Cash for RTO? Utilities Should Tackle the Aging Workforce Challenge Differently

Korn Ferry says some employers offer extra cash to encourage  employees to show up at the office, ignoring so many of the soft benefits of Return to Office (RTO) for their remote and hybrid teams.  

We’re solidly in favor of RTO for utilities despite the popular trends for Work at Home (W@H).  For utilities, the stakes are high as 50%+ of the employee base become retirement eligible in this decade.  The average age of energy sector employees in the US is over 50 years, and 43% of energy and utility companies cite an aging workforce as a key challenge according to a study at Staffbase.  Utilities face a crisis as retiring employees depart the business before imparting their institutional knowledge to the next generation of teams.  It’s a massive challenge made significantly harder by remote work.

We know that some critical work activities benefit enormously from in-person contact.  Consider the importance of getting employees started off on the right foot.  In a study by Microsoft, employees who onboard to a company in-person instead of remote score better on an array of metrics following their first 90 days.  Most importantly, they are 10% more likely to ask team members for advice and feedback, and 7% more likely to discuss problems with their manager and receive feedback.  As utilities face a critical loss of institutional knowledge, starting new employees off in the office paired with their teams, supervisors, and subject matter expert ensures far better knowledge transfer than remote work.

Not all work requires constant in-person involvement, but consider the importance of the start of new projects. According to that same Microsoft study,  in-person project kick-off events produce 14% more ideas.  And, an PwC study reported that 87% of employees acknowledge the office as a critical space for team collaboration and building working relationships.  For teams regularly engaged in project oriented endeavors, RTO can be an essential contributor to productivity, creativity, and ensuring on time and on budget delivery.

Remote employees report different reasons for not wanting a return to the office including the extra cost of commute, day care for their children, eating out and the added cost of office apparel and dry cleaning that contributed to their personal savings windfall during the pandemic.  So, it’s natural for some employees not to want to lose that soft benefit, and we understand why companies may consider paying for RTO.  But, many employees who occasionally return today to the office on a partial basis often find the in-office time not worth it even with extra pay.  Companies need to demonstrate that RTO increases collaboration, career development and mentoring, increased productivity, and a better work-life balance even if they intend to pay teams to return to the office.

Consider the soft benefits in the appeal for teams to come back to the office on a regular basis. Many firms acknowledge the added costs for community, food, and family care, and offer additional services to ease those burdens.  Office lunches, concierge services like on-campus dry cleaning, gym memberships, and day care subsidies may provide more direct benefit than a modest travel stipend or pay “bump” for many team members.  Pandemic era remote work taught employees how to be nimble on conferencing platforms like Skype, Slack, Zoom and Teams, so even when teams return to the building, many people still drop into meetings from their office even when the conference room is only a few steps away.  Be sure to break down those technical “short cuts” to encourage real cooperation and collegiality that encourages teams to increase collaboration and bonding in person.  A few social hours never hurt either.

Utilities face unprecedented risks related to the impending retirement of their aging workforce.  The risk of losing institutional knowledge as more than 50% of employees reach retirement this decade, accelerated by early retirement and other consolidating trends in the industry, creates special challenges only amplified by remote work.  In-person work increases team collaboration and mentoring relationships that improve knowledge transfer and professional development.  Consider a strategic shift to in-person work to mitigate these risks and prepare the next generation of utility leaders for their unique challenges.