There's one question on every business leader's mind: do I make my people return to office? This guide walks through the pros and cons for the most important decision you'll have to make this year.

I've spoken with more than 50 leaders at remote and hybrid companies over the past month. These are CEOs, COOs, CTOs, CHROs, from startups through post-IPO companies, and there's one question on everyone's mind: "should my people return to the office?"

By now there are some folks pretty loudly advocating for a full return to a physical office. There are still others who view a strict office requirement as totally implausible. Finding the magical middle ground through hybrid work models or some other remote work solutions seems to be the goal for many companies, but it's easier said than done.

One thing is clear: there isn't an easy answer. This guide delves into the nuances of RTO, outlining its advantages (and the reasons why remote work is holding back so many companies), as well as the drawbacks of returning to the office. The goal is to help you navigate one of the most important decisions facing business leaders and remote workers alike, and walk through some of the best potential solutions for your people and company.

Understanding RTO: The basics and how we got here

What is RTO?

To make sure we're all on the same page, RTO, or Return to Office, refers to the policies and strategies companies are implementing to bring employees back to their physical office space after (sometimes long) periods of remote working.

Why is RTO gaining traction?

The short answer is that remote work is bad for most companies. There are three main reasons why:

1. Communication and coordination costs in a remote work environment

The halo effect

There was a halo effect around remote work when it first started. Everyone felt the time saved through not needing to commute to a physical office. Similarly, it was clear to office workers that when they were outside of their office space, and the many distractions therein, there was way more heads down time to get work done.

The reality

The problem is that there are massive communication and coordination costs involved in making remote work, work. When you're in an office, you ambiently absorb information by the desks, on a walk to lunch, in a quick chat. Sadly, these all translate to written communication (or worse, scheduled Zoom calls and virtual meetings) in remote work:  daily stand-ups, end of day summaries, emails flying around the company, endless Slack channels, MBRs, QBRs, calls on calls on cals. These compounds exponentially as teams grow larger, or are highly matrixed.

In fact, managers in remote & hybrid are spending 54% of their time on information gathering and admin. That’s 20% of your headcount spend going to busy work!

2. A lack of personal connection outside a physical office

The death of the cult

Humans are social animals. When you put them together in groups, they bond. They discuss things. They come up with ideas and things bigger than themselves. They develop rituals and culture. This is how companies work. And many of the best performing companies have people that become irrationally motivated to do things bigger than themselves, and hit insane goals. Unfortunately a lot of this bonding, and the 'power of the cult' that comes with it is lost in remote working. And with it employee engagement, job satisfaction, and productivity suffers, building the case for RTO mandates.

Trust and transparency

Building personal relationships is about building trust. When you trust someone, you know that they have your best interests at heart. Anyone that has read Kim Scott's Radical Candor knows that trust and vulnerability is a core requirement for delivering constructive feedback effectively, and this is non-negotiable for high functioning teams. Again, many RTO mandates are driven by the feeling that teams are not able to move quickly through challenging situations and get to the right outcome with a lack of trust and fast feedback in remote work.

3. Productivity suffers, aka less stuff gets done (seriously).

This one feels most counterintuitive to leaders of hybrid work or a remote workforce when considering RTO mandate. Although there seems to be more time for 'heads down work', the end result of 1. and 2. is ultimately less fired up people, way more time going to stuff that isn't actually driving priorities forward (eg. reporting and admin), and ultimately less stuff getting done.

Although it can be hard to find conclusive studies on this given a lack of controlled testing, there are a few studies that point to a big drop in productivity:

• Your best people might be doing ok (even better), but 50% of employees have lower engagement and output. Some are hardcore quiet-quitting (Gallup).

• Employees are measured to be 18% less productive working remotely (MIT)

Some other important Pros of RTO

Creativity and collaboration yearns for physical interaction

Physical office spaces often provide a much more spontaneous environment for sharing ideas, leading to increased creativity and innovation. Office attendance means more overheard conversation, faster pace of ideation and iteration. In short it helps you innovate faster.

Making your company culture strong like ox

We talked about this above. This is how humans work, and it works best with office attendance. Regular interactions in a shared space foster a sense of community and belonging among office workers. That is key for employee engagement and satisfaction. For something that takes up ~50% of your waking hours, you might just find you enjoy it more too.

Ensuring younger talent is nurtured

You don't just become the vice president. You get there because you've observed, received feedback, been coached by those who have gone before you. In the sea of debate around office policies, this is often lost.

Creating way clearer boundaries between home and work

For many, the physical separation of a work environment from home life helps establish clearer boundaries, potentially improving work-life balance and mental health. This demarcation can prevent the blurring lines that often come with remote work, where personal and professional lives can become intertwined and employees feel like they need to be 'always on'.

So when you put the cons of remote together with some of the obvious pros of returning to the office, the decision seems obvious, right? Not so fast.

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Offices ain't all that.

The Cons of RTO (there are a few big ones...)

Commute really is lost time

The requirement to commute can be a significant downside of RTO mandates. A 1 or even 2 hour combined commute can really kill employees' life balance and overall job satisfaction.

