What Amazon can expect from eliminating remote work

Amazon CEO Andy Jassy recently announced an office work policy that requires all employees to work in the office five days a week starting January 2nd^nd2025. In contrast to 71% of US companies offering hybrid work flexibility, Amazon's decision is speculated to be a cost-saving measure through natural attrition, avoiding layoff costs through employees' decisions to quit on their own. Regardless of the reason, here are three things to consider when transitioning from a remote work environment to an in-person work environment.

Difficulty recruiting top talent

Since there is no remote work option, the talent pool for future job opportunities is geographically dependent. Skills and location don’t always match. According to a January 2024 study by the Society for Human Resources Management (SHRM), 77% of 2,366 HR professionals reported difficulty recruiting for full-time positions, citing skills gaps as the primary reason. Inflexible workplace policies will only exacerbate these problems and make the hiring process even more complex.

According to a study by FlexJobs, the average remote worker saves $6,000 annually on transportation, childcare and related office labor costs, and 29% of hybrid and remote workers expect a raise when they can no longer work remotely. Companies should expect higher salary negotiations and relocation bonuses, increasing demand for in-office jobs compared to remote jobs.

Companies that eliminate remote work can expect a decline in both the quantity and quality of applicants. Top talent knows their worth and consciously choose environments in which they can thrive. They look for opportunities with continuous communication, trust and autonomy. Top performers will not work for companies that measure their success solely on visual proximity.

Decline in productivity

With every organizational change, there is initially a decline in performance (Figure 1). Many companies never get out of the resistance phase of change, with 70% of all organizational changes failing. Communicating the data and reasons for a change is an essential step in successfully implementing a change. But most companies don't take this action and never achieve productivity again.

Andy Jassy explained in his letter to Amazon employees that the reason for returning to the full-time office is to be “better positioned” to engage with employees and the culture. He doesn't address how remote work has failed in this regard, nor does he provide any evidence as to why the no-remote policy would be the best solution for this. Employees who are told a decision they disagree with or are not given an acceptable “why” will be discouraged from performing. When Amazon issued a three-day office mandate earlier this year, over 30,000 employees signed a petition calling for the mandate to be lifted, as well as letters asking them to provide data to support the decision to return to the office.

Studies continue to show that remote workers are more productive, even when they are sick. Companies that mandate return-to-work can expect an increase in sick days, for both mental and physical health reasons. The process of taking time off to attend to personal matters, such as: B. pick-ups and appointments at daycare lead to bottlenecks and disruptions in everyday work. Even the time spent moving from one conference room to another, rather than simply abandoning a Zoom meeting to jump into another, impacts individuals' workflow and productivity.

Weakened trust in leadership

With only 23% of employees trusting their leaders, it is essential for companies to make far-reaching decisions that build trust, not hinder it. Asking employees to leave their home office setup and instead use a shared office space sends a clear message: managers don't trust you unless we see you. Individuals will question their company's leadership decision-making abilities when organizational changes negatively impact the majority of the workforce. A loss of trust in leadership soon leads to a loss of interest in working in a company, either through leaving or “quietly quitting”.

Top performers question the status quo and bring in new ideas. This type of person is not interested in a suspicious and rigid workplace. Companies need to conduct a thorough self-assessment of their employees and listen to them before making organizational changes. A culture problem is not solved by forcing people to vacate their desks at home and secure an assigned seat in the cubicle.