Elon Musk and Vivek Ramaswamy’s dream to eliminate work-from-home options for 94% of federal employees — in hopes of encouraging workers to quit and thus shave trillions from the federal budget — could backfire, new University research suggests of Pittsburgh.
A working paper by associate professor of business administration Mark Ma and colleagues found that leading technology and financial companies that implemented return-to-office (RTO) mandates lost their most skilled and senior employees. When they tried to fill these workers’ vacancies, they had a harder time.
From a universe of 54 S&P 500 companies that implemented RTO mandates between April 2020 and June 2023, et al. looked at 3 million LinkedIn profiles to determine who left their company after office repression. Not only did these companies see a 14% increase in departures after an RTO implementation compared to their pre-RTO baselines, but the people who left the company were more likely to be women, mid- and top-level managers, and those with more skills listed on their LinkedIn profiles.
For workers who already have an extensive resume — and female workers with childcare responsibilities on top of their jobs — there are simply other, more flexible positions available, Ma said.
“Who will leave? It’s just the people who have other opportunities,” he said Fortune. “And these are the people with a lot of skills, with a lot of experience that companies want.”
The headache for employers increases as they try to find replacements for lost talent. The time it took companies to fill vacancies increased by about 23% on average compared to pre-RTO baselines, according to Ma’s analysis of more than 2 million vacancies. These companies also saw a 17% drop in rental prices.
These findings are relevant to Musk and Ramaswamy’s goal for the new Department of Government Efficiency (DOGE) to reduce “government waste” by $2 trillion. One of their first proposals is to thin the ranks of government employees by introducing unpopular employee surveillance and personal work rules. Experienced executives will likely be the first to leave, possibly heading to the private sector, Ma warns.
Increasing employee turnover is also expensive, Ma said. “If there is significant employee turnover within the company, it will certainly disrupt the company’s operations and also the new costs of hiring new employees, including the costs of training,” Ma said.
