My latest in The Guardian
Announcements from major employers, including Amazon and Tabcorp, that workers will be required to return to the office five days a week have a familiar ring. There has been a steady flow of such directives. The Commonwealth Bank CEO, Matt Comyn, attracted a lot of attention with an announcement that workers would be required to attend the office for a minimum of 50% of the time, while the NSW public service was recently asked to return to the office at least three days a week.
But, like new year resolutions, these announcements are honoured more in the breach than the observance. The rate of remote work has barely changed since lockdowns ended three years ago. And many loudly trumpeted announcements have been quietly withdrawn. The CBA website has returned to a statement that attracts potential hires with the promise, “Our goal is to ensure the majority of our roles can be flexible so that our people can work where and how they choose.”
The minority of corporations that have managed to enforce full-time office attendance fall into two main categories. First, there are those, like Goldman Sachs, that are profitable enough to pay salaries that more than offset the cost and inconvenience of commuting to work, whether or not they gain extra productivity as a result. Second, there are companies like Grindr and Twitter (now X) that are looking for massive staff reductions and don’t care much whether the staff they lose are good or bad.
Typically, as in these two cases, such companies are engaged in the process Cory Doctorow has christened enshittification, changing the rules on their customers in an effort to squeeze as much as possible out of them before time runs out.
We might be tempted to dismiss these as isolated cases. But a recent KPMG survey found that 83% of CEOs expected a full return to the office within three years. Such a finding raises serious questions, not so much about remote work but about whether CEOs deserve the power they currently hold and the pay they currently receive.
Many of the factors contributing to corporate success or failure, such as interest and exchange rates, booms and recessions, and changes in consumer tastes are outside the control of CEOs. And the success or failure of technical innovations is, to a large extent, a matter of chance.
By contrast, the organisation of work within the corporation is something over which CEOs have a lot of control. The case of remote work shows that the CEO class as a whole failed to pick up an innovation yielding massive benefits before it was forced on them by the pandemic, and have continued to resist and resent it ever since.
The immediate impact of remote work has largely benefited employees, who save commuting time and are able to combine work and family more effectively. Some estimates suggest that the average Australian worker is willing to forgo up to 8% of their annual wage in exchange for the freedom to work remotely, and it may be much more valuable for those with high commuting costs, disabilities or unavoidable family commitments.
The logic of the labour market, in which CEOs presumably believe, implies that these benefits will be shared with employers. A worker enjoying a substantial benefit will not accept an offer from a rival company without such benefits, even at higher pay. In the end, pay and working conditions are, in the terminology of economics, fungible substitutes.
Studies on the productivity effects of WFH have had mixed results. But no one seriously suggests that any negative effects are sufficient to outweigh the benefits to workers. Rather, the claims made by CEOs largely rely on vibes – like the feelings associated with a busy office – or (what should be) irrelevant considerations such as the impact on CBD cafes. For a while it was suggested that remote work would create difficulties for new hires. But four years on, the opposite is true – many younger workers have never experienced the five-day-a-week office and may have difficulty adjusting to it.
The real concern driving CEO resistance is the fact remote work involves a previously unthinkable change in the way productive activity is structured and organised. If workers can do without the physical presence of managers, perhaps they don’t need managers at all, at least in the way they currently operate. The eagerness of CEOs and other senior managers to wish these changes away suggests that, at some level, they realise this.
As Gideon Haigh observed 20 years ago, the era of neoliberalism has been associated with the “cult of the CEO”. The office has been the shrine of that cult. In their plaintive call for a return there, CEOs are like declining deities who see their votaries deserting them.