Good morning!
The return-to-office war is apparently turning into the return-to-office bribe. Again. More and more CEOs want employees to return to the office full-time, according to a new CEO Outlook report from professional services firm KPMG, and an overwhelming majority plan to lure employees back with preferential treatment.
Sixty-two percent of the more than 400 U.S. CEOs surveyed by KPMG want to see their office workers return over the next three years. That’s a stark increase from the share of CEOs who said the same in 2022 (34%). Meanwhile, another 34% expect these workers to be hybrid in three years, down from 45% in 2022, and just 4% envision a fully remote work environment (from 20% in 2022).
To get workers back to the office, 90% plan to reward those who work in person with favorable assignments, raises, and promotions. That approach may be key to attracting and retaining employees, which the CEOs surveyed—and, separately, thousands of other organizations—identified as their top operational priority to achieve company growth objectives through the next three years.
“Just ordering everyone back to their desks is unlikely to sit well with workers used to hybrid, so the challenge is to find ways to ease their return and be clear why this is beneficial to them,” writes Jon Holt, chief executive and senior partner of KPMG’s U.K. business. “For businesses like mine, carrots rather than sticks are the best tools for this job.”
Some companies have already turned to financial or performance-based incentives, albeit by using them as the “stick.” Google informed employees via an internal memo in June that office attendance would be a factor in performance-based reviews, and the law firm Davis Polk & Wardwell told staff in March that their bonuses could get cut if they don’t comply with the firm’s hybrid policy.
Employees may actually be inclined to come into the office if enticed with financial perks. Thirty-eight percent of hybrid workers surveyed by communications equipment company Owl Labs said they’d commute to the office more often if their employer covered their transit costs. Another one-third said they’d do the same if their employer paid for meals, snacks, and beverages, and 28% would go in voluntarily if their employer subsidized their childcare or eldercare costs or provided on-site options for care.
That said, some are skeptical of these incentives and argue that over time, productivity may decline if employees are rewarded for compliance instead of performance. “High-quality employees will see that performance and productivity aren’t rewarded as much, and they’ll leave for companies that value performance and productivity over presentism and brown-nosing,” Gleb Tsipursky, CEO of the leadership consultancy Disaster Avoidance Experts, told Fortune’s Paolo Confino.
Paige McGlauflin
paige.mcglauflin@fortune.com
@paidion
