Month: October 2025

The economics of office presence

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The virtualization and decentralization of knowledge work has greatly reduced the need for office attendance. But it nevertheless holds value for many knowledge organizations as shown by return to office policies mandating attendance for all or some of the work week.

That value is being assigned and weighed by both knowledge organizations and workers in terms of compensation and talent attraction and turnover.  

The math of the office attendance value equation works roughly inversely. Some organizations offer premium pay for office attendance. It’s also being valued insofar as spiffing up offices to make them “worth the commute.”

Conversely, some knowledge workers are willing to accept lower compensation for roles that don’t require much if any office attendance. A paper issued earlier this year by the National Bureau of Economic Research found on average, tech workers are willing to accept a 25 percent pay reduction for roles that don’t require full time office attendance.

This explicitly recognizes the personal cost in terms of time and money incurred by the commute whereas traditionally it was externalized onto staff and seen as part of the job. Now it’s being factored into the employment relationship. Higher compensation for roles requiring regular office presence can offset employees’ cost of commuting.

On the other hand, companies that do not demand office attendance and thus remove the cost of commuting from the employment bargain are being flooded with job applications per this recent Business Insider article, reflecting their high desirability among knowledge workers.

“It’s not about where we work, but how,” Melanie Rosenwasser, chief people officer at Dropbox, told Business Insider. “Flexibility and agency are the new currencies of work.”

The length of the commute and housing costs also factor in. The math there is well established and similarly inverse. Housing tends to cost more nearer to downtown business districts or office parks and campuses or with reliable and fast public transit. Conversely, housing costs tend to be lower in outlying edges of metro areas but come with longer and more time-consuming commutes that take away from employees’ personal time.

As for talent attraction and retention, the most skilled and knowledgeable staff know they are marketable and factor that into their calculations. Knowledge organizations that require office attendance run the risk of losing talent not inclined to work in a mandated organizational office setting.

Buildings and bureaus: RTO isn’t only about trust and control

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Return to office (RTO) isn’t only about control or trust or workplaces. It’s more fundamental. It’s essentially about organizational identity.

For decades, public and large private sector organizations have defined themselves largely by how they functioned, structured in the industrial age management model as vertical bureaucracies exercising command and control management. The hierarchy is represented in the building with the building as totem. Leadership sits in the upper floors of the building and corner offices. Staff in cubicles in the center and on lower floors.

The building is at the core of organizational self concept and sense of purpose. The org may have started humbly in a garage like Apple but now a large multi building campus represents it nearly as much as its branding. In Apple’s case, for example, the modernistic circular spaceship headquarters building.

Apple founder Steve Jobs described the personal computer as the “bicycle for our minds.” That untethers the mind from time, place and distance. But the spaceship houses the bodies containing the minds of Apple employees. It’s the mothership, the corporate edifice.

Decentralized, virtual knowledge work first made possible by Apple computers and later information and communications technology (ICT) advances is at odds with that. Hence, we see resistance expressed as RTO. It really means return to the organization — get back in the building.

Or as some orgs have framed it to staff, you don’t have a future with this org if you don’t regularly appear at the building that represents it and should find another role outside of the org.

ICT has disrupted that. knowledge work no longer requires the industrial age buildings and bureaus of the 20th century or daily commuting to and from them. It’s done wherever knowledge workers are and thinking. Rapidly processed, communicated and recorded on ICT tools like personal computing and communication devices and the cloud.

The essential questions knowledge organizations face in the 21 century:

How are they defined in the post-industrial age (or “smokestack era” as Alvin Toffler termed it in his 1990 outlook on the 21st century, Powershift)? If buildings and bureaus no longer essentially define them, what does?

Since knowledge work has been traditionally defined by Dave Rolston’s four dead kings of work:

  1. One job title
  2. Performed under one manager
  3. At one time
  4. At one place

How will it be optimally defined and organized going forward?

Redefining office space use in the post CCO era

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Return to office (RTO) policies have created controversy, framed as a set to between executive leadership wanting staff to work in centralized, commute in offices (CCOs) and staff preferring to work in their home offices as they did during the public health restrictions during the pandemic years.

RTO mandates have been used to encourage resignations as a blunt personnel reduction strategy, sending the message if you don’t put in office attendance you don’t belong in the organization and should move on.

Another way to view RTO is future shock. As information and communications technology (ICT) and personal devices grew increasingly sophisticated and useful over the preceding four decades starting with the personal computer in the 1980s, it was becoming increasingly clear that they would disrupt the office as it had been known. No longer would daily office attendance with the often time and energy sucking commute be necessary.

The majority of knowledge organizations however didn’t adjust to this slowly emerging reality until the pandemic restrictions forced them to do so and in a space of just two years. The future of knowledge work had arrived but too quickly for organizations to adjust.

So many adopted RTO to lessen the shock. That’s not necessarily maladaptive, but a natural reversion to the known and familiar. That creates a pause to allow time to figure out how to go forward —  and not going backward per se.

What’s truly adaptive is recognizing the primary impact of ICT: that knowledge workers no longer must necessarily report to CCOs because that’s the only location where the tools they needed to work were situated. Now they are portable and can communicate easily. That requires rethinking the use of office space and determining its best and most logical use going forward.

One model that looks promising is that of Stamford, Connecticut–based Synchrony, a branded credit card issuer.

According to this item posted October 6, 2025 at Fast Company, the company’s 20,000 employees work in their home offices and at company offices “when in person gatherings occur for training, leadership meetings, innovation sessions, and culture-building events.”

That redefines the office from a regular workplace in their traditional sense to an event driven gathering venue. There, both the presence in the office and the transportation of staff to get there is defined by a specific business purpose and not just showing up. That provides a guiding vision for the post pandemic future, offering a useful template to knowledge organizations experiencing future shock.

No assembly required

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As information and communications technology tools decentralize and virtualize knowledge work, it challenges knowledge organizations to reconceptualize working. In the pre information economy industrial age, work and education involved assembling: in schools, factories and offices.

Now the office is optional.

Making this conceptual shift has proven difficult for many knowledge organizations. That’s because their leaders often believe assembly is essential for collaboration and teamwork. Hence, they demand staff attendance at least some of the workweek in a centralized, commute in office.

Assembly is no longer needed is when information of all forms is easily shared virtually.

Forced assembly hasn’t gone over well for staff who find themselves going though the motions of assembling, swiping their badges to create a record of attendance. Or sitting in a cube farm and having Zoom or Teams meetings with colleagues in other nearby cubicles – something they could just as easily done without making the commute trip there.