Investor Alert

The Human Cost

June 7, 2022, 1:17 p.m. EDT

‘I’m very outspoken about my desire to never work in an office again’: CEOs and employees are locked in a battle of wills over when they return to the office

By Quentin Fottrell

<STRONG>The Human Cost is a new MarketWatch column looking at the toll world events have taken on people’s lives.</STRONG>

Amy Faust Liggayu, 32, a market-research project manager based in Tinley Park, Ill., and mother of a 7-month-old son, never imagined she would have a life where she could spend five days a week with him while also working full time. But that was before March 2020, when the COVID-19 pandemic forced offices across the country to tell their employees to work from home.

She had previously spent $20 a day commuting four days a week and worked the fifth day from home, but when her manager called employees back full time, a move many other businesses are making now that vaccines are widely available and the worst days of the pandemic appear to have receded, she was not willing to give up all that freedom remote work had given her. 

The Great Resignation — regarded by some observers as more of a Great Negotiation for better pay and working conditions — has led to the Great Resistance, a battle of wills between senior management and, well, everyone else.

Faust Liggayu counts herself among the Great Resistance. She would often not arrive home until 6:30 p.m. if she left the office at 5 p.m. Those were precious hours lost with her son. “I’m very outspoken about my desire to never work in an office again,” she said. “The quality of life is so much better when you can cut out that commute or spend your lunch break with your family.”

But many companies want workers back. Google parent company Alphabet (NAS:GOOGL) (NAS:GOOG) , Apple (NAS:AAPL) , Facebook parent Meta and Microsoft Corp. (NAS:MSFT) have requested workers go back to the office at least a few days a week. Jefferies Financial Group (NYS:JEF) , JPMorgan Chase (NYS:JPM) and Goldman Sachs Group (NYS:GS) are among the financial institutions that have also asked workers to return.

Tesla’s  (NAS:TSLA) chief executive officer Elon Musk  responded Thursday to an apparent  leaked email on remote work: “They should pretend to work somewhere else” were his exact words on Twitter in the early hours of Thursday morning.

The email in question addressed specifically the electric-car maker’s executive staff and was entitled: “Remote work is no longer acceptable.” (Tesla was not immediately available for comment.)

“Anyone who wishes to do remote work must be in the office for a minimum (and I mean ‘minimum’) of 40 hours per week or depart Tesla. This is less than we ask of factory workers,” said the email dated May 31 and signed “Elon.”

Those early months of COVID-19 when millions of people worked from home also provided a rare opportunity to reevaluate the role of work in their lives. And now they have leverage: Unemployment is falling and wages are rising, as companies struggle to attract and retain workers. In fact, there are two job openings for every unemployed American , the highest level on record since 2001. 

Musk, for what it’s worth, is hardly the first CEO to weigh in on remote work. Last June, JPMorgan Chase’s chief executive, Jamie Dimon told workers that it was time to hire a dog walker, and ditch the Lululemon  (NAS:LULU) sweats.

Working from home “doesn’t work for people who want to hustle, doesn’t work for culture, doesn’t work for idea generation,” Dimon said at a Wall Street Journal CEO Council event in May 2021. “We are getting blowback about coming back internally, but that’s life.”  But in April 2022, he wrote in the company’s annual report that “working from home will become more permanent in American business.”

Not everyone has welcomed such blunt instructions, even when they come from the very top. When Faust Liggayu received news that all employees were going to be back in the office, she was frustrated, she told MarketWatch. “They haven’t been listening to me,” she recalled thinking. “They know I don’t want to go back.” And so she took a stand. “Job recruiters were reaching out to me on LinkedIn. All the jobs they reached out to me about were working from home.”

Amid labor shortage, employees flex their muscles

Faust Liggayu’s refusal to return to the office was win-win: She found a higher-paying new job two months ago that allowed her to work full time from home. “I went from making $50,000 a year to $80,000. When I get to stop at 5 p.m., I’m done. I get to spend that time with my son,” she said. “Time moves quickly. It means so much at this age. It means so much to get those extra two hours a night with him.”

Better yet, the breakup with her former employer where she had worked from 2017 to March 2022 was respectful and without animosity. She had worked at that previous job, and it was a small team. But the standoff between some employees and their companies has not always been so drama-free. Apple, for one, has suffered at least one high-profile resignation as a result. 

