Who will follow Amazon back into the office?

The best job market of many people’s lifetime is over. Going forward, workers and job seekers will have less bargaining power in most industries, and this will affect their pay and perks. But it doesn’t mean that there will be a rush to follow Amazon’s lead. Five-day mandates run the risk of backfiring, because star workers will be given an excuse to look for new jobs.

Jassy believes that getting workers back together full-time is necessary to maintain office culture and enhance productivity. Research on working from home shows that the jury is still out. Mark Ma, an associate professor of business administration at the University of Pittsburgh, has studied this issue extensively. He told me, “Five days a week in the office is unnecessary for productivity.”

It’s true that fully remote work — where an employee isn’t coming into the office at all — has mixed results. Some studies find that working from home all the time is less productive, but much of this research was conducted during the pandemic, when parents had children at home distracting them. Other studies, including one that tracked call center workers pre-pandemic, have found that fully remote workers are 13 percent more productive.

In any case, the ideal scenario for most “office jobs” is a hybrid approach that allows workers to be at home on some days and in the office on others. Hybrid work has not been found to impair productivity. Many workers are able to get more done on days they are at home because they don’t waste an hour or more commuting. It’s also worth pointing out that return-to-office mandates have not been found to boost a company’s financial performance.

There is one thing that five-day mandates typically accomplish: They make workers angry enough to leave. “If you need a bunch of people to quit, this is what you do,” said Jose Maria Barrero, an assistant professor at Mexico Autonomous Institute of Technology’s business school and one of the leading experts at WFH Research. Often, it is the most talented workers who leave, because they can easily find jobs elsewhere.

For now, Amazon is in the minority. Only a handful of companies — including Boeing, UPS, Chase and Tesla — have attempted fully in-office policies for corporate workers. The vast majority of Fortune 100 companies have hybrid work arrangements. In August, 27.5 percent of work days in the United States were done remotely, which amounts to one or two days a week at home. This percentage has stayed roughly the same for the past two years, suggesting that hybrid work has become the new normal. The reason is simple: It’s a great recruitment and retention tool.

Workers love having flexibility. The ability to work from home has enabled them to exercise more, spend more time with their kids and get more laundry done. They are using the time they would have spent commuting on leisure pursuits, which makes for happier, more loyal employees. On employment websites, a sizable share of job seekers start by looking exclusively for remote or hybrid roles, said Nick Bunker, research director at Indeed Hiring Lab.

The experts I spoke with agreed on one sensible recommendation for CEOs: Embrace hybrid work and let managers decide which days the whole team should be in the office. What frustrates employees is when they trek into the office only to sit at a computer when they could have done the same at home. People want to come in for meetings, special collaborations and networking. The research on hybrid working underscores how important it is to use people’s time wisely.

New Starbucks CEO Brian Niccol is a good barometer of what top bosses are saying — and doing — about work arrangements. “We’re all adults here," Niccol told employees this month, according to Bloomberg. “You need to figure out where you need to be to get your job done, then do that.” Starbucks has a three-day in office requirement and Niccol is allowed to work remotely if he wants.

Still, the leverage in the employer-employee relationship is clearly shifting. In the hot job market of 2022 and 2023, applicants had the upper hand. Companies aggressively raised pay and offered more flexibility, whether it was hybrid arrangements or the option to work part-time factories. This helped draw people back into the labor market, especially mothers, and there’s real concern that women might feel they have to quit if they lose all flexibility. The hiring rate has fallen to its lowest level since 2014 (the tech sector was one of the first to pull back on hiring), and companies are already dropping pay for some positions.

With this recalibration, raises and bonuses are likely to get skimpier. But as long as Nvidia — the hottest company on the planet — keeps allowing workers to be fully remote, other companies will struggle to move entirely in the opposite direction.