Heading for the exit: do RTO mandates target the wrong people?
Some large firms are leveraging strict return-to-office policies as a way to reduce headcount. But such a short-term strategy might be self-defeating when you lose the people you will need most
Evidence is mounting that large employers are using unpopular return-to-office mandates as a way to trim the headcount while avoiding the cost of severance pay. But the trouble with this approach is that RTO threats are indiscriminate – they run the risk of pushing the premium people you want to keep towards the exit while the ones you want to leave just sit tight.
Gartner was the first to highlight this potential organisational danger when it surveyed more than 2,000 knowledge workers on their intent to stay in their jobs if strictly mandated to return to the office. Its 2024 study found high performers were twice as likely as the average employee to quit their jobs. Women and millennials were also a flight risk, impacting talent retention strategies.
Long-run costs
Now Stanford University professor Nick Bloom has waded into the debate, prompted by US retailer Home Depot’s announcement that it will lay off 800 staff while enforcing five days per week in the office.
Bloom has commented: ‘RTO mandate can be a “free” way to reduce headcount in the short term—quits don’t require severance. But the long-run costs can be substantial. The people most likely to leave are often the people you most want to keep: top sales reps, AI talent, and strong product managers—because they have the best outside options. That talent drain can show up later as slower growth…. The key is being clear-eyed about the trade-off—cheap headcount reduction today, potential growth hit tomorrow.’
RTO isn’t the only lever companies can pull to engineer corporate layoffs – AI is also a major factor, in a practice dubbed ‘AI washing’. But RTO mandates strike deepest to the heart of corporate culture. As British workplace culture expert Bruce Daisley has pointed out, ‘We tend to join a job for salary, and quit because of the culture. Good culture makes us stick around and feel loyal. We’re seven times more likely to quit a job for culture than for money.’
Retention paradox
Where does all this leave companies using RTO policies as a blunt instrument to trim the workforce? Culturally at least, in a difficult place. Organisations face the prospect of a ‘frozen workforce’ as employees with fewer outside options decide to sit tight in their roles – not because they enjoy their work or are performing to a high standard, but because the risks of moving are too great.
As we describe in WORKTECH Academy’s report, The World of Work in 2026, having large numbers of ‘frozen’ workers masks a deeper fragility in the workforce. What looks like relative stability in the present is really storing up trouble down the road. Where staff retention is driven by uncertainty rather than commitment, everyday work becomes more constrained.
We describe this trend as the ‘retention paradox’ and it is backed up by various studies. Leapsome’s 2026 Workforce Trends report, for example, shows that one in four employees remain in their role primarily to avoid risk. Across the UK, US, Germany and the Netherlands, employees cite reduced flexibility as among the barriers to movement.
Clearly, mandating people back to the office will have an effect. In the short term, it may shed some staff and save some money. But business leaders must ask themselves – are we pushing out the very people on whom our long-term future depends? If the answer is yes, then the five-days-a-week office policy may be on shaky ground.
Access WORKTECH Academy’s report, The World of Work in 2026, here.