A group, “Apple Together,” signed an open letter to the tech giant, claiming more than 3,000 signatures from workers, rejecting a hybrid work model and asking the company to allow them to make their own decisions. “Stop treating us like school kids who need to be told when to be where and what homework to do,” they wrote. (Apple did not respond to a request for comment.)

“There is definitely a sense of resistance amongst employees against the full-week, all-day, in-person work concept,” said Vanessa Burbano, an associate professor of business at Columbia Business School in New York. Remote working enables a degree of flexibility in the day that is practically impossible to recreate in a physical co-working space.”

Thus far, workers have successfully dug their heels into their sofas. Some 64% said they would consider looking for a new job if they were required to return to the office full time, found a survey by ADP, a provider of human resources management software and services. Younger people (18- to 24-year-olds) are the most reluctant (71%) to return to the workplace full time.

“This shift from the traditional 9-to-5, office-based model cannot be undone and has long-term implications for the jobs market,” the report said. “As companies — and employees — re-evaluate their approach to the workforce, it is clear that having a flexible approach is key, as there are advantages and drawbacks to both exclusively, whether fully remote or fully in office.”

Last month, Airbnb acknowledged that the era of full- or even part-time office working is over, telling workers they could work from home or the office if they choose, and work from anywhere in the U.S. without a change in pay. Starting in September, they can also live and work in more than 170 countries for up to 90 days a year in each location.

Sitting in a chair for eight hours a day

There’s no such thing as a free lunch, said Chris Herd, the CEO of Firstbase, which helps companies go remote. “Workers don’t want toys or free food, they want a higher quality of life,” Herd said. “Forcing people to commute two hours a day — where they carry laptops to an office to sit in a chair for eight hours and then Slack or Zoom (NAS:ZM) people who aren’t in the office all day — has created broken ways of living.”

He said the Great Resignation reflects people’s desperation for better work-life balance, and believes that giving ultimatums will lead to “armageddon” inside companies. “Over the last two years, companies have found out people don’t need to be in the office for great work to keep happening,” he said. “Now, companies are pushing back for employees to return to office again.”

Nicholas Bloom, a professor in the department of economics at Stanford University, said neither hard nor soft nudges will work. His own poll of 3,000 people revealed a “fiendishly hard” task for managers to get people back. “Nobody commutes for one hour for a free bagel or box or to use a ping-pong table,” he said. “They come in to catch up with friends and work in person.”

Indeed, some Silicon Valley companies pulled out all the stops to entice people back and foster a sense of community, he told MarketWatch. “Google got so desperate they hired Lizzo to give a concert , which is great for one day, but unless you are planning on getting Katy Perry, Taylor Swift and then Justin Bieber after that, this is not a permanent solution.” (Google did not respond to request for comment.)

“The resistance is there when employees do not see the point in coming in,” Bloom said. “If you have to force somebody to come to the office, it is not in their interests to come in. To avoid forcing people, you need to make it benefit them to come in. That means setting up typically two or three days a week of office time on anchor days when everyone comes in.”

He said it makes more sense to create a hybrid environment where team members show up on the same day rather than enforce a five-day week and fail. “So I see resistance to returning to the office a symptom of over-ambitious return to office plans. Realistic plans centered around anchor days, probably two to start off with, can work well and firms can build on this.”

Microsoft, for instance, said on Feb. 28 that it would give Washington state employees 30 days to adapt to the working preferences they had agreed upon with their managers. “We anticipate many of our other U.S. locations will follow suit as conditions allow,” Chris Capossela, executive vice president and chief marketing officer, wrote in a blog post.

For those who can work from home part- or full-time, this may be a luxury problem. The Labor Department says only 7.7% of employees teleworked in April. The Federal Reserve Board’s survey looking into Americans’ economic well-being released Monday estimated a higher percentage of employees (22%) worked entirely from home.

“Among those working from home, the share of employees who would look for another job if their employer required they work in person was similar to the share who would look after a pay freeze,” the report said.

Millions of other jobs necessitate in-person interactions. Retail, manufacturing and essential-services workers such as supermarket and hospital staff and public-transport employees have put their lives at risk during the pandemic. 

Remote work is a tradeoff for everyone

As managers negotiate with office workers, companies are negotiating with landlords about their office leases. In Manhattan, monthly leasing activity decreased by 11.5% month over month to 2.7 million square feet in April, Colliers said . However, companies seem to be betting on some kind of return to office life: Demand more than doubled year over year.

