X [Doubt]
CEOs, admit they used feelings over logic and everyone had to just pretend it made sense?
The only feelings were probably that they thought the productivity loss would be less than the losses in commercial real estate, and now they’ve either minimized the real estate losses, or realized them, and they feel the equation has flipped
It has nothing to do with real estate. This is often echoed on social media but is baseless.
Companies typically chase quarterly growth over all else. Working from home benefits that while trying to fix real estate values is a long term thing, only offering a payout if they sell the building, which most companies aren’t worried about. Companies tend to be very hesitant to hurt quarterly growth in favor of long term, iffy investments.
Even if they did care about real estate value, they’d rather all other companies return to office, boosting those values, while they could then remain remote and take advantage of both the higher real estate values and also the numerous advantages of remote work.
Boosting real estate values in this way is a collective action problem where most companies would need to work together for the greater good (as they see it). But if you hold this world view, that CEOs will screw over their employees for their bottom line, why wouldn’t they also screw over other companies? They would. They would want other companies to work together to fix the real estate values while also benefitting from remote work. So it would all fall apart.
Here are more likely scenarios:
- SHAREHOLDERS. Shareholders don’t like unused assets. “Use it or lose it”. So, CEOs force return to office because they think it’ll help the stock price. Shareholders are also likely to blame as evidenced by publicly traded companies being more likely to mandate a return to office.
- Personal preference. CEOs, and other executives who make this decision, simply prefer to work in the office and they prefer a full office to an empty one. Either cause: they have a very extroverted personality (likely how they got the job in the first place), they feel more powerful with all their underlings around, or they have a harder time working from home and can’t fathom anyone being different.
It’s even better when my CEO slipped up and admitted in front of the entire company that the return to office policy was based solely on a feeling.
I thought the point was to get people to resign so they didn’t have to pay severance?
My company had that same attitude when they announced full RTO. They were then faced with extremely high turnover for a sustained period. They had trouble hiring people to fulfill the constant merry-go-round of job openings and that negatively impacted productivity. So they backed off from full RTO and moved to a hybrid model instead.
Hybrid model is such a stupid fucking compromise. Come in when a scrum or meeting is needed. Leave everyone else the fuck alone if they’re hitting targets.
It also limits hiring/job pools because you still need to live close enough to come in to the office. May as well be a full office job then. Hybrid is not a compromise to remote.
I agree. I would prefer full remote.
Maybe enough people resigned.
CEOs will admit nothing.
Shareholders like to hear that employees are having to come to the office, being fired, or pissing in bottles. It means more money for the shareholders.
“Every hour we’ll beat our lowest performing employee with a pool ball in a sock.”
The line goes up.
Why are shareholders happy to hear that businesses are spending unnecessary money on renting office spaces?
Because they’re disconnected from reality. Same reason they’re fine with co2 emissions even though they live in the same biosphere.
Because most shareholders are boomers.
Because they also hold shares in the companies that rent offices.
None of these businesses have given up their office spaces. They’re also likely on very long term contracts. Not using them is wasting money.
I agree with you, but want to point out that not using offices is just perceived as wasting money. They don’t actually lose any money if the office is used or not, they might even save money on utility costs and supplies. It’s just sunk cost fallacy.
That’s correct, and the board doesn’t want to perceive wastage…so whoever is holding the bucket for entering into the lease will be pushing for mandated returns. This is likely the CEO or COO and so holds huge sway and likely ends up in said mandate being implemented.
My last company entered into a new lease during covid, while also making “the way we work has changed” noises. They then spent millions on the refit. And then were shocked that people weren’t coming in to admire their amazing space they’d just spent millions on.
But companies are owned separately. Reducing office costs would increase the value of the renting company while decreasing the value of commercial real estate, regardless of their ownership.
Investors owning both real estate and the companies renting that real estate are not colluding. One investor who owns 90% stocks and 10% real estate is not going to help out another investor who owns 90% real estate and 10% stocks.
Because they also hold shares in the companies that rent offices.
Source?
Because they also hold shares in the companies that rent offices
You know this isn’t true, right? Like, you know that?
Never heard of REIT?
And banks! If you own bank stocks, you own mortgages. If you own the S&P, you own bank stocks.
C’mon man. You’re being serious?
