Elon Musk’s ‘Return to Office’ Mandate Talent or Corporate Suicide?

Elon Musk, chief executive of Tesla and SpaceX, gave an ultimatum to white-collar workers at two companies this week: go back to the corporate office or face a shootout.

The demand to work in the office for at least 40 hours is basically informed through this Leaked employee email. Later Wednesday, Musk appeared on Twitter to confirm his order: “Those who think coming to work is an old idea,” when asked to comment in an email He responded“They should pretend to work somewhere else.”

Musk’s letter to executives states, “The office must be where your real co-workers will be, not a remote pseudo office. If you do not show up, we will assume you have resigned. “

Kasturi justified his call to return to the office by writing, “We have said this less than the factory workers.” His instructions left little room for those in dire straits.

“If there are particularly exceptional contributors for whom this is impossible, I will review and approve those exceptions directly,” Musk wrote.

Elon Musk Letter 1 Twitter

The demand for Tesla and SpaceX employees to return to office comes at a time when companies around the world are planning their hybrid work, allowing flexibility for when, where, and how often employees should be on site.

It also comes at a time when great resignations see employees moving around to competitors for better pay and benefits or choosing a completely new career path.

Human resource experts and industry analysts were not surprised by Musk’s claim, as his past behavior shows a willingness to impose his will regardless of cost.

Market research, however, shows that companies that continue to impose their will on their employees and refuse to adapt to their management practices will lose their top employees to companies that offer more independence.

Opportunity for a poaching?

In an environment where the share prices of technology companies have fallen dramatically over the past few months, many companies are seeing competitors with less flexible work policies and other benefits.

“Some of these companies see talent as an opportunity to hire,” said Brian Crop, Gartner’s senior vice president of HR practice.

“Look, Elon Musk is a very smart guy. There may be 20% or 25% of employees who eventually leave, and they may want to leave, but a good portion of that 25% is in demand at other companies, ”Krop added.

Employee surveys show that 40% of employees will leave their jobs if they are not allowed to work remotely.

Crop admits he has no idea what Mask is thinking, only “he jigsaw when many others are waking up.”

“When you look at the data, it’s clear that companies are embracing hybrid work,” Crop said.

Last week, Gartner surveyed 180 companies and found that companies expect about 25% of their workforce to be completely remote, 60% hybrid and only 15% full-time in the office. “What we find is that employees who work remotely or hybrid work have the same or slightly higher performance than office workers,” Crop said.

Analysts do not believe that Musk has deliberately snatched his workforce in order to create a weak organization using his RTO claims; Instead, he knows his companies have a brand of power that a few others have.

“Tesla has a lot more applicants than employees, so the disadvantage is that they don’t see the material consequences in terms of number of employees. [departing]But the brand will suffer, “said Amy Lumis, research director at IDC’s Worldwide Future of Work Market Research Service.

“For a company built on the future, this is definitely a step back in the past,” Lumis added.

Jack Gold, chief analyst at Jay Gold Associates, was blunt in summarizing Musk’s intentions. “I don’t think he really cares. He wants to be in command of everything and once he has an idea of ​​how things should work, he goes for it regardless, “Gold said.”

Tesla did not respond to a request for comment ComputerWorld.

Where the RTO mandate has been established

Kasturi is not the first chief executive to demand a return to office, but it is the first time anyone has so harshly determined the consequences of refusing to accept it.

In May 2021, JPMorgan CEO Jamie Damon emphasized the concept of remote work, saying “it doesn’t work for those who want to rush.”

It “doesn’t work for culture, it doesn’t work for ideas,” Daemon continued. “We are pushing back internally. But that is life. “

About a year later, however, the push by the staff seems to have softened Damon’s position. In April of this year, Damon acknowledged that he expected about half of his 270,000-person staff to return to full-time office – and 10% to work entirely remotely.

Apple, another company with reasonably unmatched branding capabilities, began spending at least three days a week in an office in April. The response was almost immediate.

A group of employees calling themselves “Apple Together” have backed out of a hybrid work order, releasing an open letter to executives criticizing the company’s hybrid work pilot program, calling it inflexible.

Lumis said the consequences for Tesla and SpaceX as a company would be to lose good engineering talent and affect both Musk’s “personal brand and his company’s brand in terms of their sincerity.”

“See how good this is for Jamie Damon,” Loomis added.

David Lewis, CEO of Operations Inc., an HR consulting firm in Connecticut, says the big picture is missing when companies instruct full-time return to office – or how employees should work remotely. Lewis noted that the U.S. unemployment rate is 3.6% and now has more than 11 million jobs.

For IT workers, unemployment is only 2%, according to CompTIA, a non-profit organization for the IT industry and the workforce.

But, as Lumis points out, Tesla is an outsider with a reputation for being a violently loyal workforce and potential workers knocking on its door.

“In most companies, such a move would be strategically weak in terms of the job market, and many would probably choose to leave. This is Tesla, and as such he [Musk] There may be enough cash in its brand and culture to get away from this, ”Lewis said. “Nevertheless, in my view, this means that he will lose less than the mass exodus [employees]. The question is how much less? ”

Will other CEOs follow Mask’s lead?

Ultimately, Musk will regret his tactics, Lewis said, because he bets his employees and their priorities will be vastly different from those of other companies, “for the general truth that their desire to work for Tesla is greater than their desire for a better work balance.” “

“He originally launched a massive advertising campaign that Tesla is an ‘office-office-cable’ company, which could be very problematic for those trying to build a candidate pipeline for them,” Lewis said.

Even so, if Mask manages to retain a large majority of his workforce after digging his heels into the back-to-office policy, other companies may follow suit. This is a strategy that Lewis and other experts have warned against.

“I imagine some companies will closely monitor and, if successful, follow his lead,” Gold said. “But really many companies have already decided that the productivity of their employees and product output has not been negatively affected by having remote employees, at least part-time. So, if it is not broken, then why fix it going to make people unhappy?

Gold says the biggest problem Mask and his companies face really revolves around management style. You either believe your employees get results without looking them in the shoulder or not.

“If you really think you need to personally oversee them full-time, I would suggest that your company has a bigger problem,” Gold said.

Gartner’s Crop says that enabling flexible working conditions is not just about attracting and retaining employees, which it does. “What companies often don’t think about is the benefits of remote and hybrid mental health, and it’s huge.”

Lewis advised other companies to keep an eye on the impact of the mask order. Even in the unlikely event that the mask could actually show a successful outcome “without any hint of turnover or problems filling the job,” Lewis said companies should still be concerned about pursuing the lawsuit.

“Overall, I think Elon regularly checks the boundaries of his company and personal brand. The move is badly anticipated and it is a defeat, “Lewis said.

Copyright © 2022 IDG Communications, Inc.

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