Herd, however, said managers will soon see the advantage of remote work. “E-commerce killed physical stores because people prefer to shop online; it gave them more choice, it was more efficient and costs less,” he said. “E-companies kill office-based companies because workers prefer to work online; it gives them more choice, it is more efficient and costs less.”

It’s obviously not a one-size-fits-all question, even for those who have had the luxury of working from home. “For me, in the mental-health counseling field, I can see both sides,” said Ken Steinbacher, a Portland, Ore.,-based counselor. “There is a special connection when we are in the same space together face to face, and I would love to be able to connect that way again.”

“The reality is that most of my clients might not be able to have therapy if they had to block out time to go into an office,” Steinbacher told MarketWatch. “Working virtually has made my services much more accessible to a great many people, and I can’t see that changing. So yes, I love the idea of being in person, but that may not be the world we live in.”

Workers miss out on the emotional, social and intellectual stimulation that comes with being around others, said Peter Gray, a professor of commerce at the University of Virginia. For that reason, he favors a hybrid work model. “Employee resistance is to me perfectly natural when people believe that they can be just as effective at home as in the office,” he said.

But spending all that time working from your sofa or kitchen table — or, if you’re lucky enough to have one, a home office — may be a more expensive tradeoff for employees and management than they anticipate. “What they don’t realize is that their networks will slowly shrink as they spend more time at home, and this can hamper their effectiveness long term,” Gray said.

“Once they realize that some of the rich interactions they used to have in the office have faded, they start to wonder if they might be missing something important,” he added. “And as their broader networks shrink — the ones that expose them to creative new ways of thinking outside of their main work stream — their performance can suffer.”

The resistance appears to be winning

Another obstacle: An empty or half-empty office doesn’t help new employees or interns who rely on those face-to-face interactions for honing their skills and, critically, building a professional network so they can move up the corporate ladder and/or have opportunities for promotion. For every seasoned employee who knows the ropes, there are often others who need a helping hand. 

Skeptics also worry that some people may be tempted to take advantage of remote work by, say, spending an hour or two catching up on their favorite TV show while keeping a casual eye on their work emails — or worse, taking the entire day off and going to the beach, answering the occasional Slack message from under an umbrella. In fact, eight out of 10 remote workers in one 2020 survey admitted to slacking off. 

Burbano, the Columbia Business School professor, is not surprised by such polls. “Remote work also comes with increased opportunities for worker misconduct, worker shirking and putting in less effort, as my research has shown , which is likely part of the reason that there is a desire amongst employers to bring people back to the physical office.”

Social media is filled with people claiming they will point-blank refuse to commute again. “I’m not going back to the office with these gas prices,” one person recently wrote on Twitter . “The gas people and the commercial real-estate people are just gonna have to fight it out amongst themselves.” Another added bluntly : “Not in the mood to work or be around people.”

Twitter itself, meanwhile, is not mandating that workers come into the office. “Twitter employees may continue to work from home part time or forever if they choose — this has always been the case,” a spokesman told MarketWatch. “While we reopened our offices globally in March, we will never mandate employees to return to the office. Our priority is for employees to work wherever they feel most productive and creative.” He referenced a statement by CEO Parag Agrawal.

Recent research suggests such resistance is winning. The Conference Board, a nonprofit organization, says only 9% of companies are requiring staff to return to work full time, while 30% were on a hybrid work/home schedule — even if a few days a week appears too much for some Apple employees and workers like Faust Liggayu.

Faust Liggayu doesn’t fully buy the brainstorming-by-the-watercooler argument . “At my previous job, we had a meeting every morning to go over the workload for the day. That meeting would sometimes last an hour because we would just bulls*** about everything. But if you have enough calls where you can be spontaneous and a good team that works together well, you can still have that environment.”

And now? She is much happier at her new fully remote, better-paying job.

“I make a point of remembering what people are up to and ask them about their plans for the weekend to keep that community together,” she said. “I love it. I officially turned one of our extra bedrooms into an office. I get to spend my lunch with my son, feed him when he’s hungry. The flexibility is incredible.”

The Human Cost:

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Airbnb hosts brace for a busy summer season: ‘My wife and I, and our employees will be on our hands and knees, scrubbing toilets and sinks’

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