June 19, 2024
Why RTO orders are layoffs in disguise, according to workplace experts: ‘Companies are daring employees to quit’ – CNBC


“Companies will never come out and say this because of the legal implications,” said Dan Schawbel, managing partner of Workplace Intelligence and a New York Times bestselling author. “A company can use the return-to-office order as an opportunity to restructure its workforce.”

Claus Weidfeldt | DigitalVision | getty images

There seems to be no end to the return-to-office debate as companies grapple with the mandate and the subsequent employee response.

While 90% of companies plan to implement return-to-office policies by the end of 2024, flexibility remains a top priority for employees – and the lack of it may push them to seek other opportunities.

However, according to workplace experts CNBC Make It spoke to, that’s exactly what some companies want.

“Companies will never come out and say this because of the legal implications,” said Dan Schawbel, managing partner of Workplace Intelligence and a New York Times bestselling author.

“A company can use the return-to-office order as an opportunity to restructure its workforce.”

Schawbel said one company that could adopt this “stealth layoff” strategy is AT&T, which recently mandated that 60,000 managers in 50 states work in person — but only in offices in nine locations. .

An AT&T employee told Bloomberg in a June report that the telecom company’s new return-to-office order was a “layoff wolf in sheep’s clothing.”

AT&T did not respond to CNBC Make It’s requests for comment.

RTOs are a cheap and dirty way for companies to avoid the legal complexities and financial obligations associated with layoffs.

Laurie Reutimann

career advisor

Workplace experts told CNBC Make It that the need to induce soft layoffs through RTO mandates may be driven by economic threats, recession fears and changes related to consumer spending.

“Some companies are struggling with very expensive real estate as their workforces and often their customers become remote and digital. Companies need to shed some weight somehow,” said talent management and workplace expert Meghan Biro.

This “soft layoff” strategy isn’t new, Schawbel said, and it doesn’t just come in the form of an RTO order. Here are other ways companies can induce layoffs:

1. Slowing down or stopping the hiring process

Allowing natural attrition (employees leaving due to resignation, retirement, or other reasons) to gradually reduce the workforce over time without actively laying off employees.

2. Offering voluntary buyout or early retirement packages to employees

This encourages employees to leave the company on their own terms, while allowing the company to reduce the number of employees without resorting to involuntary layoffs.

3. Reducing working hours or implementing temporary leave

This means that employees work fewer hours or take unpaid leave for a specific period of time, helping the company save costs while retaining the workforce.

The goal was to target people leaving jobs quietly and seeking opportunities elsewhere by making the current work environment unattractive.

Laurie Reutimann

career advisor

Career consultant and workplace expert Laurie Ruettiman agreed, saying she had to employ the same “soft layoff” strategy in 2001.

,[We were] “Restructuring reporting responsibilities to make employees less comfortable, or subtly increasing workloads or duties for those exempt from overtime,” he said.

“The goal was to quietly target those leaving jobs and those with opportunities elsewhere by making the current work environment unattractive.”

Similarly, RTO mandates can be particularly burdensome – removing benefits like flexibility, being able to care for others at home, as well as saving time and money on commuting.

“It’s audacious to roll back benefits like remote work and flexible hours, but companies are giving employees the courage to leave,” Ruettimann said.

For example, Amazon doubled down on its RTO policy by seeking to relocate some employees to a central location. This prompted some employees to leave rather than uproot their families or break their leases.

The RTO mandate also presents an opportunity for some companies to eliminate employees by evaluating individual performance in the new circumstances, Schaubel said.

“Employees who are deemed less productive or adaptable during this phase could potentially be targeted for layoffs,” he said.

“If a company decides that certain roles must be filled in the office, they can lay off remote employees and then start a new hiring process to fill those roles with employees willing to work in the office. Can.”

Why wouldn’t companies say this is fair? This could be for a number of reasons, but experts told CNBC Make It that it ultimately “depends on the money.”

“RTOs are a cheap and dirty way for companies to avoid the legal complexities and financial obligations associated with layoffs,” Ruettimann said.

Some of these obligations include severance packages and unemployment insurance, which companies do not have to provide if employees themselves decide to leave.

By linking layoffs to a broader workplace strategy, the company can direct the narrative and manage the way information is perceived by both employees and the public, Schawbel said.

It is believed that those who are unwilling to return to the office may not be as invested in the future of the company, making them more likely to leave voluntarily.

“Announcing layoffs directly could lead to a decline in morale among remaining employees, which could impact productivity and the overall workplace environment,” he said.

“By making layoffs as part of a larger strategy, the company may attempt to minimize the negative impact on morale. It may also lead to less speculation about the company’s financial health and stability.”

Many leaders and human resources professionals believe they can find out their employees’ level of commitment by counting employees and tallying the number of people who come back to the office, Ruettimann said.

“It is believed that those who are unwilling to return to the office will not be as invested in the company’s future, making them more likely to leave voluntarily,” he said.

“But that process is flawed…many people are left [may not be more invested but] Are afraid or don’t have the opportunity to go.”

Soft layoffs can also have an adverse effect on remaining employees by overworking them, leading to fatigue and decreased productivity.

“Implementing a mandatory RTO policy without considering employee well-being and work-life balance could have a negative impact on morale and overall engagement,” Schawbel said.

“Employees who feel that their needs are not being considered may become unemployed, leading to decreased productivity and innovation.”

Over time, skilled and valued employees will choose to leave rather than follow an order that is not in line with their work preferences.

“I think some companies are using [RTO] Strategy as a way to show that they have the strength of conviction regardless of their employees’ choices,” Biro said.

“But employees are tired of being pushed around by managers and leaders. Many who seek career advice from me prefer to bet on themselves and walk away rather than return to an office with unhealthy power.”

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