Tesla and SpaceX CEO Elon Musk this week issued an ultimatum to white-collar workers at both companies: return to headquarters or face dismissal.
The request to work at least 40 hours in the office was initially revealed by leaked employee emails. Later on Wednesday, Musk appeared to confirm his edict on Twitter: When asked to comment on the email for "people who think coming to work is an archaic concept," he replied, "They should pretend they work somewhere else.
Musk's letter to senior staff clarified: "The office should be where your real colleagues are, not in a distant pseudo office." If he doesn't show up, we'll assume he's resigned.
Musk justified his request to return to the office, writing, "it's less than what we're asking factory workers" to do. His directive left little room for maneuver for those with extenuating circumstances.
"If there are particularly exceptional contributors for whom this is impossible, I will review and approve those exceptions directly," Musk wrote.
The request for Tesla and SpaceX employees to return to the office comes at a time when companies around the world are rolling out their hybrid work plans, allowing flexibility in when, where and how often employees They must be on the site.
It also comes at a time when the Great Resignation sees workers turning to competitors for better pay and benefits or choosing entirely new careers.
Human resources experts and industry analysts weren't surprised by Musk's request, as his past behavior shows a willingness to impose his will at any cost.
Market research shows, however, that organizations that continue to impose their will on their employees and refuse to adapt their management approach will lose their best employees to companies that offer more independence.
A poaching opportunity?
In an environment where technology company share prices have fallen sharply in recent months, many organizations are looking to competitors with less flexible working policies and other perks.
"Some of these companies see this as an opportunity to attract external talent," said Brian Kropp, senior vice president of Gartner's human resources practice.
Look, Elon Musk is a very smart guy. There may be 20% or 25% of the employees who end up leaving, and those may be the ones he wants to leave, but a good part of that 25% is in demand in other countries.” companies,” Kropp added.
Employee surveys have shown that up to 40% of workers would quit their jobs if they were not allowed to work remotely.
Kropp admitted he had no idea what Musk was thinking, just that "he zigzags when a lot of others zigzags."
"When you look at the data, it's clear that companies are embracing hybrid working," Kropp said.
Last week, Gartner completed its survey of 180 companies and found that organizations expect about 25% of their workforce to be fully remote, 60% to be hybrid, and about 15% to be in the office full-time. "What we found is that employees who work remotely or hybrid perform as well or slightly better than office workers," Kropp said.
Analysts do not believe that Musk is using his RTO request to intentionally eliminate his workforce to create a more efficient organization; it is more about knowing that his companies have a brand strength that few others have.
“Tesla has far more applicants than employees, so the odds are in their favor that they won't see a material fallout in terms of employee numbers. [departing] but there will be consequences for the brand,” said Amy Loomis, director of research for IDC's Global Market Research Service on the future of work.
"For a business built with a focus on the future, it's definitely a step back in time," Loomis added.
Jack Gold, principal analyst at J. Gold Associates, was candid in his summary of Musk's intent. "I don't think he really cares. He wants to be in charge of everything, and once he has an idea of how things should work, he does it anyway,” Gold said. "So this kind of edict shouldn't come as a surprise in the context of Elon Musk's management style."
Tesla did not respond to a request for comment from Computerworld.
Where the RTO orders fell
Musk is not the first CEO to demand a return to office, but it is the first time the consequences of failing to comply have been so vehemently laid out.
In May 2021, JPMorgan CEO Jamie Dimon weighed in on the idea of remote work, saying it "doesn't work for people who want to rush."
"It doesn't work for culture, it doesn't work for idea generation," Dimon continued. “We are receiving criticism about going back internally. But it is life.
Nearly a year later, however, backlash from employees appears to have softened Dimon's position. In April of this year, Dimon admitted that he expects only about half of his 270 employees to return to the office full time, with 000% working entirely remotely.
Apple, another company with unparalleled brand power, in April began requiring employees to spend at least three days in an office each week. The reaction was almost immediate.
An employee group calling itself "Apple Together" has opposed the hybrid work mandate, issuing an open letter to executives criticizing the company's hybrid work pilot program, calling it inflexible.
Loomis said the consequences for Tesla and SpaceX as companies will be a loss of good engineering talent and an impact on both Musk's "personal brand and the brand of his companies in terms of good faith."
"Look how well Jamie Dimon did," Loomis added.
David Lewis, CEO of OperationsInc, a Connecticut human resources consultancy, said companies dictating a return to the office full-time, or how employees must work remotely, are missing the big picture. Lewis noted that the unemployment rate in the United States is 3,6% and there are now more than 11 million job openings.
For information technology workers, unemployment is just 2%, according to CompTIA, a nonprofit association for the IT industry and workforce.
But, as Loomis pointed out, Tesla is an outlier with a reputation for a fiercely loyal workforce and potential workers finding their way to its doors.
“In most companies, a move like this, given the job market, would be strategically poor and likely lead to many leaving. It's Tesla, and as such [Musk] may have enough cache in his brand and culture to get away with it,” Lewis said. “However, this just means, in my opinion, that instead of a mass exodus, he will lose fewer [employees]. The question is how much less? »
Will other CEOs follow Musk's lead?
Ultimately, Musk will regret his strategy, Lewis said, because he is betting that his people and their priorities will be very different from those of other organizations, "for the simple fact that his desire to work for Tesla outweighs his desire to work for Tesla." work better for Tesla." work-life balance.”
"It just launched a massive ad campaign communicating that Tesla is an 'office work only' company, which could prove very problematic for those trying to build a pipeline for themselves," Lewis said. .
Still, if Musk manages to retain a large majority of his workforce after addressing the back-to-office policy, there's a chance other companies will follow suit. It's a strategy Lewis and other experts warn against.
“I would imagine that some companies will be watching closely and following suit if it is successful,” Gold said. “But in truth, many companies have already decided that the productivity of their workers and the production of their products have not been negatively affected by having remote workers, at least part-time. So if it's not broken, why fix it if it's going to make people unhappy? »
The biggest problem Musk and his companies face is really management style, Gold said. Either you trust your employees to deliver results without looking over their shoulders, or you don't.
“If you really feel like you have to supervise them full-time in person, then I would say your business is in bigger trouble,” Gold said.
Gartner's Kropp said enabling flexible work arrangements isn't just about attracting and retaining employees, which it is. "What companies often didn't think about was the mental health wellness benefits of distancing and hybridization, and that's been huge."
Lewis advises other companies to monitor the impact of Musk's tenure. Even in the unlikely scenario in which Musk can indeed demonstrate a successful outcome "without any trace of turnover or difficulty filling jobs," Lewis said, companies still need to be careful to go with the flow.
“Overall, I think Elon regularly tests the limits of his business and personal brand. This movement is ill-conceived and a loser," Lewis said.
Copyright © 2022 IDG Communications, Inc.