Companies that focus solely on office mandates rather than work effectiveness risk losing talent ... [+]
Companies worldwide are doubling down on return-to-office mandates, requiring employees to commute at least four days a week. The resulting tension makes great headlines, but does it make great business?
New research from McKinsey & Company suggests it does not. Employee satisfaction across the spectrum of work arrangements—remote, hybrid or in-person—remains consistent.
The real problem? Work experience is lagging. Burnout is high, intent to quit is rising, and leaders and employees do not see eye-to-eye on organizational effectiveness. How can this be fixed? Leaders must stop obsessing over where work gets done and start improving how it gets done.
The latest McKinsey talent trends study is based on a survey of 8,426 employees and 3,531 executives across 15 industries in the United States, conducted in October 2024. The survey covered people working remotely (4+ days at home), in a hybrid model (2-3 days in the office), or primarily on-site (4+ days in the office).
The new findings and recommendations for leaders are informative. However, they also validate deeper forces shaping the future of work, which have been revealed over time through five previous McKinsey studies since 2021.
McKinsey on Flexible Work: The Story So Far
McKinsey has closely tracked the challenges organizations face in balancing flexibility with performance. Their research highlights one clear trend: the tension between where employees work and how effectively work gets done has been growing.
Great Attrition’ or ‘Great Attraction’? The choice is yours. (2021)
McKinsey’s first post-pandemic “talent trend" report found that 40% of employees considered quitting, even without another job lined up. Executives focused on transactional fixes rather than addressing deeper human needs.
Americans are embracing flexible work—and they want more of it (2022)
Nearly 90% of 25,000 working Americans surveyed said they would use workplace flexibility when offered. Striking a balance is hard for some organizations as they hesitate to commit the financial and leadership resources necessary to make hybrid work sustainably.
Flexible work survey: Is your organization ready? (2023)
A study of 50 workplace executives revealed that many leaders are "preoccupied with the ongoing debate about days in the office rather than their capabilities and strategies.” For example, they had yet to create a firmwide vision or playbooks for ways of working.
Some employees are destroying value. Others are building it. (2023)
Employee disengagement and attrition could cost a median-size S&P 500 company between $228 million and $355 annually. "Thriving stars"—the most engaged and high-performing employees—flourish in hybrid and remote models, but managers struggle to measure employee effectiveness without a bias toward presence, amplifying thriving stars’ impact without sacrificing their commitment.
Hybrid can be healthy for your organization—when done right" (2024)
Fully remote companies like GitLab demonstrate exceptional organizational health “through clear values, transparent decision making, and intentional ways of working.” Organizations with any workplace arrangement can thrive with sufficient leadership commitment to work practices and employee experience.
Collectively, these reports have a clear theme: organizations still struggle to improve work effectiveness and battle burnout across all workplace models. Bosses have asked employees to work hard adjusting to new realities and policies; the ball is in the leaders’ court now.
McKinsey’s Latest Report: More Office, Same Problems
McKinsey’s latest report suggests that “better together” policies seem to work; the proportion of respondents working 4+ days in the office has doubled since 2023, from 34% to 68%. Unfortunately, this increase in togetherness hasn’t translated into significant gains in workplace effectiveness.
The report finds that 39% of employees intend to quit—nearly as high as during the “Great Resignation”—with Gen Z employees even more likely to leave, particularly when on-site or fully remote. One-third of workers report experiencing burnout, and the impact of burnout is slightly higher for remote and on-site work (36% and 35%, respectively) and somewhat lower in hybrid models (28%).
Unsurprisingly, older employees report higher satisfaction with on-site work than their younger colleagues. Nevertheless, employees across all work models report similar satisfaction levels, which debunks the belief that bringing people back in person automatically enhances engagement or retention.
Worse still, leaders consistently overestimate their organizations’ maturity regarding the very factors used to justify returning to the office. In contrast, employees evaluate their companies much lower on these essential workplace practices, no matter where they work.
Five Key Practices for High Performance
The new report highlights five key workplace practices that drive productivity and engagement. Their importance transcends work location, but employee expectations may vary depending on their situation and organizational goals.
- Collaboration – Effective teamwork requires intentional structures, not just physical presence. Employees in all models ranked goal alignment as most critical for role and strategic clarity.
- Connectivity – Employees need meaningful interactions, especially with leaders. Unfortunately, 90% of leaders view connectivity as a mature practice, while only 67% of employees feel positively.
- Innovation – To achieve competitive advantage through innovation, companies must create a culture of knowledge sharing, rapid iteration, and permission to fail. How leaders must show up—literally and figuratively—to support innovation varies by workplace model.
- Mentorship – Effective mentorship is required across all workplace models, using a mix of formal and informal interactions, but on-site employees expect more immediate and direct mentoring relationships.
- Skill Development – A culture of continuous learning begins with formal training but must advance to comprehensive reskilling and upskilling to support more flexible career paths and digital transformation.
With Great Power Comes Great Responsibility
The balance of power may have shifted back to bosses, but, as Voltaire said first and Spider-Man famously learns from Uncle Ben, “with great power comes great responsibility.”
No matter what workplace model a given employee finds themselves in today, the past few years likely opened their eyes to the power of choice and flexibility and the chasm between modern hospitality and retail-oriented experiences and the (mediocre) vibrancy and community in a traditional office.
McKinsey’s latest study found that a 34% of on-site employees believe they “put substantial effort into their work and consistently stay focused while working,” but only 29% and 28% of of remote and hybrid workers feel the same. For GenZ workers in hybrid arrangements, it’s slightly higher than the other groups.
So employees believe they are doing the work, and they may accept that flexibility is a reward for objectively high performance. If executives believe the purpose of the office is to accelerate innovation, connectivity, and mentoring, they are on the hook to ensure it does. Leaders must model new behaviors, invest in workplace experience, and learn to measure outcomes without a bias for presence.
Employees may quit as soon as the power pendulum swings back.
McKinsey’s latest research makes one thing clear—return to office does not automatically improve workplace effectiveness. Its previous research demonstrates the power of clear working norms and leadership behavior. Leaders who over-index on return to the office risk alienating “thriving stars” and worsening burnout, while those who prioritize how work gets done can build high-performing teams. The path forward isn’t about the office mandates but the operating model.
Disclaimer: The author of this article was a Senior Expert and Associate Partner at McKinsey & Company from 2021-2024 and involved with the research reports mentioned in this article and published in the same time frame. He was not involved with or aware of the latest research until the week of publication.
