RTO mandates slow company growth, Revelio Labs data shows
NEW YORK, UNITED STATES — Companies enforcing return-to-office (RTO) policies are experiencing slower workforce growth compared to those offering flexible work arrangements.
Recent analysis by Revelio Labs reveals that since June 2022, businesses allowing flexible work have grown their workforce by 1.6%, while those requiring RTO grew by only 1%.
The hidden cost of office mandates
A University of Pittsburgh study found that companies implementing RTO mandates faced “abnormally high turnover,” particularly affecting female employees, senior staff, and skilled workers.
These organizations also struggled with recruitment, taking longer to fill vacancies and experiencing significantly decreased hire rates.
“On the academic side, the robust result is that the hybrid model is the best model,” notes Loujaina Abdelwahed, economist at Revelio Labs. “If we want what is actually great for the company, it’s hybrid.”
Corporate America’s growing divide
Despite mounting evidence against strict office mandates, major companies are intensifying their RTO policies. Amazon, now “the largest company in the world to have a full time, in-office policy,” according to Flex Index CEO Rob Sadow, has sparked a trend of corporate policy reevaluation.
Some organizations have taken stringent measures. Publicis Media fired dozens of U.S. employees who didn’t comply with their three-day office requirement, while Starbucks warned of potential termination for those not following RTO guidelines in 2025.
The University of Chicago and University of Michigan researchers discovered that RTO mandates at major tech companies led to increased departures among senior talent, with many moving to direct competitors. This brain drain poses a significant challenge, as these employees typically departed several months earlier than they might have without such mandates.
Ellen Ernst Kossek, management professor at Purdue University, warns that blanket RTO mandates “backfire because it’s not managing your workforce to keep the talent that you have.” The consequences include damaged morale, reduced productivity, and increased burnout among remaining staff.
In conclusion, while some companies persist in enforcing return-to-office mandates, the evidence suggests that flexible work policies not only support workforce stability but also enhance employee satisfaction and retention.
