Could IBM's Return To Office 'Or Else' Be Code For Poor Performance?

IBM IBM has become the latest company in the U.S. to issue a stern return to the office (RTO) mandate to its managers — move near an office or leave the company.

Many — not just IBM workers — thought work-from-home (WFH) policies were here to stay following the COVID-19 pandemic, prompting migrations out of city centers and into larger, cheaper properties in the suburbs or countryside.

But now bosses are increasingly insisting that staff must make a return to their office desks.

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Who’s Demanding The Returns?

IBM vice president John Grainger wrote to managers saying that those working remotely should report to an office or client location at least three days a week “regardless of current work location status.”

Bank of America Corp BAC had also been insistent recently, threatening its workers with disciplinary action if they didn’t comply with its RTO mandate within two weeks.

So what constituted the difference between companies such as Nvidia Corp NVDA and Airbnb ABNB which have stuck by their WFH policies, and those such as IBM and BofA, which are becoming more forceful in their demands for workers’ presence in the office?

Research published by the University of Pittsburgh in December suggested managers feel working from home reduces their staff’s productivity and hurts the company’s financial performance.

In some cases, this attitude has prompted opposition. In May, after Amazon.com, Inc. AMZN issued an RTO mandate for its workers to come into the office at least three days a week or risk not getting promotions, more than 5,000 employees signed a petition against the mandate.

Reasons For Requiring RTO

The Pittsburgh research suggested doubts over productivity is the main driver. But the empirical data — when considering all the companies that have issued RTO mandates — found that the probability of RTO mandates was higher for firms with poor prior stock market performance.

“Overall, our results do not support the argument that managers impose these mandates to increase firm values,” the researchers found.

“Instead, these findings are consistent with managers using RTO mandates to reassert control over employees and blame employees as a scapegoat for bad firm performance.”

It’s difficult to justify this point when looking at the performance of IBM, Amazon and many other companies which enjoyed strong market gains during 2023.

Many of these companies, on their way to stellar growth, invested in huge, state-of-the-art office buildings that are now half-empty due to the number of people working from home.

Perhaps it’s just a return to the hum of a full office that managers are seeking. The thrill and innovation that happens when a group of people get together and throw ideas around. And the building of comradeship and corporate pride when people who work together, also socialise together.

Or maybe, it’s just humbug about paying for a massive office building that’s only half occupied.

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