IT services firms mandate a return to office…Will it backfire?

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2023 was the first annus horribilis for most IT service providers in decades, and many of these firms’ leaders are pointing toward their remote work setup as a reason for sub-performance.

Exhibit 1: The performance of many service providers plummeted in post-pandemic 2023

Data: HFS Research and public sources
Source: HFS Research, 2024

IT service companies have chosen the office route

With the return to normalcy, the challenge for leaders is to define the new normal for working. Most IT services companies seem to have adopted an office-centered approach, with most preferring two or three days of in-office attendance and others, such as TCS, winding the clock back to a fully in-office work culture. The key reasons cited for a push to the office include work culture, security concerns, underutilization of the workforce, mentoring younger employees, and loss of trust.

Below is a list of in-office requirements at leading IT services companies with a presence in India (based on publicly available information):

• TCS: TCS aims to roll back the clock to a pre-pandemic style of working. It has asked all its employees to work from the office five days a week, with March being the final deadline to comply with the in-office mandate.
• Infosys: Infosys has asked its employees to work from the office at least three days a week.
• Cognizant: Cognizant has not yet mandated a return to office, and senior leaders are deliberating on the topic. However, the company will likely encourage employees to return to the office.
• Capgemini: Capgemini has advised its employees to work from the office for two days a week. The company’s senior management has asked team managers to send “feelers” to coax their team members back to the office on all working days.
• Wipro: Wipro has mandated its employees to work from the office at least three days a week.
• Accenture: In August 2023, Accenture asked its employees to ensure they were working from their base location, signaling a move to hybrid working.
• HCLTech: HCLTech has mandated its employees to work from the office three days a week.

Mandates are not conducive to crafting exceptional employee experiences

A remote setup provides employees several advantages, including spending more time with family, avoiding office commutes, and having flexibility in work location and timing. An office setup makes it easier for leaders to mentor employees when they need help, fosters collaboration, and makes it easier for managers to manage their employees. It is the default mode of working.

The response varies depending on who is asked whether a remote or office setup is preferable. The variety of answers indicates there is no universal preference, and one size doesn’t fit all. Both modes of working undoubtedly have their pros and cons. As we return to normalcy, executives are charting the course for what the new normal at their companies should look like.

Most IT services companies have asked their employees to return to the office, but they have run into resistance. Not everyone has returned, and companies have issued ultimatums in response.

Mandates don’t create a great employee experience even when they are given with the best intentions. Employees may feel like they are being forced to come into the office and see it as a compliance checkbox.

Before the pandemic, most employees only worked from an office. During the pandemic, there was no choice but to work remotely. Having seen that there is a different way to do things, employees wish autonomy over where they work, which is why they resist mandates.

Employees don’t see benefits from return-to-office mandates

While mandates can improve office attendance numbers, a lack of employee buy-in may defeat the objective behind calling employees back to the office. In a February 2024 poll on LinkedIn of 463 employees who had received a return-to-office mandate, 40% said they saw no noticeable benefits with the return-to-office mandate.

Exhibit 2: Mandates haven’t resulted in noticeable benefits

Sample: 463 respondents who had received a return-to-office mandate, February 2024 LinkedIn poll
Source: HFS Research, 2024

In uncertain economic times, mandates may be met with compliance, but employees may remain disgruntled. Coffee badging, a trend where employees appear just long enough to grab a cup of coffee, has risen as a response to mandates. If such instances increase, the return-to-office mandates will backfire.

The workforce is distributed; the office needs to have a purpose

If going to the office means traveling two hours a day and sitting in a cubicle just to hop on Zoom calls, employees will see attendance as a compliance activity. On the days they worked in the office, Indian employees spent almost two hours traveling, and they were on the road 15% more than in pre-COVID times, according to InSync. The cost of home rentals in H1 2023 shot up by over 20% in India, according to NoBroker, a property platform. With time spent commuting increasing and the cost of rentals in properties close to offices rising, employees need to see the trade-off as worthwhile.

The workforce today is globally distributed. Even within a single country, office locations span multiple cities. With colleagues present across cities and geographies, the need to use technology to collaborate effectively will remain paramount.

There isn’t a right or wrong approach between remote, in person, or hybrid. There also isn’t a one-size-fits-all approach. A return to the office should not be seen as a return to how things were before the pandemic when it was the default working mode. Employees need to see going to the office as purpose-oriented, such as having in-person meetings with colleagues, participating in brainstorming sessions, or attending events such as learning sessions or collaborative workshops. Companies should also invest in ensuring good infrastructure in the office in the form of meeting rooms, collaboration areas, cafeterias, or transportation facilities. Efforts like this will increase buy-in.

Trusting employees presents a golden opportunity to become a preferred employer

When it comes to an employee value proposition, components such as compensation and benefits, leave policies, learning and development, career growth opportunities, and values are present across all companies in some form or another. In other words, they aren’t an outright differentiator today. The major companies resorting to mandated office days presents a golden opportunity for enterprises wanting to stand out from the crowd by giving employees flexibility on how and where they work.

Placing trust in employees to decide where they work best can help companies stand out from the crowd. Atlassian, a software company, embraced flexible working, allowing employees to choose where they worked from. The company has seen a 2x increase in the number of candidates applying per role and an increase of 20% in its offer acceptance rate. Most (91%) of its employees state that the flexibility in choosing where they work is an important reason why they stay, and 92% state it enables them to do their best work. The company has also seen an increase in the representation of women.

The Bottom Line: Stand out by putting trust at the center of the employee value proposition; make the office purposeful.

Even with the best of intentions, mandates can result in employees feeling they aren’t trusted to deliver on their work. By trusting employees and acknowledging that one size doesn’t fit all, organizations could stand out in an environment where return-to-office mandates are increasingly becoming the norm. Companies requiring employees to work in the office should ensure that going to the office is purpose oriented and isn’t seen as a compliance activity.