Yes. It’s a legitimate investment vehicle that people with money use to diversify their holdings. What’s with the incredulity? Rich people act in their own interests, news at 11
You’re suggesting, with a serious face, that the fact that real estate investment trusts exist means that “rich people own the buildings their companies are in and want return to office to raise the value of those buildings.”
That’s a thing you think is real?
Be honest with me. Did you find out about REITs from a meme?
Your downvotes confirm my theory that you get your world view from memes.
They own REITs
They don’t, it’s a statement that people are repeating because they heard it from someone else, with nobody stopping to actually think about it.
There is no conspiracy by CEOs to get people back to the office to prop up real estate values.
Shareholders like to hear that employees are having to come to the office, being fired, or pissing in bottles. It means more money for the shareholders.
How would any of these things necessarily correlate to more money?
Because line goes up.
It doesn’t matter how profitable the company is. It only matters how much the people who want to buy your shares are prepared to pay for them.
It doesn’t matter how profitable the company is.
Do you know what a dividend is?
It doesn’t matter how profitable the company is. It only matters how much the people who want to buy your shares are prepared to pay for them.
Man I am not being mean here, I promise, but you need to hear this: Stop getting your worldview from memes.
These things you say are so wrong that unpacking them would take quadruple the space and effort of you saying them. If profitability doesn’t matter, why is there negative wage pressure from employers? Why is there a community called work reform??
Also the meme “line goes up” isn’t about businesses, it’s about global poverty.
(Not OP) There is some truth to it, though. Profitability and stock price are, at best, loosely related. There was a time (possibly right now; I didn’t bother to check) where Tesla’s market cap (total value of all stock) was higher than the entire rest of the automakers combined. This is despite the former having only a fraction of sales, revenue, profits, and even projected sales of most of their peers. Much of this is a gold rush/pump-and-dump cycle, where earlier investors expect to profit from later investors.
That being said, I acknowledge your main point that it’s the perception of (future) profits that generally drives stock prices. Tesla is an exception. Most stocks move on more traditional drivers, such as value and growth.
I don’t see how forcing people back to the office will drive profits, though. Office space is expensive. At my employer (pre-COVID), it was over $500 per employee per month. That was the grand total for rent, HVAC, networking, etc. It was second only to salaries in terms of expenses. This is in a city that is regularly featured in the lists of most affordable places to live in the US. Is there some study (esp Gartner, since that’s what the suits blindly follow) that shows higher productivity in office?
It’s a combination of things, really. Global markets and the Internet has changed how firms compete. They no longer compete to have more customers. Thanks to globalization and the Internet, the customer base for any given company is essentially infinite, or at least much bigger than firms need. What’s scarce is investment capital, and equity markets are growing more and more speculative as time goes on. Investors are buying, not on the expected dividends they’ll receive as a share of the profits, but on their ability to flip the stock to sell at a higher price, to another investor who are themselves expecting to flip the stock, there’s absolutely no regards to the fundamentals of the business. It’s like watching a group of house flippers buy all the properties in a neighborhood and flip them a little, then sell them to one another, and the property values just keep going up.
We saw this with D&D Beyond and Wizards of the Coast. A whistleblower from within the company said that the executives see the customers as an “obstacle to their money”. Under that mindset, you don’t have customers to serve, you have assets to monetize, and customers are preventing you from monetizing said assets.
Poor thing doesn’t understand that companies pay their shareholders money, and the more profit they make, the more money they can pay their shareholders.
I sincerely thought this headline was from the onion. I don’t think a lot of CEOs have the humility to admit fault.
It’s impossible to hide the productivity losses from shareholders.
When has easily identified objective reality ever discouraged CEOs?
The data showed the same thing on a smaller scale BEFORE the pandemic and they still almost universally demanded that people needlessly commute to perform location-agnostic tasks.
That they haven’t learned any lessons is par for the course.
It wasn’t ever about productivity, it was about control.
It’s not about control, it’s about trying to protect the economy from uncertainty.
Edit: to clarify: the part of the economy that serves large business owners (business real estate stocks, the shares of their company and the stock market in general). I really don’t think the majority of managers care that much about control.
Lol what an empty statement.
Shhh! Don’t scare the economy!
I don’t know. My statement seemed clear enough to me. I tried to clarify. Maybe I’m overthinking it but I find that those that think it’s about control a bit short sighted.
