Hello, and welcome back to Inc.'s 1 Smart Business Story. Big companies like Amazon, Instagram and Paramount are loudly demanding workers return to the office, and by most measures, they're succeeding. 

But while these large firms herd employees back to their desks, hundreds of newer, fast-growing companies are doing the opposite.. No office leases. No seating plans. No "vibe culture." Investors are actually pushing back against office space as an unnecessary luxury.

The RTO argument was always framed as a productivity debate, but now that enough time has passed for real measurement, the studies supporting that case have quietly disappeared. What's replaced them is a growing body of research from MIT, Wharton, and the University of Pittsburgh pointing in a very different direction.

In this article you’ll find:

EXPERT OPINION BY JOE PROCOPIO, FOUNDER

I have a poorly kept secret about remote work to share with you.

“Our findings are … managers use RTO for power grabbing and blaming employees for poor performance.”

I’m just gonna leave that there for a minute.

Conventional wisdom will tell you that more companies are being more forceful about demanding more of their employees return to the office, at least three days a week, if not the full five, and that they’re succeeding.

This is true. I’m not going to deny this.

Here are just some of the latest of the big boys calling their corporate herds back to the pen: Stellantis, Home Depot, Instagram, Paramount, and our old favorite, Amazon.

One would think this means that it’s just a matter of time before the trickle-down effect means that every company in the tech sector will return to its senses and return to palatial and glorious office spaces smack in the heart of vibrant downtowns with cultural amenities and plenty of “vibe.”

This isn’t happening. And I’ll tell you why. 

“I’m getting a ton of inbound from commercial real estate agents and … I just don’t even respond.”

That quote came from “Jack,” a tech company CEO I’ve spoken about before under another name. Jack runs an eight-figure-AR tech firm with just over 120 employees, almost 50 of whom have been hired in the past two years. 

(Yeah, Jack still won’t let me name his company. He has “plenty of résumés, thanks.”)

Jack is located in a mid-major U.S. metro, with about 30 percent of his employee base located in a modest space he’s occupied since 2020, when the company had just enough employees to fill half of it.  

Once Jack moved in, he immediately decided to only increase head count in that space if he had to, not the other way around. He embraced a full remote-work policy, and more important, planned for it early and built it out proactively. Now the local space, still not bursting at the seams, is there for when an employee needs it.

So that begs the question: Besides the size, what makes Jack’s company different from all those RTO-mandating companies he’s supposed to be emulating?

Well, as Mona Lisa Vito once said, “It’s a bull**** question.” Because the correct answer is “nothing.” Jack just never created the problem that RTO is mandated to fix.

Here’s the poorly kept secret. 

In my line of work – technical and AI – along with the kind of writing I do and the networks I’ve built, I get to interact with a ton of new, young, or hypergrowing companies. These aren’t solos or super small businesses. They range from 10 to 100 to even 1,000 employees, all of them have customers and generate revenue, and some have raised up to hundreds of millions of dollars. 

Here’s what I can tell you.

None of the bootstrapped companies doing over $1 million in revenue (up to and including Jack’s) are rushing out to establish or upgrade their office situation. Zero.

No company that has formed in the past three years and has not received a windfall outside investment of over $20 million is out there trying to secure a corporate lease. Zero.

Of those who have raised over $20 million, only a handful have used any of that money to lease space at all, and none have prioritized seating their entire workforce, let alone planning for the future.

The companies that have established office space are doing so “against the better judgment” of their investors. In all cases, it’s seen as an unnecessary luxury. No one is talking about in-person vibe culture anymore.

I am purposely leaving out three companies, out of over 100, that happen to have business-model-based physical requirements to house every person they hire. I know it’s difficult for doctors, chefs, and airline pilots to work from home.

Jack got into his lease when the pandemic pushed a lot of companies out. He got in on a fire sale, basically, and the windfall that brought to his bottom line is not something he’s going to undo. He did remote work proactively and he did it right. Why go back?

This was always going to happen, because unfortunately, there’s no way to measure exactly how bad an idea RTO is until you get everyone back in the office and they all start wasting time again. Especially when a bunch of them got fired on the way back.

Now. Don’t get me wrong. I’m not saying these employees are going out of their way to waste time once they return to the office. The wasted time is just sort of baked in. Automatic, if you will. Commutes, lack of focus time, and the one no one talks about, resentment.

Even that article I linked to above announcing the latest RTO mandaters is rooted in a bunch of interesting data showing the potential for it working against the employer, including this old chestnut:

“One way to lose about 5 to 10 percent of staff is to make them all come in five days a week,” Bloom says. “For every person that quits because of the RTO, that is one less person that needs a redundancy package.”

I’ve said it before but apparently I need to say it again. If a company is looking for a way to force out its best people and breed resentment among the less-talented hangers-on, an RTO mandate is the sure-fire number-one way to do it.

The RTO argument was never about productivity, because there was no significant data on remote work.

Until now. And it’s not shaping up well for RTO mandates. 

Now that — and this is important — now that enough time has passed for real measurement of RTO versus remote-work evidence, the pro-RTO productivity studies have virtually disappeared, while we’re getting an abundance of studies and academic articles addressing: 

The hits to company culture (MIT Sloan Management): “The organizations winning the culture battle aren’t those forcing rigid attendance policies.”

The hits to an overstressed infrastructure (Wharton): “… the big problem that companies don’t want to talk about. A lot of the line managers and the CEO think everybody should come back, but physically it can’t work.”

And most damning, the hits to employee and company performance (University of Pittsburgh): “… managers use RTO for power grabbing and blaming employees for poor performance.”

Oh, hey, my final RTO warning post is right there on the first page of “RTO Mandates” search results. That post is neither a study nor academic. It’s mostly jokes!

I can make jokes because, once you get past external physical requirements, the decision is a no-brainer. Those studies are all saying some variation of the common-sense thing I’ve been joking about for years now. To echo the Wharton article: “The companies that insist on having everyone in the office every day will have more attrition and will find it harder to attract talent.”

How much longer will the job market favor the employer? Actually, it’s a hypothetical and nuanced question with a lot of answers, but I don’t care about anyone’s specific answer because I know none of the answers are “forever.”

Like I said back in September, remote-work-enabling tech, accelerated by a once-in-a-generation catalyst advancement during the pandemic, has caught up, and the clock is ticking. Now might be a good time to pull that office-space lease out of the filing cabinet and give it a quick look-see.