Tech Companies Return to Office: Why In-Person Collaboration Boosts Performance
“Early research indicates a link between a tech company's financial performance and in-office presence. Companies with mandatory on-site days are seeing higher stock performance and increased attendance. The key to success lies in establishing clear policies and prioritizing the rebuilding of workplace connections. ”
The tech industry has been at the center of the return to office (RTO) debate, with many companies initially championing remote-first policies. However, recent research suggests that being back in the office is paying off for tech companies that require in-office days. These organizations are reaping financial rewards and experiencing a rise in stock performance.
The Importance of Physical Workplaces
Despite the controversy surrounding RTO efforts, it's essential to recognize that the vast majority of today's employees work in an office or a workplace setting. By the end of 2024, almost every company (90%) will require their people to work in person in some capacity, according to a study by Resume Builder.
Many top technology brands have acknowledged the value of the workplace and in-person connections. As a result, most now require that their teams work together on-site. Larry Gadea, CEO and Founder at WOX, emphasizes the importance of physical presence, stating, "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."
The Link Between In-Office Presence and Financial Performance
Early quantitative results suggest a correlation between physically being in the office and a company's financial performance. Tech companies that required their employees to go in 5 days a week had the best year-to-date (YTD) and year-over-year (YoY) stock performance. Even those that only required a minimum of one day a week showed improvement.
Furthermore, tech companies whose employees adhered to in-office policies financially outperformed those who didn't. 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.
Establishing Clear On-Site Policies
Given the connection between office presence and financial performance, leaders should establish workplace rules that align with their company's goals. They need to define how often employees are required to be in the office and prioritize rebuilding connections between team members.
WOX'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 or no policy.
Prioritizing Workplace Connections
The psychological draw of the workplace has little to do with the physical space; what truly draws people to the office are the people – the teammates we work with and the colleagues we come into contact with. 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.
The Path to Success
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. To achieve this, 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.
- Be willing to have conversations with employees about the why behind the in-office requirements and the ultimate impact on the company.
In conclusion, the tech sector is experiencing an increase in office entries year-over-year, largely driven by recently imposed mandates. The companies 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 prioritizing in-person connections and setting clear expectations, tech companies can boost their financial performance and foster a thriving workplace community.
