this post was submitted on 29 Jan 2024
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Companies likely lose money with more workers in the office. More electricity, more water, more supplies. More unhappy employees, more tired employees, more good employees looking elsewhere for WFH jobs.
Probably sunk cost fallacy with the lease. Building is paid for, why not use it and also be better able to micromanage your drones?
In many cases they don't even own the building!
The leases are often very long term like 5-10 years. So they are locked into paying for the building or risk hurting the company’s credit lines. So in a sense, they have paid for the building use. Which I think was OP’s intent, since they mentioned the lease.
Sure but leaving it empty until the loan expires is still cheaper. My point is, in most cases it's not the company's problem if the building they have their office in loses value because it's empty and no one wants to renew their contract, so why force employees to go back?
You’re right, and you’re pretty much describing the sunk cost fallacy as well.
They probably don’t save much money that way though. You stop have to keep the place warm enough and clean enough to prevent mold and frozen pipes. Many are in bigger buildings with cleaning, maintenance and security contracts.
I suspect as dumb as it is, the moronic managers still think micro-managing makes up for the 5-10% cost of employees there (might even be less in some offices). And as said before, they usually at best break even, while alienating the smarter employees who go find wfh jobs.
The implication is that when those leases come up over the next few years, office space will be cleared out, and we'll see companies give up on return to office mandates. We'll have a glut of commercial real estate to rezone and convert into residential apartments (either total rebuild or remodeling the existing space, depending on the building). Work from home should settle into a constant rate, perhaps even slowly growing as more workers come to expect it.
I see so many light thinkers arguing that this is all about real estate. Jesus fuck.
As a manager, I can tell you it’s not about management. None of us asked for return to office. In fact the vast majority of managers at my company have been pushing back hard, which is the only way we got a hybrid schedule. It really comes down to being all about real estate, local taxes, optics, C-levels stuck in the old ways of doing things and wanting to return to “the good old days”.
I don’t give a crap where my employees are working as long as they get shit done and can reply during business hours when shit hits the fan.
They are holding bags that they want to get rid of before they need to accept the capital losses after assuming office real estate would be a sure bet and then the world changed in March 2020.
Enlighten us then, keeper of secret wisdom.
Fucking look up “sunk cost fallacy”.
Yup. I'm content with my usage. You want to elaborate and contribute or keep vagueposting?
Looks like a classic sunk cost fallacy to me. They pay that money no matter if the offices are filled or not.
Yep. I'm all about denouncing profit motive, but authoritarian motive is probably the worse force.
It's also to do with the fact that most research looks at company profit. But if you follow the paper trails, most of the high level managers that insist on return to office are investors on commercial real state ventures and/or funds that invest in these downtowns and office spaces. It's bad for the company, but it's good for their personal wallets. The authoritarian high is a plus.