The days of pandemic-era workplace flexibility appear to be waning as another round of some of the country's largest employers step up their in-office requirements.
Coffee chain Starbucks and retailer Target are preparing to escalate their attendance policies in moves that coincide with broader efforts to turn around sales and shed privileges adopted in the earlier years of the global health crisis.
A growing cohort of companies across the United States is demanding more in-person time from employees, either by revoking remote work privileges, increasing the number of days they're required to commute to an office or asking a portion of the workforce to relocate closer to a corporate hub.
For Target, that means putting an end to what has been nearly half a decade of its flexible work policy. It is now asking employees across its merchandising division to return to its headquarters in downtown Minneapolis at least three days a week. Its headquarters reportedly houses about 7,100 Target employees.
In Seattle, Starbucks told its corporate employees that its current three-day office requirement would be bumped up to a minimum of four days, starting at the beginning of the company's fiscal year in October. Alongside the boosted attendance mandate, the coffee giant has also told workers within its support center division — many of whom have been working remotely — that they will have to relocate either to Seattle or Toronto within the next year.
Amid backlash from their workers, some companies are justifying the mandates by saying the in-office time is more valuable and productive than work done outside of it.
"Team members tell us they see the benefit from the in-person connection and collaboration that's a part of being in the office," Brian Harper-Tibaldo, Target's director of media relations, said in a statement. "At this point, individual leaders are empowered to make decisions for their teams based on company guidance as well as what's best for the role they play in our business."
Sticking point
Across the United States, the debate over flexible work policies has settled somewhat since early in the pandemic. Still, it remains a sticking point between employers and their workers.
"We understand not everyone will agree with this approach," Starbucks CEO Brian Niccol told employees this week. "But as a company built on human connection, and given the scale of the turnaround ahead, we believe this is the right path for Starbucks."
For Starbucks employees, those who don't want to pack up and move will have the option of a voluntary exit that will come with a one-time cash payment.
Niccol was hired last year to lead the company and initially wasn't required to relocate. The former Chipotle CEO, who had been able to commute from Southern California via corporate jet, now has a home and office in Seattle, a Starbucks spokesperson confirmed.
Target employees had earlier been given "significant leeway" in terms of how often they could commute to the company's physical office spaces, Harper-Tibaldo said.
Hybrid work mandates have largely been attributed to contributing to the national office vacancy rate rising to a record high of about 14%, according to CoStar data.
Remote no more
Starbucks' looming four-day mandate lands at a point when the company is scrambling to rebound from a yearslong sales slump. It laid off about 1,100 corporate employees earlier this year, and executives have said face-to-face time in the office is crucial to getting the company back on track.
Corporate leaders at chipmaker Intel, the national arm of Japanese automaker Nissan, and other major companies have linked greater attendance with better performance.
"At the end of the day, I need to re-create a culture and a fighting spirit, break silos and bring [people] together," Nissan Americas Chairman Christian Meunier said earlier this year. "With people working from home, we've lost the teamwork that existed, that nimbleness, and that underdog fighting spirit that we used to have. Let's get in a room and fix the problem together."
Other large employers such as Amazon, JPMorgan Chase, Caterpillar, AT&T, Southwest Airlines and Walmart have recently stepped up their in-person requirements, and a number of employers are now demanding workers commute to an office all five days of the workweek.
Escalated mandates have fueled optimism among national office landlords, who are looking to retain their portfolio occupancy as tenants slashed real estate to both trim costs and adjust to flexible post-pandemic work policies.
Some of the country's largest landlords have said that stricter in-office mandates are enough to bolster growing optimism that the demand for space will climb as corporate heavyweights push to revert to their pre-pandemic workweek schedules. The number of CEOs who expected their companies to adopt a full return to a five-day workweek climbed from the 64% reported last year to about 85%, according to a recent KPMG survey.
Target has experienced a sales slump of its own over the past several years, a trajectory the company is now trying to turn around with its own heightened attendance mandate.
"More time together, in the office, will help us grow our business faster, solve problems quickly, and build stronger relationships," Target's Chief Commercial Officer Rick Gomez wrote in a company memo notifying employees of the change.