Return to Office: How the Trump RTO Mandate Is Impacting Businesses

Mandating federal workers to return to the office full time was one of President Donald J. Trump’s first priorities after his inauguration. The RTO mandate of federal workers is sparking a new wave of discussion about working from home in both the public and private sector.

"Trump, as a businessman, treats the U.S. bureaucratic system like a company in need of optimization. He's taking steps similar to big corporations, including bringing everyone back to the office," says Yakov Filippenko, CEO and Founder of Intch, a future-of-work app. "The response? Just like in the private sector, some employees will quit—which, to be fair, aligns with the goal of cutting costs. The issue is that this move is super unpopular. There's no strong public support for it, so it’s likely to face resistance and fizzle out sooner rather than later."

Or will it? This raging debate about working from home (WFH) pits employers against employees, and it is probably the greatest demonstration of the fight to win leverage in the workplace. During the pandemic, workers shifted their priorities and demanded better conditions and pay during what controversially became known as the Great Resignation. Employers had no choice but to raise salaries and offer more flexible working arrangements among other upgraded benefits. At the time, employees had leverage.

Back and Forth on the Remote Work Debate

As COVID-19 vaccines became available and the illness became less grave, there was less of a need for work from home policies. In addition, inflation and the cost of living crisis meant employees needed job security. It was harder to demand flexibility and higher pay. As a result, the media labeled the period the Great Stay because people were staying put – and employers had leverage again.

However, the back and forth between workers and their bosses continues. Trump’s decision to force federal workers back into the office put the issue in focus again. The Trump RTO policy was enshrined in an executive order that read:

"Heads of all departments and agencies in the executive branch of Government shall, as soon as practicable, take all necessary steps to terminate remote work arrangements and require employees to return to work in-person at their respective duty stations on a full-time basis, provided that the department and agency heads shall make exemptions they deem necessary," according to the executive memo.  

The Economic Argument for RTO

In many ways, the private sector led the way on RTO mandates in the last year. Salesforce, Amazon, Meta, JPMorgan Chase, AT&T, Boeing, Dell Technologies, the Washington Post, and Major League Baseball are already insisting employees return to the office either full time or in some capacity. Even though some organizations are sticking with hybrid work arrangements, there is more of a push for full-time RTO. 

After all, as the pandemic came to an end, employers felt empowered to ask people to return. In addition, there is an economic factor that the government is noticing.

“It has been reported that 60% to 70% of federal workers work from home, which is a significant number,” says Jason Walker, cofounder of Thrive HR Consulting. “It is hard to justify with no pandemic and virtually empty federal buildings that federal workers should still be allowed to work remotely.”

This is true in the private sector, too. Office space is empty, businesses that rely on workers being there during the day are struggling, and cities are looking for solutions. In addition, employers are concerned. Nearly 60% of employers worry that remote work harms company culture.

Thought leader and researcher Michael Arena, who writes for both HR Exchange Network and PEX Network, has shared his findings about the importance of face-to-face encounters with colleagues for brainstorming and collaboration that lead to innovation. However, Arena has also pointed out that remote work is sometimes the preferable option for getting certain tasks done. 

Watch Arena address hybrid work at PEX Network's All Access: Digital Transformation in HR webinar series. 

In fact, the debate is more nuanced than most realize, and the back and forth between workers and executives is having negative implications on engagement and productivity. Employee engagement trends show 31% of U.S. employees are engaged, and 17% are actively disengaged, which is a 10-year low, according to Gallup.

The Future of WFH

This dilemma is compounded by the RTO mandates. Many workers, who can do their jobs from home, are disgruntled about being forced back into an office. About half of workers said they would rather quit than return to the office full time, according to Pew Research Center.

Already, about 75% of workers are required to be in the office a certain number of days per week or month as of October 2024, according to Pew. Stanford Economist Nick Bloom, who conducted the largest study on hybrid work, found that those who work from home two days per week are just as productive, likely to get promoted, and far less prone to quit. Companies that imposed RTO mandates have annual rates of employee turnover that are 13% higher than those that have become more supportive of remote work, according to ZipRecruiter.

Still, many executives are not convinced and wish to return to pre-pandemic habits. They want to be able to observe people in the office, have face-to-face meetings, and provide less flexibility. For some people, this is a matter of preference. For others, flexible work arrangements make work more possible. This is especially true for moms, caregivers, and disabled people who may need certain accommodations in an office but already have them at home. Truly, the backlash against remote work seems similar to the backlash to diversity, equity, and inclusion (DEI) initiatives in these instances. 

Watch this clip from PEX Network's All Access: Digital Transformation in HR to see the connection between remote work and inclusion. 

“It is not surprising but it is clearly disappointing,” says Walker. “For those individuals who want to work remotely, no matter if it is at the federal government or for a public company, they will need to pursue opportunities with organizations that embrace remote work just as employees of companies have had to do.”

While remote work is under fire at the moment, some are warning business leaders to think about their full-time RTO mandates. 

"Private sector leaders are watching closely [at Trump's RTO mandate], and many may fall in line to avoid clashing with policy changes," says Pavel Shynkarenko, founder of Mellow, an HR platform to offer freelancers’ tax and social security support. "Now, for the broader picture: big tech employees should brace themselves."

Indeed, this could end up giving a competitive advantage to smaller businesses and startups. 

"Yet, there’s still room for innovation. While big tech plays it safe, mid-sized companies and startups have a golden opportunity," adds Shynkarenko. "They can attract top talent unable to work onsite due to personal constraints, like living far from cities or balancing family life."

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