It’s absolutely about control. Example. I did a short spell at a hedge fund earlier this year and they were hyper-focussed about staff being onsite. Didn’t even have seating in the kitchen or a dining area. Just bank after bank of fixed desks with people yelling at each other on video calls to other people in the same office. Control, control, control.
Maybe I’m lucky to not work in such a horrible environment. Thanks for sharing. Why do people put up with it… I mean I know it’s not always easy to find work elsewhere.
In this particular case, a combination of factors:
- The company must ensure that all work-related communications for the traders (the people directing billions for the organisation and its customers) are recorded, not just recording all phone calls and emails, literally everything. They like to have these people work onsite for this because of course nobody can ever be trusted and nobody ever goes to lunch…
- Management is all boomers - literally can’t get their heads around remote work. They think that if you aren’t in the office suffering then you are skiving. It’s literally about an identity and conformity.
- Management is completely focussed on traders - ‘if they all have to be here then so must everyone else’
- They pay exceptionally well. Absolutely a horrible environment but if you move the needle at a hedge fund then they will pay you more than any other type of employer.
I see. Really weird to hear about these old school boomers’ mentality. I thought they were the minority because “why would I work for you if you say shit like that?” In the tech industry where I work this wouldn’t fly. Or companies push for rto just to push people out. But I can now imagine how it can be in other industries.
Because if you don’t put up with it, you die.
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Hey, you had the opportunity to let the boomer remover do its thing, but y’all had to go and get everybody vaccinated.
Just to clarify I’m not saying the productivity argument to force everyone back is valid. I think I’m just lucky to be working with reasonable people who value the flexibility of a balance of WFH and RTO. Managers and other staff alike.
There is no flexibility when you have mandated WFH and RTO. Can you come and go on your own accord, going to an office only when you feel you would better accomplish your tasks there? That’s flexibility. We work from home Monday Tuesday, and at the office Wednesday, Thursday, and Friday? That’s not flexibility.
Ah I see. Basically yes we have proper flexibility. There’s encouragement to go in more but no “stick” (yet). Some are fully remote and doing well for example.
Sounds pretty rad! Hope the sticks stay in the closet, where they belong.
If by economy you mean business owners, business real estate, and the stock market, yes. The RTO mandates certainly aren’t about protecting the workers or productivity though.
Remember, the workers, buying power, and productivity are part of “the economy” too, it’s not just what the stock market is doing. RTO mandates are harming that for jobs that can be done remotely.
Yes I meant what you said, exactly. The part of the economy that serves business owners.
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Yes I realise I’ll have to make it clearer next time. Thank you.
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Cheers. All the best to you and your loved ones for 2024!
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Alternate headline: CEOs still out of touch with rank and file employees, continue to set policy based on enormous egos and to assuage shareholders
Additional descriptor: Because McKinsey and the other big 3 PM’s are pushing the same narrative with every client.
Admit wrongdoing? Ahahahahwhwhhahahahahahahahahahah
CEOs will never admit shit until they’re paid to do so.
Absolutely this. All the metrics already tell us that productivity does not decline from allowing employees to work from home. Why would additional data suddenly cause CEOs to admit what’s already known?
I have seen productivity drop when my team had to move from WFH to hybrid minimum 3 days a week in the office. People resent being told to come into the office to meet coworkers online, work on computers. Commute to do exactly as they would do at home.
Just let people work remote. It is the best way for me to be productive and not have to spend extra money on travel.
“You want something that doesn’t affect our bottom line and improves your life? Fuck you! I pulled myself up by the bootstraps… They were golden and provided by my daddy, but I pulled myself up all the same!”
–Billionaires, probably
Anybody with a job that isn’t in a warehouse will tell you productivity went up with work from home, not down. Fuck the media for always sleeping through reality.
Not to mention, you aren’t as aware of down time when you’re there in person. You’re at the office, so most tasks you do still feel like work. If you’re a knowledge worker you might spend 4 hours getting actual work done, and you can see that way more easily at home. I think that’s why people have been more productive, because they think they’re falling behind when they really aren’t.
Plus, being in a familiar environment and not needing to wake up early for commutes is massive.
Also didn’t help teachers at all. But ya, for all office workers who aren’t social and especially for those of us who had a long commute, wfh was a godsend.
