> The RTO is being entirely driven from the top by institutional investors wanting to avoid losses on property investments and from the bottom by those who have yet to grapple with the fact they dont have friends or hobbies and need you in the office so that they dont feel like such embarrassing losers.
I know i'm supposed to "contribute to the conversation" but it's important to recognize that the above point is exactly right.
IDK, I don’t think real estate part is entirely true. It’s often quoted but most companies have very little RE as a percentage of revenue or whatever metric you think makes most sense. Many more are just leasing RE and could easily have exited that position by now. Even a one time write off could be spun as a positive thing. These properties can be repurposed and have continued value without their corporate tenants.
There’s no grand conspiracy where executives are helping boost the holdings of REITs and institutional investors. Executives as a “class” and a “job” just like the traditional butts in chairs approach to work. They have to think about the entire company and it’s easier to have a singular approach. Instead of bespoke approaches by team/department/title where some people are RTO and some WFH as that quickly reverts to everyone is on zoom/teams for every meeting because of the remote people.
WFH has also provided a whole host of new and unusual problems for HR. I’m sure most executives are just tired of hearing about it. In my own experience/approximation only about 1 in 3 people are can actually self manage in a way that’s needed for remote work to be effective. I think software development is a very specific job that is very well suited to WFH but most other jobs within a company are not.
The alternative to REIT consipiracy is that execs have run the numbers and loss from remote work is greater than the loss from office work. Painful.
Headlines don't support this, articles only get clicks when celebrating remote work. But there is a very clear disconnect where headlines are saying "remote work is more productive" and executive surverys are saying "we are moving back to offices".
Execs (on the whole, not anecdotes) don't hate money and productivity. If remote work was so much better, they would be rushing to it at breakneck speed. Instead the opposite is happening.
HN Note: Only a small fraction of workers are developers or work in IT. The white collar workforce is huge an varied. The remote vs. RTO debate is about workers on the whole, not just the small sliver that are devs.
I have to disagree. History has shown over and over again that MBAs don't need to be intelligent or understand the business to get to highly paid and powerful roles. Similarly, you can be an idiot and still succeed in becoming the president of US.
RTO is dictated by those people because without the headcount in the office it's plain and obvious that most of their "work" is illusory and provides no value beyond giving them means to build their kingdoms. RTO is mostly about self important and self-preservation of this whole class.
One of the larger companies I'm most familiar with is definitely not renewing leases on a fairly widespread basis. I'm sure some companies feel they're locked in for some reason but it's just not universal.
I disagree. When you calculate the total spend of a company on Google on real estate then multiply it by their PE ratio and now that spend now has 0 return instead of 30x or so you get a pretty large double digit percentage of their market cap in delta value.
I think you are trivializing a pretty huge risk on the global markets.
Google is chump change to the global commercial RE market.
I’ve worked with/on dozen or so executive teams, public and private, bought sold RE and leased/renewed RE at most of them. Nobody cares about the landlords or the shareholders of those companies. It’s actually an adversarial relationship just like most tenant/landlord relationships. Each party is looking out for themself.
The math makes no difference when all you care about is yourself. The executives are wanting RTO because they feel like that’s what’s in their company’s best interest. I’m not buying into the grand conspiracy theory that’s floating around.
You can maybe make the argument that regional banks want people back in the office because they have self interest in commercial real estate as a whole but outside that the argument is brain dead stupid IMO.
To me, it is all so simple. Does the micro manager to a fault know they are a micro manager? Of course they do but they can't help it. It is strategic and a trade off. It is the same exact thought process but just applied at the company level.
Not necessary the company directly, but could be parent company, stockholders. What value would office buildings retain if there were no one leasing office spaces? They would be burning money by maintaining the buildings.
Where I live there’s a big movement of office->residential. It’s not free. Should it be? Was it a risk free investment? I’d argue no and no, and mention they’ll likely be better off financially as we have a shortage of housing and an excess of commercial in my market
Sure, let's say it is shareholders. So these shareholders (diverse, distributed groups) get together and collude to pressure their investment companies to sacrifice performance (WFH) for the benefit of the shareholders' other investments?
Another factor is that large employers in city centers are getting some political pressure to bring people back into town. Commuting is a major prop to city economies and tax bases.
What does this pressure look like, in practice? Sternly written letters? Phone calls? What power does a city have over a private employer when it comes to employment decisions like this? If remote is everything people say it is, the cities should have no power to overcome improved performance and lower (in the long run) costs (due to lower or nonexistent rent)
Lots of companies get tax breaks, and a city can threaten to take them away if they don't bring employees back to the office.
