- DOGE has proposed eliminating remote work for federal employees. But new data from University of Pittsburgh business administration professor Mark Ma suggests RTO policies tend to push out the most talented employees—and they are harder to replace than entry-level workers.
Elon Musk and Vivek Ramaswamy’s dream of eliminating work-from-home options for 94% of federal employees—in hopes of encouraging workers to quit, thus shaving trillions from the federal budget—may backfire, new research from the University of Pittsburgh suggests.
A working paper from associate professor of business administration Mark Ma and colleagues found that prominent technology and finance companies who implemented return-to-office (RTO) mandates lost their most skilled and senior employees. When they tried to fill job vacancies left by those workers, they had a harder time doing so.
From a universe of 54 companies in the S&P 500 that implemented RTO mandates between April 2020 and June 2023, Ma et al. looked at 3 million LinkedIn profiles to determine who left their firms after in-office crackdowns. Not only did these companies see a 14% jump in the rate of departures following an RTO implementation compared to their pre-RTO baselines, but the people who left the company were more likely to be women, mid- to top-level managers, and those with more skills listed on their LinkedIn profiles.
Employees have options
For workers who already have extensive résumés—and female employees with childcare responsibilities on top of their jobs—there are simply other, more flexible openings out there, Ma said.
“Who will leave? It's just the people who have other opportunities,” he told Fortune. “And these are the people with a lot of skill, with a lot of experience that corporations want.”
The headache for employers increases when they have to try to find replacements for lost talent. The time it took companies to fill job vacancies increased about 23% on average compared to pre-RTO baselines, according to Ma’s analysis of more than 2 million job listings. Those companies also saw a 17% drop in hire rates.
These findings are relevant to Musk and Ramaswamy’s goal for the new Department of Government Efficiency (DOGE) to reduce “government waste” by $2 trillion. One of their earliest proposals is to thin the ranks of government workers by implementing unpopular employee surveillance and in-person work rules. Experienced staffers are likely to leave first, possibly going to the private sector, Ma warns.
View this interactive chart on Fortune.com
RTO’s unintended consequences
Increasing employee churn is also expensive, Ma said. “If there is a significant turnover inside the firm, it definitely disrupts the firm's operations and also in the new cost of hiring new employees, including the cost of training,” Ma said.
To attract competitive candidates, employers often offer to pay new hires more than existing workers in the same positions. Once those new employees are aboard, the training they need represents an initial drain of time and money. According to data from the Association for Talent Development, employee training takes an average of 33 hours and more than $1,250.
Amazon and Walmart
Amazon and Sam’s Club, a unit of Walmart, are among those who recently demanded their employees stop working from home.
Amazon CEO Andy Jassy denied the company’s RTO policy was designed to push out employees. The change is a way to enhance company culture, he said, and Amazon has no plans to reduce headcount. “This was not a cost play for us,” he said in an all-hands meeting in November. “This is very much about our culture and strengthening our culture.”
More than 70% of Amazon workers said they’d consider quitting after Amazon announced they’d be required to work five days in the office, according to anonymous job review site Blind, which surveyed 2,585 verified Amazon employees the day after Jassy’s RTO memo.
RTO can also discourage the most senior employees. Cheryl Ainoa, Sam’s Club’s chief technology officer, resigned reportedly because she refused to relocate to parent company Walmart’s HQ in Bentonville, Arkansas, following an RTO push. Ainoa cited “personal reasons” as to why she left.
Walmart did not respond to Fortune’s request for comment.
Ainoa’s departure was typical, Ma said. “We also found increased turnover among the top management team members.”
