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We’re now finding out the damaging results of the mandated return to the office–and it’s worse than we thought

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We’re now finding out the damaging consequences of the mandated return to office. And it’s not a pretty picture. A trio of compelling reports–the Greenhouse Candidate Experience Report, the Federal Reserve’s Survey of Household Economics and Decisionmaking (SHED), and Unispace’s “Returning for Good” report–collectively paint a stark picture of this brewing storm.

Unispace found that nearly half (42%) of companies with return-to-office mandates witnessed a higher level of employee attrition than they had anticipated. And almost a third (29%) of companies enforcing office returns are struggling with recruitment. In other words, employers knew the mandates would cause some attrition, but they weren’t ready for the serious problems that would result.

Meanwhile, a staggering 76% of employees stand ready to jump ship if their companies decide to pull the plug on flexible work schedules, according to the Greenhouse report. Moreover, employees from historically underrepresented groups are 22% more likely to consider other options if flexibility comes to an end.

In the SHED survey, the gravity of this situation becomes more evident. The survey equates the displeasure of shifting from a flexible work model to a traditional one to that of experiencing a 2-3% pay cut.

People were more open to returning to the office if it was out of choice

Flexible work policies have emerged as the ultimate edge in talent acquisition and retention. The Greenhouse, SHED, and Unispace reports, when viewed together, provide compelling evidence to back this assertion.

Greenhouse finds that 42% of candidates would outright reject roles that lack flexibility. In turn, the SHED survey affirms that employees who work from home a few days a week greatly treasure the arrangement.

The Greenhouse report has ranked employees’ priorities as:

  • Increased compensation (48%)
  • Greater job security (34%)
  • Career advancement opportunities (32%)
  • Better flexible work policies (28%)
  • A more positive company culture (27%)

In other words, excluding career-centric factors such as pay, security, and promotion, flexible work policies ranks first in employees’ priorities.

Interestingly, Unispace throws another factor into the mix: choice. According to their report, overall, the top feelings employees revealed they felt towards the office were happy (31%), motivated (30%), and excited (27%). However, all three of these feelings decrease for those with mandated office returns (27%, 26%, and 22% respectively). In other words, staff were more open to returning to the office if it was out of choice, rather than forced.

Real-life cases are mirroring findings

Recently, I was contacted by a regional insurance company with a workforce of around 2,000 employees. The company enforced a return to the office policy, causing waves of unrest. It soon became evident that their attrition rates were climbing steadily. In line with the Greenhouse report’s findings, most employees would actively seek a new job if flexible work policies were retracted. The underrepresented groups were even more prone to leave, making the situation more daunting.

At that point, they called me to help as a hybrid work expert who The New York Times has called “the office whisperer.” We worked on adapting their return-to-office plan, switching it from a top-down mandate to a team-driven approach, and focusing on welcoming staff to the office for the sake of collaboration and mentoring. As a result, their attrition rates dropped and the feelings of employees toward the office improved, in line with what the Unispace report suggests.

In another case, a large financial services company began noticing employee turnover despite offering competitive salaries and growth opportunities. Upon running an internal survey, they realized that, aside from better compensation and career advancement opportunities, employees were seeking better flexible work policies. This aligned with the Greenhouse and SHED findings, which ranked flexible work policies as a crucial factor influencing job changes. After consulting with me, they adjusted their policies to be more competitive in offering flexibility.

A late-stage SaaS startup decided to embrace this wave of change. They worked with me to introduce flexible work policies, and the result was almost immediate: They noticed a sharp decrease in employee turnover and an uptick in job applications. Their story echoes the collective message from all three reports: Companies must adapt to flexible work policies or risk being outcompeted by other employers.

Inside an employee’s head

As we navigate these shifting landscapes of work, we cannot ignore the human elements at play. Like unseen puppeteers, cognitive biases subtly shape our decisions and perceptions. In the context of flexibility and retention, two cognitive biases come into sharp focus: the status quo bias and anchoring bias.

Imagine a thriving tech startup, successfully operating in a hybrid model during the pandemic. As the world normalized, leadership decided to return to pre-pandemic, in-person work arrangements. However, they faced resistance and an unexpected swell of turnover.

This situation illustrates the potent influence of the status quo bias. This bias, deeply entrenched in our human psyche, inclines us towards maintaining current states or resisting change. Employees, having tasted the fruits of flexible work, felt averse to relinquishing these newfound freedoms.

Consider a large financial institution that enforced a full return to office after the pandemic. Many employees, initially attracted by the brand and pay scale, felt disgruntled. The crux of the problem lies in the anchoring bias, which leads us to heavily rely on the first piece of information offered (the anchor) when making decisions.

When initially joining the company, the employees were primarily concerned with compensation and job security. Once within the fold, the pandemic caused them to shift their focus to work-life balance and flexibility, as confirmed by both the Greenhouse and SHED reports. Unfortunately, the rigid return-to-office policy made these new anchors seem less attainable, resulting in dissatisfaction and an increased propensity to leave.

As we steer our ships through these tumultuous waters, understanding cognitive biases can help illuminate our path. Recognizing and accounting for the status quo and anchoring biases can enable us to create a workplace that not only attracts but also retains its employees in the new age of flexibility. After all, success in the world of business is as much about understanding people as it is about numbers and strategy.

Gleb Tsipursky, Ph.D. (a.k.a. “the office whisperer”) helps tech and finance industry executives drive collaboration, innovation, and retention in hybrid work. He serves as the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts. He is the bestselling author of seven books, including Never Go With Your Gut and Leading Hybrid and Remote Teams. His expertise comes from over 20 years of consulting for Fortune 500 companies from Aflac to Xerox and over 15 years in academia as a behavioral scientist at UNC–Chapel Hill and Ohio State.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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