Getting Employees Back to Work

Jan 22, 2024 | Finconomics 101, No Bull Economics

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After office workers got a taste of freedom from the commute post-covid, they have been resistant to return to the 9-5 grind. In turn, employers have found that a telecommuting workforce can save overhead in the form of lower occupancy costs. However, as we witness spiking corporate layoffs, we wonder if all this telecommuting has lowered productivity. Maybe it is time for employers to consider if office rent is actually a high ROI investment. This could save the banks… 


  • Office occupancy has a long way to go to return to pre-covid levels as the chart below demonstrates. Full-time telecommuting & hybrid arrangements mean a lot fewer people coming into the office, with an associated decrease in retail spending in the metro centers.
Back to Work Barometer
  • Landlords have not helped matters as evidenced by rent hikes outlined in the chart below. Higher rents translate into a lower perceived ROI on office space which is intangible to begin with, but perhaps more important than employers realize. All the past work to engender collaboration is undermined by remote work arrangements in many, but not all, cases. This is especially evident as it relates to the important work of training junior staff.  
Producer Price Index Real Estate Services
  • Notably, there is more at stake here than just office worker productivity & metro retail trends as the banks are sitting on a boatload of commercial office loans that could go bust if occupancy rates don’t recover.
  • All this could be averted if: landlords were to lower rents; the Fed agreed to relent over its destructive high-rate policy; & employers re-evaluated the value of developing & supporting in-person teamwork.

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