Guess what I’m doing for 45-60 minutes each day while NOT driving to/from an office…
Watching anime waiting for 9:00 to roll around
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CEOs won’t admit anything. We had some downsizing over the pandemic but they still want us in the office while claiming that we all miss the “magic meeting in an elevator/hallway moments” and that supposedly collaboration is greatly enhanced. Meanwhile when asked if we’d have adequate facilities, there was a pause before being told an empty “…yes”. So what are the adequate facilities? Open spaces and unassigned seating so you don’t know where you’ll be sitting the next day. Instead of a well-furnished home office with peace and quiet, I will get to enjoy a spartan open space with many distractions.
Real estate prices has been mentioned as a reason for CEOs to do this and I’m sure that plays a part since they’re often invested in such things, but also, it’s likely a way to get people to quit so that they don’t have to have formal layoffs.
Instead of a well-furnished home office
I hope this is isn’t seen as derailing the subject at hand, but just out of curiosity, what do you consider a well furnished home office?
Not the original commenter, but for me it’s a comfortable chair, desk, and computer set up in a quiet room with a door I can close. Nice speakers and/or headphones and a small couch are a plus.
comfortable chair
those are more challenging to source than mattresses, just being willing to spend money alone isn’t sufficient.
It took a couple shots for me, but I found a chair that seems to be perfectly suited to my body and the level of support I need. As an added bonus, it wasn’t even that expensive.
My home office is an oasis compared to any company supplied office that I’ve ever had. 100% climate control. A desk that is 100% the size and layout that I want. Perfect office computer chair, finely dialed in. A decorative environment that is perfectly to my taste, no expense spared, that wasn’t subject to anyone else’s scrutiny or opinions. Private bathroom. Hell there’s even a bed in my office, used for micro naps when needed, but don’t tell the Boomers that. They might spontaneously combust in outrage.
A private office with a comfortable chair, a large desk, multiple monitors, and all the equipment I need within reach and always hooked up or within cabinets that only I have access to. Instead they’re providing an open space with no privacy (i.e. full of distractions), shared tables, a single monitor (or using the laptop screen), and shared equipment. Their chairs are comfortable though.
I love leaving my standing desk and ergonomic equipment behind so that I can use objectively worse equipment with the promise that “renovations are coming to your team in the next few years.” My boss hunts for open seating in the neighboring office building so that they can actually use a standing desk on the days we have to come in, which is antithetical to the “spirit of collaboration” RTO is supposed to foster.
Like either let us use our own setup or invest in an office setup that is tolerable for people to use. We all know that they don’t give a shit about employees, but they could at least pretend they’re considering our experience when forcing these decisions on us.
It’s not mainly “corporate real estate” or “getting people to quit” that motivates CEOs. Regardless of what your personal experience, CEOs do not own the building or want to spend money on hiring. They legitimately think that “meeting in the hallway” is a good idea because that’s the only time they spend listening to the little people.
You know that you can just ask someone for info like a normal person, but they are legitimately isolated. Many people freeze up if they get a call, email, Slack message, whatever from the Executive Team. CEOs need leadership training to manage remote workers.
CEOs were already well-detached from reality before the pandemic started and before internet got good enough to allow for a lot of people to work from home. People are just as likely to freeze up seeing the CEO in person.
I think this is because the reason to get people to get back into office was to protect commercial real estate values.
Now that the third tallest tower in LA sold for 45% its previous selling price, the dominoes have started to fall.
Now, it will be about getting people to work from home and trying to get out of these buildings as they are a failed investment.
So we are going to start seeing companies “offer” to let people work from home. They may even ask you to take a pay cut or something for the privilege.
This is just my prediction and I’m not an expert in these fields. So take this with a grain of salt.
If you are working in an office by force and they offer to let you work from home with a pay cut, I’d hold out a few months as they may start forcing people to work from home at full pay.
So here is some real-world anecdata from this current month: I have been interviewing in UK with smaller companies and one of the first questions has been what compensation I am seeking. I have been upfront about my preference (remote first) and travel costs, which I calculate as approximately the equivalent of £10k/year gross salary for each scheduled day/week on site from my location to nearest major city. I have said that I can do up to 2 x regular day/week onsite.
- Nobody has disputed my reckoning or reasoning
- Startup company advertised ‘hybrid’. I gave a comp ask saying ‘with 1 day/week on site’. They came back to suggest a 10k lesser figure full remote. I withdrew because I accepted another offer but this would have been acceptable.
