Early research from Envoy indicates a link between a company’s financial performance and in-office presence. While many considerations factor into the health of a business or RTO (return to office) success, Envoy’s recent deep dive found that tech companies that require in-office days are reaping financial rewards. These companies:

• Saw a 32% point increase in attendance over those without in-office minimums.
• Experienced a rise in stock performance. Specifically, offices that required people on-site 5 days a week showed higher YTD and YoY stock performance than those requiring fewer or no days in office. Yet even those with a mandatory minimum of one day a week showed improvement.

Tech’s return to office

No industry has experienced as much controversy and public debate over RTO than the tech sector. Although studies have found that employees are most effective and engaged in the office, media headlines still claim RTO efforts are a failure, with employees refusing to work on-site despite incentives or mandates.

Nevertheless, it’s essential to recognize that the vast majority of today’s employees work in an office or a workplace setting (like a manufacturing plant) – and this number continues to grow. By the end of 2024, almost every company (90%) will require their people to work in person in some capacity.¹ According to JLL, office occupancy is currently about 40% to 60% of pre-pandemic levels – and this figure is expected to rise to 80% by the end of the year.

Many top technology brands initially championed remote-first policies. However, they have since acknowledged the value of the workplace and in-person connections. As a result, most now require that their teams work together on-site.

So what does all of this really mean? For starters, it’s clear that physical workplaces remain critically important to a company’s success. The tech organizations that will thrive in this economic market are those that invest more in their people and spaces, and establish clear, consistent on-site policies that are maximized for collaboration.

“By being physically present, teams can adapt and solve complex problems faster and more efficiently than in isolation. This is especially essential for tech businesses that rely on being innovative and staying ahead of the competition,” said Larry Gadea, CEO and Founder at Envoy. “Those that understand this are bringing teams on-site–in some capacity–to work towards hitting hard-to-reach company objectives. As a result, they are seeing greater output and innovation which directly contributes to earnings and a better financial outlook.”

In-office presence and collaboration boosts business performance

Workplace entries aren’t the only numbers on the rise. A recent survey found that of those companies who have returned, 72% of leaders say their revenue has improved.²

What’s more, early quantitative results suggest there is a correlation between physically being in the office and a company’s financial performance. When comparing tech companies’ stock performance and RTO policies, those who required their people to go in 5 days a week had the best YTD and YoY stock performance. Even those that only required a minimum of one day a week (hybrid minimum) showed improvement. In contrast, fully remote or companies with no in-office requirements experienced negative YoY stock performance.

It’s also important that leaders enforce their on-site policies while also stressing how these requirements benefit both the company and individual employees. Taking another look at market performance, tech companies with employees who adhered to in-office policies financially outperformed those who didn’t. In fact, those companies whose employees worked from the office had double the average stock performance compared to the latter, further supporting the case that office presence does make a difference.

On-site requirements encourage workers to collaborate in-person

Given the connection between office presence and financial performance, leaders should establish workplace rules that align with their company’s goals. To achieve this, they need to define how often employees are required to be in the office and prioritize rebuilding connections between team members.

Establishing a cadence of when employees must go in varies significantly from company to company. And while this may be driven by many factors, Envoy’s research highlights a correlation between requiring a specific number of days in office and a boost in office attendance. Tech companies that called for employees to work from the office at least part time* experienced a 32% point increase in on-site attendance compared to those with flexible (optional) or no policy.³ While some employees at organizations with flexible in-office policies choose to come in, the data indicates that more people tend to do so when it’s mandatory.

The data shows a similar trend in tech hubs like Boston and London, where employees are working from the office at greater rates than in San Francisco and Austin. This is because tech companies in hubs like Boston and London are more likely to mandate in-office work.

In summary, the tech sector is experiencing an increase in office entries year-over-year, largely driven by recently imposed mandates. In some cases, even employees at flexible tech companies are opting to work on-site, likely seeking more meaningful in-person collaboration and stronger connections with coworkers. Studies show that too much reliance on remote communication like video conferencing and messaging can result in feelings of isolation, disconnect, and burnout.⁴

The psychological draw of the workplace has little to do with the physical space (though a well-designed office can certainly help). What truly draws people to the office are the people – the teammates we work with and the colleagues we come into contact with. So it should not come as a surprise that when workers were asked to name compelling reasons to go into the office, 69% said building friendships for support and 68% felt developing better in-person relationships improved their ability to collaborate.⁵

Growing your on-site presence won’t resolve every challenge. But establishing a clear-cut policy that defines which days an employee is expected to be on-site can help create a rich, collaborative environment. Employees want – and deserve – this clarity.

Today, companies need every advantage to survive and thrive. With this in mind, consider the following:

• Prioritize rebuilding connections between your people to fuel creativity and excitement.
• Specify the days people should come in to maximize overlap with colleagues.
• And finally, be willing to have conversations with employees about the why. Why are you requiring them to come in and what is the ultimate impact on the company?

This year, some technology companies will stand out from their peers. Not because they build the best widget or have the hardest working employees, but because of intentional steps they have taken to rebuild a strong workplace community – and as a result, a financially solid organization.

Methodology

All research results were aggregated from Envoy’s proprietary platform data, unless otherwise stated.  All results are limited to the sample size of Envoy’s technology customers with public RTO policies.

Employee entry data was pulled from a sample of technology customers between June 2022 and September 2023. “Tech companies” are companies that fall under the category of “Information Technology” as defined by Clearbit.

Stock performance for over 100 publicly-traded, anonymized Envoy customers was sourced from Google Finance as of 9/22/23.

Definitions

*Part-time = At least one day a week

Hybrid minimum – Employees are required to go into the office at least one day a week

Flexible – Employees have the option of working in the office or from home

Footnotes

¹ Resume Builder – https://www.resumebuilder.com/90-of-companies-will-return-to-office-by-the-end-of-2024/

² Resume Builder – https://www.resumebuilder.com/90-of-companies-will-return-to-office-by-the-end-of-2024/

³ From July 2022 to September 2023

⁴ Forbes – https://www.forbes.com/advisor/business/remote-work-statistics/#benefits_and_challenges_of_remote_work_section

⁵ Envoy – https://envoy.com/blog/what-keeps-people-at-their-jobs-turns-out-its-the-satisfaction-of-a-job-well-done/