"Of the billions in tax incentives granted to US companies every year by cities and states, many agreements require workers to come into the office some of the time, or at least live in the region. For companies receiving these incentives, relaxing in-office attendance could be costly."
"New Jersey paused its on-site requirement when Covid hit. Last summer, though, the state announced that companies receiving those benefits must bring employees back to the office about three days a week — a lower bar than before, but still challenging for firms struggling to hang onto workers in a red-hot labor market."
"The state [of Texas] said it will revoke benefits granted under the multibillion-dollar Enterprise Zone Program to companies whose employees no longer work on site at least half the time."
The article does go into pushback the states are getting from companies for imposing these, to be fair, but it's clear they have some levers to pull in order to coerce companies to bring employees back to the office.
Think about it as if it was a private golfing club, where these guys (corporate executives, real estate developers, bigshot investors, local politicians and officials, chief of police, county and city judges) all hang out in the same bar and play golf together, and shoot the shit with each other, and go to each others' kids' soccer games and so on. I'm sure there's a lot of peer pressure for them all to kind of get along and scratch each other's backs so that everyone can profit at the expense of the rest of us schmucks who are not in the club. A phone call is probably the most formal that it would get!
I think this is mostly it. But a little more generously, a lot of business leaders do have civic pride and if remote work is going to collapse the city's tax base, that isn't about personal profit. There are practical and emotional reasons why politicians, business leaders, educational and healthcare institutions, non-profits etc. would not want this. And this all trickles down to voters - people don't want to live in a crappy place!
I am not sure why you, and others in this thread, keep stating a performance boost. Workers claim a performance boost while actual performance suffers pretty greatly
I don’t personally believe there is an actual performance boost. I think I is the opposite, and even where it might exist at the individual level I think it is certainly (to my eye) incorrect at the team and company level.
But I won’t make that argument because it is the third rail of HN comments. So I make all my arguments assuming WFH improves productivity.
You can also stipulate that short-term productivity didn't take a major hit for the most part while having concerns about onboarding junior people, reduced level of engagement on teams, weakened company culture, etc. It's hard to separate out other factors but it sure feels like that to me.
More amusingly, not that long ago my direct boss was denying it was the case, but it was not until recent RTO call that he ( and his boss ) finally admitted something along the lines of 'yeah, we got commercial real estate on our books so like you know, we should do our part'.
So yeah, I am told to subsidize failing real estate without getting anything in return. Won't I think of the poor, poor investment managers and their real estate? Why would I? Do they think about me?
When it comes to gains and profits, the shareholders are supposed to benefit. When it comes to losses and difficulties, the employees are supposed to 'do their part' and shoulder them.
also important to read the nuance of them "feeling" like losers. Obviously if you're working in tech there's little chance of you actually being a loser in your career (which is probably the most difficult place to find success) so really they'd just need to put some effort into being social and these people would be doing well for themselves, however, in-office can be a huge crutch for people to pretend like they have a social life.
It's not odd at all that people in a similar situation tend to act the same way, particularly when they can see how the others act and realise that following the crowd is the best way to not get fired.
Many companies would benefit financially by reducing their office footprint and thereby paying less rent. The idea that boards everywhere would sabotage their own companies to appease commercial real estate investors is tinfoil hat level stuff.
If you buck the trend that everyone else is following, maybe you really are the genius in the room. But that's probably not the way to bet unless your situation is unique for some reason.
Yes, they do. The board member croneyism keeping the working man down is a bit of a simple minded reddit fantasy - in the real world, public companies have a fiduciary responsibility to their shareholders. They don’t serve the interests of some hidden cabal.
If you notice that companies make similar decisions as a result of changing market trends (a global pandemic, for instance) it’s probably because those decisions were deemed the most financially sound. They weren’t colluding to screw over employees.
In the real world, public companies rely on financing for a heft of their operations. Financing is controlled by the investor class only a simple reddit mind could possibly believe exists
In theory, if there is such a thing as a "self" to have an interest in. The idea breaks down when the same 30 people sit on the board of directors of every publicly-traded company in a particular sector and also own all the property.
OP forgets ‘institutional investors’ is code for the pooled retirement funds of the vast majority of residents, as well as the institutions who hold much of the sovereign debt, which is generated to pay for social services, war, etc. It all comes down to those who are presently working supporting those who presently don’t.
I know i'm supposed to "contribute to the conversation" but it's important to recognize that the above point is exactly right.