Return-to-office is a prisoner’s dilemma

Many companies are this year announcing return-to-office plans. These announcements often contrast starkly to positions these same…

Many companies are this year announcing return-to-office plans. These announcements often contrast starkly to positions these same companies publicly announced only months prior.

Snapchat, for example, announced the company would be leaning into remote work during the pandemic, going so far as to call itself a remote-first work culture. CEO Evan Spiegel has now flipped that policy, requiring at least four days per week of in-office work from Snap employees.

The CEO of Utah telecommunications provider Clearlink praised one of his senior VPs for selling the family dog in order to comply with his return-to-office mandate.

Apple faced a mini-rebellion when it asked employees to return to the office, with an internal petition protesting the mandated three weekly in-office workdays. The statement acquired over a thousand employee signatures.

Elon Musk’s comanies, including Twitter, SpaceX, and Tesla, all require 5 days in-office per week. For Twitter, this has meant a full reversal of the company’s former generous work-from-home stance. Musk has defended this rule by characterizing remote work as immoral — His argument essentially being that for some people to insist on continuing to work under tele-present conditions while there are others who cannot tele-commute due to the nature of their duties is elitist and unfair. (I feel compelled to note that one could just as easily make the opposite argument: that requiring those who can work remotely to work in-office when their duties don’t strictly require it encumbers workers with an unnecessary burden, and could thus similarly be characterized as morally wrong.)

JP Morgan Chase and Goldman Sachs are among the growing list of other companies rolling out new return-to-office requirements, in reversals of their remote workplace pivots during the COVID-19 pandemic.

The companies making headlines with these new policies seem primarily situated in the tech and finance sectors. Is that because those are also, statistically, the least unionized industries? While CEOs at these companies may recognize that they do have more rug-pulling leverage, union-negotiated contracts across all industries in the post-pandemic era have largely not prioritized WFH policies in their collective bargaining agreements.

Meanwhile, numerous studies released in the past several months have shown that employees feel more engaged, happier, more trusted, and more productive when working from home. According to these surveys, less than ten percent of office workers want to go back to the office full-time. What is the missing puzzle piece then? Why drag employees back to office environments when most who are able to prefer by a long shot working from home?

In trying to understand this post-Covid dynamic, we can employ the lens of game theory — in particular, the thought experiment known as the prisoner’s dilemma. To summarize the substance of the prisoner’s dilemma: Imagine a scenario where two prisoners in police custody have the option either to defect (confess to the crime of which they’re accused) or to cooperate (deny everything). If Prisoner A chooses to cooperate but Prisoner B defects, then Prisoner B gets the slightly better outcome (a reduced sentence) and Prisoner A suffers the bigger penalty (a longer sentence). Likewise, if Prisoner B cooperates but Prisoner A defects, then Prisoner A “wins” the game, while still paying some penalty for his crime, while Prisoner B suffers a far worse penalty. If both Prisoners A and B defect, then they both face equal penalties; both of them having confessed to committing a crime, they will both face sentencing. However, if Prisoner A and Prisoner B both independently cooperate, then they both receive the best possible outcome: the police have no evidence, and must let both parties go scot-free.

The debate over work-from-home versus return-to-office can be understood in light of this framework. Adopt for a moment the perspective of a CEO, where deciding on a return-to-office is the act of cooperation, while committing to work-from-home means defection. Instead of a criminal sentence, the penalty is employee attrition. If you dictate that your employees return to the physical office but your competitors do not, there is a stronger likelihood of losing valuable talent to companies with remote-friendly working conditions. If you and your competitors allow work-from-home to continue, then all of you, as industry decision-makers, must adjust policies, expectations, and operations to reflect this shift. While this scenario does not lead to a talent exodus, it does entail some other costs. Potential costs to this mutual “defection,” the acceptance of a “new office normal,” could include investors pointing out the wasteful operational expense of unused office space. Additionally, investor pressure from commercial real estate interests may also oppose such leadership decisions. On the other hand, if, as a CEO, you “cooperate” with your competitor CEOs, all of you simultaneously insisting that employees need to work in-the-office now, then no one has to adjust company policies to operate in a remote company environment. The effect of this will be employees open to recruitment finding their choices for alternative, more accomodating employers scarce and in low supply. In this multi-player economic landscape, where CEOs want to avoid the costs (real or potential) of allowing their people the ability to work remotely, cooperating companies need as few “defector” companies in their industrial sector as possible. With their other choices few and far-between, employees seeking the freedom to continue working from home will eventually give up on their WFH-oriented job hunts and decide to stay on in their current positions.

Despite the various explanations put forth in press releases and company memos, which have ranged from concern over commitment to the company to an enhanced environment fostering collaboration, we might also consider that, even if these reasons have some truth behind them, corporate decisions often have various unspoken factors that go into their consideration as well, and a prisoner’s dilemma style analysis may be one such unspoken pressure.