CEOs are so desperate for a return to office that they’ll give employees who come back raises, promotions

The return-to-office war is apparently turning into the return-to-office bribe. Again. More and more CEOs want employees to return to the office full-time, according to a new CEO Outlook report from professional services firm KPMG, and an overwhelming majority plan to lure employees back with preferential treatment.

Sixty-two percent of the more than 400 U.S. CEOs surveyed by KPMG want to see their office workers return over the next three years. That’s a stark increase from the share of CEOs who said the same in 2022 (34%). Meanwhile, another 34% expect these workers to be hybrid in three years, down from 45% in 2022, and just 4% envision a fully remote work environment (from 20% in 2022).

To get workers back to the office, 90% plan to reward those who work in person with favorable assignments, raises, and promotions. That approach may be key to attracting and retaining employees, which the CEOs surveyed—and, separately, thousands of other organizations—identified as their top operational priority to achieve company growth objectives through the next three years.

“Just ordering everyone back to their desks is unlikely to sit well with workers used to hybrid, so the challenge is to find ways to ease their return and be clear why this is beneficial to them,” writes Jon Holt, chief executive and senior partner of KPMG’s U.K. business. “For businesses like mine, carrots rather than sticks are the best tools for this job.”

Some companies have already turned to financial or performance-based incentives, albeit by using them as the “stick.” Google informed employees via an internal memo in June that office attendance would be a factor in performance-based reviews, and the law firm Davis Polk & Wardwell told staff in March that their bonuses could get cut if they don’t comply with the firm’s hybrid policy.

Employees may actually be inclined to come into the office if enticed with financial perks. Thirty-eight percent of hybrid workers surveyed by communications equipment company Owl Labs said they’d commute to the office more often if their employer covered their transit costs. Another one-third said they’d do the same if their employer paid for meals, snacks, and beverages, and 28% would go in voluntarily if their employer subsidized their childcare or eldercare costs or provided on-site options for care.

That said, some are skeptical of these incentives and argue that over time, productivity may decline if employees are rewarded for compliance instead of performance. “High-quality employees will see that performance and productivity aren’t rewarded as much, and they’ll leave for companies that value performance and productivity over presentism and brown-nosing,” Gleb Tsipursky, CEO of the leadership consultancy Disaster Avoidance Experts, told Fortune’s Paolo Confino.

Paige McGlauflin
paige.mcglauflin@fortune.com
@paidion

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Speaking of RTO, Smucker’s turned heads in late August when The Wall Street Journal reported on its office attendance policy, which requires that employees come to the office for 22 “core” weeks per year. 

Jill Penrose, Smucker’s chief people and administrative officer, who executed the plan, now tells Fortune the company isn’t using attendance to keep score but rather focusing on purposely bringing employees together. “We didn’t start with how many days [are required in-person] or with rules and requirements,” says Penrose. “We started with what we want to accomplish: developing people and capabilities and maintaining a vibrant culture.”

Around the Table

A round-up of the most important HR headlines.

- Startups that lost a founding employee within six years of joining the company saw a 6% drop in head count and revenue after five years compared to those that didn’t, according to a new study. Wall Street Journal

- Zoom CEO Eric Yuan said at his annual Zoomtopia conference this week that he mandated a return to office so employees could feel the pain of hybrid work and create better products. Washington Post

- The Kaiser Permanente strike in California may be the largest in health care history, but it won’t cost the company much. However, strikers’ demands for better pay and work hours could metastasize across the industry. Axios

Watercooler

Everything you need to know from Fortune.

Temp check. The United Auto Workers union says it's also fighting for temporary workers at Detroit’s Big Three automakers. Automakers often rely on the lower-paid workers to fill in for full-time employees and staff up when production surges. —John Seewer, Tom Krisher, AP

Sick day pay. California Gov. Gavin Newsom signed a law on Wednesday that provides a minimum of five days of paid sick leave a year (two more than before) to workers in the state. The law will go into effect in January. —Sophie Austin, Tran Nguyen, AP

Out of range. A large swath of Slacks’ roughly 3,000 employees have yet to reach the “ranger” level on parent company Salesforce’s Trailhead learning platform, which requires around 40 hours of training. As a result, Slack employees will pause their regular job duties next week to catch up on training. —Kylie Robison