12-17-2024
Researchers at the University of Pittsburgh (Pitt) assessed the impact of return-to-office mandates on employee turnover and hiring. Focusing on S&P 500 high-tech and financial firms with these RTO policies, they found an “abnormally” high employee turnover. Women, senior-level employees, and higher-skilled employees left the firms at higher rates. The open jobs took longer than usual to fill for employers. The Pitt study concluded that firms are “losing their best talent and female employees,” and it is harder to attract talent after RTO mandates.
In the introduction, the researchers cited evidence that voluntary corporate turnover is bad for business. It reduces productivity and the quality of service. High turnover is linked to potentially lower executive compensation levels. Investors see high turnover rates as a negative indicator of future earnings performance.
Fifty-seven high-tech and financial firms on the S&P 500 made RTO mandate announcements. The researchers tracked and used the LinkedIn profile data of 3 million workers (which is most widely used by employees in these sectors). The researchers concluded their study “highlights brain drain as a significant cost of RTO mandates, even for the largest firms in the world.” This recent study correlates with another Pitt survey from February 2024. In that earlier survey, researchers asserted that RTO mandates hurt employee satisfaction and did not improve firm performance. The likely heads of the proposed Department of Government Efficiency plan to use these RTO mandates for the express purpose of creating “mass head-count reductions across the federal bureaucracy.” Meanwhile, a Resume Builder report shows that some employees stealthily evade these RTO rules to avoid full-time office requirements.