Before the covid pandemic, unemployment hovered around all-time lows which forced companies to make worker-friendly concessions. That's when you saw retailers like Walmart (WMT) and Target (TGT) begin pushing toward a $15 an hour minimum wage, which was something many other companies had to follow.
Now, to be clear, companies only pay the money they need to pay in order to meet the company's, not the workers', goals. Even a progressive retailer like Costco (COST), which has long paid above-market rates to its employees, does not do so out of benevolence, it does so because it's good for retention.
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Those years, and really some of the period during the pandemic, gave workers something they rarely hold over their bosses, leverage. When it's hard to hire people for open jobs, workers can negotiate better wages and better conditions of employment.
Covid made working from home a requirement in many white-collar fields because it wasn't safe or practical to make people come into an office during the height of the pandemic. And even as vaccines became available, many companies still faced a labor shortage so they allowed workers to stay home.
Now, with the layoffs across the tech field and the general uneasiness about the economy (despite continued low unemployment) workers have largely lost the leverage edge they once enjoyed. That's allowing major employers to force people to come back the office.
That's a hammer Amazon (AMZN) CEO Andy Jassy has decided to wield and when a company that large makes coming into the office a requirement. That provides the needed cover for pretty much every other business to do the same.
Image source: TheStreet
Andy Jassy Wants Amazon Workers Back in the Office
Jassy shared that Amazon expects its office workers to be back in the office at least three days a week in his second-ever letter to the company's shareholders.
"We also looked hard at how we were working together as a team and asked our corporate employees to come back to the office at least three days a week, beginning in May.," he wrote.
The CEO acknowledged that remote work had been successful, but made it clear that he's not in favor of it.
"During the pandemic, our employees rallied to get work done from home and did everything possible to keep up with the unexpected circumstances that presented themselves. It was impressive and I’m proud of the way our collective team came together to overcome unprecedented challenges for our customers, communities, and business. But, we don’t think it’s the best long-term approach," he shared.
Jassy added that he believes the collaborative nature of Amazon makes in-person interaction important.
"We’ve become convinced that collaborating and inventing is easier and more effective when we’re working together and learning from one another in person," he added.
It's a move that disregards an awful lot of research that will be used by a lot of CEOs to make coming back to the office mandatory.
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While you can find research that supports what Jassy is saying, an awful lot of studies have shown that at-home workers are actually more effective than office workers. (But clearly, the data is mixed as the subject has not been studied for a long enough period).
"Several studies over the past few months show productivity while working remotely from home is better than working in an office setting. On average, those who work from home spend 10 minutes less a day being unproductive, work one more day a week, and are 47% more productive," Apollo Technical shared in an article that pulled together data from numerous reports.
And while Amazon -- largely a company that traffics in data -- wants to bring workers back to the office based on a feeling, research shows that people who work from home are both happier and more productive.
"A study by Stanford of 16,000 workers over 9 months found that working from home increase productivity by 13%. This increase in performance was due to more calls per minute attributed to a quieter more convenient working environment and working more minutes per shift because of fewer breaks and sick days. In this same study workers also reported improved work satisfaction and attrition rates were cut by 50%."
It's certainly possible that long-term data will show clear benefits to in-office work, but it's unlikely that increased employee happiness will be one of them. Companies like Amazon (but most certainly not only Amazon) want workers back in the office based on the belief that it will be good for the company.
Nobody, Jassy included, is arguing that it's better for the workers.
