CEOs Might Be Playing the Long Game With Remote Work

The talk of CEOs earlier this year was brave and strong. Labor Day would be it. Workers had to return. Productivity, innovation, and the future of corporations were at stake. Just like Labor Day in 2022. And, like then, there has been no sudden and drastic change.

According to the Kastle Barometer of office occupancy, the average continues to hover around 50%. The spread is, from the top in the Houston metro, about 60% and drops to just over 40% in San Jose.

How do you describe the position of office property owners wondering when the other shoe will drop and suddenly result in a massive exodus/? Indigestion. The lack of knowledge, the uncertainty, has to be beyond frustrating. The situation makes it impossible to plan.

But KPMG’s 2023 CEO outlook study suggests that there’s a dynamic not obvious outside of corporations. Chief executives may be playing the long game with remote work, looking to change conditions and worker willingness over time.

“CEOs want more workers to come into the office and will reward those who do – but need to communicate expectations clearly to build trust,” wrote Paul Knopp, KPMG U.S. chair and CEO.

The study suggests why having workers in the office has become such an important issue to many CEOs. The ones interviewed “remain confident in growth prospects of the economy, but confidence is more subdued when it comes to the growth prospects of their own companies.” About 84% were confidence in the U.S. economy and 77% in the world economy. However, when it came to their own companies, the number was 79%. Just a year ago, that was 95%. CEOs expect that workers whose roles had traditionally been based in the office would be 62% back in the office, 34% working hybrid, and 4% fully remote.

Is that a forward-looking position? It may be more a recognition of the current state of affairs. In the July 2023 American Time Use Survey from the Bureau of Labor Statistics, 33.8% of people worked from home or possibly other places on any given day. That closely matches the 34% hybrid projection. It was down from the 38% in 2021 but higher than the 24% in 2019, which frankly isn’t that far removed from the current situation which many CEOs saw as radical.

The CEOs expect success by an ancient technique: bribery. About 90% plan to reward employees who come into the office with favorable assignments, raises, or promotions.