- Scale-up company- again advertised ‘hybrid’, suggesting 1 day/fortnight onsite. I gave same salary/travel calculation. They came back with offer of my basic figure for remote with quarterly visits at company expense instead, i.e. travel, accommodation etc. I accepted this.
This is a conspiracy theory. For this hypothesis to be true, it would take all companies and and real estate companies to cooperate. This is something people are likely to believe because it is an us vs them theory. But in practice they are incapable of doing it.
The problem is that real estate companies and lending companies have competing interests. Real estate companies want people to go back to office, obviously. But other companies would save loads of money by going full remote. The current lease is irrelevant, because the money is already lost, and it won’t be recovered if people go back to office. The sunk cost fallacy is not a fallacy any decent company will fall for. People though will easily believe they do, especially when they are not protecting themselves from it.
My hypothesis is that management and direction are controle freaks who cannot trust their employees. They are also aroogant. This leads to a situation where they will attribute any productivity benefit during remote work to their skills and decisions, and they will attribute any decrease to employee lazyness when they’re not closely monitored. They want to correct this by bringing people back to office to appease their mind. There is reaction to change too, obviously, but I suppose it simply takes the shape I described, the shape of distrust of employees.
For this hypothesis to be true, it would take all companies and and real estate companies to cooperate.
Not all, just a lot of them. That is not hard to imagine, since the same companies who are the biggest investors in real estate (commercial or residential for that matter) are also the biggest institutional owners of the stock of public companies. The point is, the ownership of all this converges at Wall Street, and that’s where this goes one way or another.
No, because then one company would exploit this. And it would still be a big loss for the companies not owning the real estate.
Exploit higher costs and lower productivity paying for office space?
Some companies continued WFH, some were full remote even before the pandemic. They are shown to be very competitive in their markets. OTOH, many RTO companies have been shown to be hurt b their RTO policies, but leadership didn’t care. Insiders usually point to commercial real estate investments as the reason, where the owners decided they themselves will lose less money if their companies tank a bit, but their other investments don’t take a dive.
It’s not even a conspiracy at this point. Sure, there are weird middle manager types and people who hate being at home and all that, but the main driving force behind institutional change at megacorps is not Joe the team lead with 6 rungs above him and one below on the corporate ladder.
I think this is because the reason to get people to get back into office was to protect commercial real estate values.
I keep seeing people make this claim, but I never see any evidence to back it up. Large businesses usually lease their office space, so why should they care how much it is worth? And the ones that do own their buildings, probably aren’t planning to sell any time soon, so why should they care?
The whole thing just sounds like nonsense to me.
But they helped their buddies with empty real estate downtown so it’s all good.
Again with this claim. Do you really think executives that get paid bonuses based on how well the company performs are going to make poor business decisions to help out their friends?
Depends on where their investment assets are
You can just invest in something else instead.
Are you being purposefully obtuse, or do really not understand?
Why the fuck would they invest in something else when they think they have the power to manipulate their position into inflated value? If there is a rush to return to the office then demand for the best places would exceed supply and those stocks would skyrocket. They’d make out like bandits.
Of course, it’s not really panning out that way; the cat’s out of the bag on remote work, Pandora’s box is open. So some of that gung-ho for RTO will die out. Sure there will still be some, as some people just want employees under stricter observation and control (mostly for pretty unjustifiable reasons) but there really isn’t much of a financial incentive from an office prestige or from a productivity standpoint anymore. Shareholders are going to wonder why the companies who insist on RTO are taking on the extra cost and liability, when that money could be going toward dividends.
You’re really getting into tinfoil hat territory with this, to be honest.
This won’t happen because no one is measuring productivity. If they had any way to measure productivity or even cared about it, there wouldn’t be bullshit jobs. CEOs will never admit this, because it was never the point.
If there weren’t bullshit jobs, capitalism would collapse. There wouldn’t be enough jobs to feed the workers, so they’d revolt and overthrow the system. People don’t revolt and overthrow the system very often, but when two thirds of the population is starving, they do.
These are not mutually exclusive.
They didn’t do it because productivity. They did it because real estate prices. Also they like to watch people work.
Top management did it for their realestate portfolio, middle management did it because if works at home it suddenly becomes obvious most of them are completely superfluous.
