Adecco Talks: The real cost of return-to-office mandates, labor hoarding, and worker well-being

The high cost of returning to the office

Return-to-office mandates are reshaping the workforce – but not without consequences. Among S&P 500 firms, these policies have led to a sharp rise in employee turnover, particularly among women, senior leaders, and highly skilled professionals.

Not only are these firms risking the loss of top talent, but they are also struggling to attract replacements, facing increasing time-to-fill and declining hire rates.

This emerging trend points to a troubling loss of institutional knowledge and skilled talent – revealing that even the world’s most influential companies are not immune to the hidden costs of return-to-office mandates.

Employers should keep in mind:

• 84% of workers now say that flexible work arrangements are a priority
• Female employees are 3 times as likely to experience turnover than male employees
• More senior and highly skilled employees are more likely to leave the firm following return-to-office mandates
• Strict return-to-office policy can damage your employer brand

While those resisting change risk losing engagement and top talent, employers can embrace flexibility and hybrid models to help stay competitive and innovative.

Pros and cons of labor hoarding in today’s workforce

In order to retain hard-to-find talent, many companies have been avoiding layoffs and maintaining their workforce levels. Known as labor hoarding, this practice can have both positive and negative consequences on a company’s workforce and bottom line.

Pros:

• Increases employee loyalty and commitment to the organization
• Retains experienced and skilled employees
• Reduces recruitment and training costs
• Improves productivity by reducing the time and effort needed for onboarding
• Enhances team dynamics and collaboration by building long-term relationships
• Enables organizations respond quickly to sudden changes in demand

Cons:

• Lowers employee morale and job satisfaction
• Limits opportunities for growth and advancement, leading to increased turnover
• Creates a stagnant work environment that lacks innovation and creativity
• Increases resentment and tension among employees who feel overlooked or undervalued
• Increases risk of burnout and decreased productivity because of overworked employees
• Increases labor costs and decreased profitability in the long run

While labor hoarding is a popular –  and sometimes effective – trend, it isn’t the right staffing solution for everyone. The right staffing partner can help you take a full inventory of your workforce, analyze your current and future staffing needs, and factor in your short- and long-term financial capabilities – so you know you have the right people at the right time.

Wellbeing: The key for worker attraction and retention

Keeping workers engaged is a critical part of candidate attraction and retention strategies, but it’s important to remember that worker satisfaction doesn’t just revolve around pay.

One recent survey from the Adecco Group highlights the importance of wellbeing for every level of the workforce:

• Pay remains a top motivator for accepting work, but toxic corporate culture is 10 times more important than compensation in predicting turnover
• Employees consider a corporate culture “toxic” when they feel disrespected and employer behavior is unethical
• 74% of companies have made changes to their policies and work environments in the hope of increasing employee engagement and satisfaction, and reducing turnover
• Companies can improve wellbeing for workers by offering predictable schedules, lateral job opportunities and promoting an inclusive culture

Labor market trends in March

• The US added 151,000 jobs in February, falling short of the expected 170,000, but still an improvement from January’s 125,000
• The unemployment rate edged up to 4.1% from 4%
• Federal employment declined by 10,000 jobs, with larger layoffs expected in the coming months due to government spending cuts and hiring freezes

Ready to get to work?

If 2025 hasn’t quite gone according to plan, now might be the time to reach out to Adecco. We have the market intelligence and the analytics tools to help make sense of your staffing challenges. Reach out today and let’s get started.