Your real estate and operational costs take a hit. Hybrid isn't much better

Maintaining physical office spaces is a legitimate expense that you need to think about as a business leader. Real estate and operational expenses need to be considered seriously in an era when remote working has proven viable. Hybrid models can make this even more challenging, especially when CEOs look out over a large, often empty, office space.

Shock horror: most employees actually prefer working from home

RTO doesn't just automatically boost employee engagement. Many employees, particularly the best employees who can be trusted to work from home, may feel more disconnected from their work when forced to adhere to office mandates that disregard their preferences for flexibility and remote work.

This was actually highlighted in a recent study from the Katz Graduate School of Business, showing that high performing employees often perform worse when made to return to office. Many favor the work life balance, and flexibility to work from different parts of the world.

Hiring the best people, wherever they are.

The best people

The single biggest factor I hear from CEOs is that remote work means they can hire the best people, wherever they are in the world. Here at Village, we have an incredible French engineer who lives in Japan. Remote work makes that possible, and the results show in performance reviews.

At the right cost

There are many companies that lean on lower average wage regions with high talent density: engineers from Argentina, Operations employees from Kenya, designers in Sri Lanka that have come to make up a core contingent of teams, at a much lower cost than hiring in San Francisco or most major US or European cities.

The middle ground: why hybrid isn't winning favor

The theory behind hybrid: balancing flexibility with structure

A hybrid work model and other flexible work arrangements putatively offer a compromise, allowing for office attendance a few days a week, while providing the flexibility of remote work on certain days. This approach can cater to your diverse employee needs, promoting higher job satisfaction and engagement versus a strict office requirement.

It's hard to implement and double the 'costs'

However, creating effective hybrid work policies requires thoughtful consideration of office requirements, employee engagement strategies, and equitable treatment for all staff, regardless of their chosen work environment. This can be especially difficult when you have employees in many different cities, and even varying distances from an office within a city.

It also means in many cases you get the 'worst of all worlds' in terms of time and infrastructure costs. Employees not only have to commute a few days a week, but they're also still losing all that time doing the info sharing and communication overhead (slacks, emails, updates, video calls) that comes with remote since these need to be maintained. That gets even worse when your team is half remote, half hybrid. And all that is before the fact that you're paying for offices that are sitting empty half the time.

The key considerations for your business

Listen to your employees

A company is just a group of people motivated to solve a common goal. It is crucial that you are rowing in the same direction. You need to understand your workforce's preferences or there will be rebellion. Surveys and discussions can provide insights into what employees value most. That might be the camaraderie and culture of in office work, or it could be the flexibility of remote work. You need to make sure your office policies reflect this, or at least that your employees feel heard.

Make sure you have the right tools to measure productivity and performance

The impact of RTO on your overall company output,  productivity and performance reviews should be closely monitored. While some roles may benefit from a structured office environment, others thrive in remote settings. More on the right tools to do this shortly.

Make sure you think about mental health and well-being

Regardless of the chosen model, you need to think about and prioritize the mental health and well-being of your employees. And the answer here isn't always working from home is better for mental health. At the very least, you need to be thinking about what is the most supportive work environment, whether physical or virtual. When trust and support are there, people feel nourished, nurtured and do their best work.

So what decision did we make for RTO? It's called Atlas.

As we've discussed, RTO is an existential question for most remote and hybrid companies.

We value insanely talented people hitting insane goals. 

 Our team is fully remote. It means we can hire awesome people. (Hello Martin, our incredible French engineer in Japan). And most of our team doesn’t want to go into the office. Some of our best people can't.

But at the same time, we experienced most of the same problems that all companies face with a large contingent of remote workers: communication and coordination costs go way up, empathy and connection goes way down.

So what's this Atlas thing?

That's why we built Atlas. Atlas is a pretty magical thing. It connects to all the tools your team uses everyday - Slack, Jira, Trello, Google Workspace, Hubspot etc - and uses an AI to synthesize all their data, content, and activity, into highly actionable insights, summaries of workstreams (‘what did this team get done last week? what’s planned? where are they blocked?’), reporting, and highly engaging personalized profiles (I promise they’re fun). 

What's the end result?

Atlas gives everyone on your team an unbelievable pulse on the company - a feeling that they are part of a living, breathing organization that is firing on all cylinders. It lets individuals better connect on a personal level. It radically improves information flow. It massively increases velocity and lets the company unlock peak financial performance. Atlas may not be for every team, but it's certainly made a 10x improvement to our own productivity and connectivity, and meant we've been able to avoid any RTO mandates at Village. It's as connected as we can get without in person work.

Conclusion: To RTO or Not to RTO?

The decision to return to the office, continue with remote work, adopt a hybrid model or implement an emerging tech solution like Atlas is a hard one. Every company is going to have a slightly different answer based on overall engagement, the importance of work-life balance and job satisfaction, financial performance, and where your company sits in its lifecycle and trajectory.

While one size doesn't necessarily fit all, it's clear that the remote work genie is well and truly out of the bottle. In many cases there are just too many benefits of a remote workforce to put it back in the bottle with RTO mandates.

More and more business leaders that we talk to are adopting solutions like Atlas precisely because it allows them to capture all the goodness of being in an office, without any of the drawbacks of office mandates. Whatever solution you land on, this will be one of the biggest decisions your company has to make. Choose wisely.