More big companies are urging their employees to get back into the office, though real estate industry professionals say it may take some time and more efforts for the push to change the course of remote work.
Bank of America became the latest corporate heavyweight clamping down on its in-person mandate, telling workers that they risk "further disciplinary action" if they do not begin adhering to the company's policy. In a recent letter to employees, the Charlotte, North Carolina-based bank warned of consequences if noncompliant workers did not begin showing up to the office.
"Failure to follow the workplace excellence expectations applicable to your role within two weeks of the date of this notification may result in further disciplinary action,” the bank wrote in a letter posted by a Bank of America employee and earlier reported by the Financial Times. Not making a regular appearance at a physical office means an employee will fail to meet the company's "Workplace Excellence Guidelines, despite requests and reminders to do so.”
Yet even with Bank of America and other companies' escalating mandates, some employers could be waging what is expected to be a more drawn out push than they want in getting their workers to return to physical office space, according to some industry professionals who study workplace use patterns.
"Hybrid is absolutely entrenched and for a variety of reasons," Kay Sargent, global architecture firm HOK's director of workplace design, told CoStar News. "The carrot is being replaced by the stick, and more people are putting in mandates because they’re not getting the attendance rates they’d like. A lot of our clients have come to realize this might be their new reality."
Bank of America employees are required to commute to an office at least three days per week as part of the in-person policy the company formalized in October 2022. Some positions including those in the financial center, sales and trading, investment banking and other departments that deal with clients have to work from an office for the full five-day workweek.
The company didn't immediately respond to a request to comment from CoStar News.
Across corporate America, a number of big companies have cracked down on their in-office policies as some say they are concerned with shortcomings in the results of remote-work policies that dictated most employees' schedules throughout the COVID-19 pandemic.
Kroger, UPS, Amazon, Alphabet's Google and others have ramped up efforts to get workers back to physical office space, deploying a mix of strategies that include attendance-tracking apps, asking employees to relocate and threats to link in-person time with annual performance reviews. WebMD's parent company produced a movie that recently came under fire for mocking remote employees and threatening those who refused to return to the workplace.
“We aren’t asking or negotiating at this point. We’re informing,” Internet Brands CEO Bob Brisco said in the video, adding that the company — which also includes Medscape, Lawyers.com and CarsDirect — is now among those getting "more serious" in demanding employees return to the office.
'New Normal'
A tight labor market, ongoing pandemic concerns and an aversion by some people to working in an office led many employers to offer some flexibility for people who don't live near a company outpost, especially if those employees were hired in the early years of the pandemic on a remote-only basis.
However, that flexibility is growing more scarce as the job market cools, providing companies with more leverage to implement firmer in-office policies and make better use of their real estate, office industry professionals have said.
Bank of America, for example, occupies more than 23.7 million square feet of office space alone, according to CoStar data, a figure that doesn't include its retail property around the country.
Despite the escalated mandates, Stanford University economics professor and remote-work analyst Nick Bloom said work-from-home growth levels have "become flat as a pancake," an increasingly permanent fixture dealing substantial effects to the commercial real estate market as flexible schedules take on an increasingly permanent role in today's economy.
The share of remote work has stabilized at just shy of 30%, Bloom said of the percentage of time employees spend working outside of an office each week. While that figure has dropped from its pandemic-era peak of more than 60% by the first half of 2020, Bloom said it still represents a fivefold increase compared to the ratios reported in 2019.
The complete effect of flexible and remote-work on the real estate market is still playing out. However, Bloom said the pandemic-induced shift in working arrangements has already contributed to rising home prices, a population shift away from major cities, and lower demand for office space.
"The future will see slowly rising levels of work from home," Bloom said. "This is the new normal."