Data is consistent with bosses using RTO to reassert control and scapegoat workers.
RTO doesn’t improve company value, but does make employees miserable: Study::Data is consistent with bosses using RTO to reassert control and scapegoat workers.
One of the more honest arguments I have seen about RTO:
The company has rented an important building for operations.
That building is prime real-estate, which is now loosing value, because no one is using it and no one wants to buy it.
Since that can get very expensive, forcing use of the building to keep the investment stable makes sense on paper.
Result:
Workers are forced back into office, to everyones detremend. Just because some guys asset is loosing value and now everyone else has to suffer because of it.
I don’t get this logic though. How does having a fake illiquid value for RE holdings make sense on the books?
If RTO doesn’t increase value, then no one is going to up the lease at market value and so the property is going to lose value when push comes to shove. Wouldn’t you just take the depreciation now and write it off on your taxes if you own the building? If you are the lessor, why wouldn’t you keep pushing WFH so you can get a lower rate if you decide to renew the lease at expiration?
It is one of the driving forces behind RTO. There is no small amount of worry over a total collapse of the commercial real estate market. When large companies announce RTO it helps keep the commercial real estate market going.
Counter point to that is that companies that force RTO end up loosing the good employees who actually liked remote work. So the real estate is “saved” and they get a “free” layoff with no severance payouts but the company gets a brain drain.
Companies, currently, are viewing this as a net positive.
I work in IT, there the situation for corpos who want to force RTO is just a nightmare.
There are a bunch of companies waiting with open arms and better contracts to gather these disgruntled workes with knowledge in the industry. So not only do you loose a lot, your competition grows stronger at the same time.
On top of that, if you dont need to rent a huge building at high price, massively cutting costs on overhead an maintenance.
And once the bleeding starts its hard to stop:
Others need to pick up more work, get pissed and then also leave for greener pastures.
It’s the kind of short sighted strategy you always see from upper level corporate execs. They make impulse decisions on limited data and justify it with predictions based on old data.
You know, the only kind of data it’s possible for them to have at the time of their decision because they refuse to pay for external analysis or external data when they can use their own people and records!
So some jackass sets up a slicer on an excel file assigning an arbitrary value to the asset based on headcount capacity and woudknt you know it? The numbers go down when there are less people there.
Well that answers everything you need to know. Keep people in office, property retains value. Simple stuff really but they will say in their speeches and presentations that they have gone over the numbers and this is the way to go.
Never having considered that they could leverage the square footage in other equitable ways than they already do because, well, that data simply wasn’t available.
And it’s all bs anyways because real estate value is speculative and determined by the buyer. So when larger business embrace the hybrid or work from home model they give themselves a market advantage and can purchase or lease smaller office space at lower costs than they would have previously so really the only way this grift works is if all they big players keep overpaying for property.
Sooner or later it gets solved by the market whether that want it to be or not. The genie of work from home is already out of the bottle it’s just a bunch of “boomer” businesses death gripping and smoking copium as much as they can until they are forced to adapt
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One of the more honest arguments I have seen about RTO:
The company has rented an important building for operations.
That building is prime real-estate, which is now loosing value, because no one is using it and no one wants to buy it.
Since that can get very expensive, forcing use of the building to keep the investment stable makes sense on paper.
Result: Workers are forced back into office, to everyones detremend. Just because some guys asset is loosing value and now everyone else has to suffer because of it.
I don’t get this logic though. How does having a fake illiquid value for RE holdings make sense on the books?
If RTO doesn’t increase value, then no one is going to up the lease at market value and so the property is going to lose value when push comes to shove. Wouldn’t you just take the depreciation now and write it off on your taxes if you own the building? If you are the lessor, why wouldn’t you keep pushing WFH so you can get a lower rate if you decide to renew the lease at expiration?
Wat
It is one of the driving forces behind RTO. There is no small amount of worry over a total collapse of the commercial real estate market. When large companies announce RTO it helps keep the commercial real estate market going.
Counter point to that is that companies that force RTO end up loosing the good employees who actually liked remote work. So the real estate is “saved” and they get a “free” layoff with no severance payouts but the company gets a brain drain.
Companies, currently, are viewing this as a net positive.
I work in IT, there the situation for corpos who want to force RTO is just a nightmare.
There are a bunch of companies waiting with open arms and better contracts to gather these disgruntled workes with knowledge in the industry. So not only do you loose a lot, your competition grows stronger at the same time.
On top of that, if you dont need to rent a huge building at high price, massively cutting costs on overhead an maintenance.
And once the bleeding starts its hard to stop: Others need to pick up more work, get pissed and then also leave for greener pastures.
All because you are stuck in the past.
It’s the kind of short sighted strategy you always see from upper level corporate execs. They make impulse decisions on limited data and justify it with predictions based on old data.
You know, the only kind of data it’s possible for them to have at the time of their decision because they refuse to pay for external analysis or external data when they can use their own people and records!
So some jackass sets up a slicer on an excel file assigning an arbitrary value to the asset based on headcount capacity and woudknt you know it? The numbers go down when there are less people there.
Well that answers everything you need to know. Keep people in office, property retains value. Simple stuff really but they will say in their speeches and presentations that they have gone over the numbers and this is the way to go.
Never having considered that they could leverage the square footage in other equitable ways than they already do because, well, that data simply wasn’t available.
And it’s all bs anyways because real estate value is speculative and determined by the buyer. So when larger business embrace the hybrid or work from home model they give themselves a market advantage and can purchase or lease smaller office space at lower costs than they would have previously so really the only way this grift works is if all they big players keep overpaying for property.
Sooner or later it gets solved by the market whether that want it to be or not. The genie of work from home is already out of the bottle it’s just a bunch of “boomer” businesses death gripping and smoking copium as much as they can until they are forced to adapt