Last week, automaker Stellantis and retailer Home Depot became the latest major companies to bring employees back to the office five days a week.
They join employers like Instagram, Paramount and Amazon in recent mandates to return to the office. About a third (34%) of all U.S. companies require employees to be in the office full time, according to the Flex Index, which provides workforce insights.
New rules are increasing tensions between employers and their teams. Although management touts full field work as conducive to efficiency, creativity and culture, it is the least popular system for all workers, especially the youngest in their 20s and 30s. Experts warn that this conflict could lead to employee burnout, disengagement and brain drain as top performers leave for better jobs and the middle class becomes increasingly stranded.
Together, Generation Z and Millennials, generally defined as those born between 1981 and 2012, make up more than half of the 170 million U.S. workforce and are the least interested in working full-time in an office.
According to Gallup data, only 6% of Gen Z workers want to work fully in-person, as do 4% of Millennials, 9% of Gen X, and 10% of Baby Boomers. Most workers prefer hybrid work, a schedule that includes both remote and in-office days each week, with a whopping 71% of Gen Z workers citing hybrid as their first choice.
However, with the job market tightening due to slowing employment growth and rising long-term unemployment rates in 2025, more workers are feeling pressured to comply with RTO obligations. U.S. employers added 584,000 jobs last year, making 2025 the worst year for total job growth excluding recessions since 2003, according to Bureau of Labor Statistics data, said Heather Long, chief economist at Navy Federal Credit Union. Additionally, although the unemployment rate has remained stable at 4.4% in December, the proportion of unemployed people who have been unemployed for more than six months (26%) has increased.
In December, just 40% of employees said they would quit or look for another remote job if given the mandatory RTO notice. That compares to 91% who said they would do so by January 2025, according to a survey of 1,000 MyPerfectResume employees. This shows that employees are getting used to returning to the office full-time, even if they are unhappy.
Jasmine Escalera, a career expert at Live Careers, an online career platform, said workers are “choosing to stay at work, hunker down and accept things that would normally be unacceptable,” including tighter attendance rules, increased responsibilities and lower pay raises.
Increased stress can lead to decreased engagement, especially among the youngest workers who are used to a world of hybrid work and value flexibility, but who have the shortest tenure and the most job insecurity, Escalera said, making workers feel isolated from their jobs and putting less effort into their work.
According to Gallup, younger workers have already experienced the biggest decline in workplace engagement since 2020, with Gen Z and young Millennials reporting the biggest declines in “feeling cared about, having opportunities to learn, and feeling like they’re growing at work.”
“My biggest prediction is that there will be more compliance with RTO obligations than before,” Escalera said. “But that compliance may not be because employees have an attitude of, ‘Yes, please bring me back to the office. I’m ready.'”
RTO rules could encourage top talent to leave even if the job market cools
While many workers may be holding on through gritted teeth, the new RTO rules could cause others to quit.
That may be important, said Nick Bloom, an economics professor at Stanford University who studies the dynamics of working from home. Companies may want some employees to voluntarily resign to reduce the cost of downsizing and layoffs.
“One way to reduce staff by about 5% to 10% is to have everyone work five days a week,” Bloom said. “For every additional person who leaves due to RTO, there is one less person who will need a redundancy package.”
Of course, leaders cite other reasons for asking employees to fully return to the office, including improving productivity, innovation and performance, developing skills and strengthening company culture.
“Face-to-face engagement enables more meaningful support for our store and field associates, drives results and strengthens our human-centered culture and inverted pyramid,” Home Depot CEO Ted Decker said in a message to employees last week.
Escalera says that bringing colleagues together can improve in-person company culture, as long as leaders strive to help people collaborate in the office and invite creativity and new ideas.
Mark Marr, an associate professor of business administration at the University of Pittsburgh, said leaders may feel more familiar and comfortable managing in an office, since going into an office five days a week was the norm for most people before the pandemic hit.
The recent RTO announcement could have a domino effect across the industry, he says. Executives who support the establishment of RTOs will be more vocal about strengthening time and attendance rules in their organizations.
However, these obligations can have unintended consequences. Those who quit under the new RTO rules tend to be top performers and experienced employees with a lot of influence, Marr says.
“More-skilled employees are 77% more likely to leave a company after an RTO mandate than less-skilled employees. Senior employees are also 36% more likely to leave a company after an RTO mandate than younger employees,” Ma said.
Her research also shows that RTOs are disproportionately displacing working parents, caregivers (often women), and people with disabilities who require workplace accommodations.
Anecdotally, Ma said he was already hearing about senior talent looking for new jobs following the recent series of RTO announcements.
“The vast majority of companies still allow their workers to work on hybrid schedules,” he said, noting that these employers will have an easier time attracting top talent.
Want to use AI to advance your work? Sign up for CNBC’s new online course, Beyond the Basics: How to Use AI to Supercharge Your Work. Learn advanced AI skills like building custom GPTs and using AI agents to increase your productivity today.
