Companies are pushing return-to-office because of expensive leases, study says

When explaining their return-to-office (RTO) mandates, companies tend to point to factors like increased productivity, improved company cultures, and facilitated teamwork. But according to a new survey, another big reason companies are choosing to make workers return to the office is because they’re tired of paying for empty office space.

Resume.org asked 900 business leaders to tell them about their remote work policies. One in three reported that they were implementing RTO policies because of existing office lease agreements.

Many of the companies said they had signed long-term leases before the pandemic, some of which wont expire until 2028 or later. Twenty-one percent said they signed leases before 2017 and 22% said they had signed leases between 2017 and 2019. The rest had signed leases more recently, with some likely anticipating more willingness from employees to return to the office.

Kwame Darko, a real estate investor and founder of KD Buys Houses, told Resume.org that many companies are rethinking their office needs as their leases come up for expiration.

“Remote work and hybrid models have proven to be effective, leading to a reevaluation of the necessity for large office spaces,” Darko said. “When leases signed under pre-pandemic conditions expire, business leaders are presented with an opportunity to align their physical space needs with their current operations.”

Still, of the business leaders surveyed, almost three in 10 say they will require workers to be in the office full-time in 2025, close to two in 10 want employees in four days a week, and another three in 10 want employees in the office three days a week. The others are unsure or planning to keep more flexible policies.

The survey results come as big tech companies have become increasingly averse to remote work, with Amazon (AMZN+2.42%) in particular leading the charge. When Amazon announced all employees need to be in the office five days a week starting in 2025, disgruntled employees tried to push back, but executives at the retail giant said workers unhappy with the policy were welcome to find jobs elsewhere.