.
High-performing employees are more likely to seek employment opportunities that promote flexible working, according to a global report from Cisco, a global IT, networking, and cybersecurity solutions company. This report is based on a double-blind survey of 21,513 employers and employees in full-time roles across 21 markets in April.
Organisations offering greater flexibility are attracting better talent, with 50% of high performers working for organisations with mandates of no more than two days per week in the office, compared with 29% of average performers, and 19% of low performers, the report noted. Notably, 63% of all employees surveyed would also choose a reduction in pay to work remotely more often.
“The future of work requires a reinvention, not a return to old ways of work. It must be flexible, inclusive, and designed for the world we live in now, not based on outdated notions of productivity, based on presence or control,” the King’s study said. “This is not a moment to look back, but to boldly adapt.”
Overall, more than one million UK employees have left jobs without flexible working options since January 2024, according to the latest figures from the Chartered Institute of Personnel and Development.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.