Elon Musk says workers should return to the office or quit. It’s a big gamble: ‘Tesla is kick-starting its own local Great Resignation’
Elon Musk is giving his employees an ultimatum.
Tesla’s TSLA,
The email in question, dated May 31 and signed “Elon,” was candid, and was addressed to the electric-car maker’s executive staff. It was bluntly entitled: “Remote work is no longer acceptable.”
The Great Resistance has seen employees pitted against companies over whether they should return to the office full time after more than two years of working from home. The COVID-19 pandemic has turned people’s lives upside down and led to more than 1 million fatalities in the U.S. alone, but it has also given millions of workers a rare insight into the possibility of working remotely, and still being as productive as they were when they were in the office.
It’s not too surprising that some employees are pushing back hard against management’s expectations about returning to in-person work. “If we feel like somebody is trying to force us to do something we tend to push against that change with equal force,” David Schonthal, professor of strategy at Northwestern University Kellogg School of Management. “One thing that human beings value above all else is our autonomy. Over the last two years, we lost the camaraderie and personal interaction with our colleagues, but we gained our autonomy where we can make our own schedule.”
“‘If we feel like somebody is trying to force us to do something we tend to push against that change with equal force.’”
In the aforementioned Tesla email, Musk said that exceptional circumstances would be considered and reviewed directly by him, but noted that managers could not just show up at the most convenient Tesla office. The email also read: “Moreover, the ‘office’ must be a main Tesla office, not a remote branch office unrelated to the job duties, for example, being responsible for Fremont factory human relations, but having your office be in another state.”
For those who can work from home part- or full-time, this may be a luxury problem. Tesla’s factory workers do not have the privilege to work from home, and may have little appreciation for those managers who choose not to be on site full time. Similarly, teachers, medical workers, retail workers and service workers are, for the most part, working in-person. In fact, the Labor Department says only 7.7% of employees teleworked in April, although the Federal Reserve Board’s survey on Americans’ economic well-being released last month estimated a higher percentage of employees (22%) are working entirely from home.
Tom Murphy, professor of management at the MIT Sloane School of Management in Cambridge, Mass., said it’s hard to predict what Musk will say and do, and hard to say what will happen with Tesla, “but in the long run employees will vote with their feet and choose to work in companies which give them more flexibility about where and when they work. This is how the markets work: buyers and sellers find people they want to do business with — in this case, it’s happening with the labor market.”
“‘Tesla is kick-starting its own local Great Resignation.’”
There will always be senior executives who feel strongly that workers should be in the office much or all of the time, and some companies may choose to work that way, he added. “But I think the tide of history is against that. More and more companies will give more and more workers more and more freedom about where they work. Technology makes it possible, in many cases, to be more or just as productive in a way that is time efficient and life-friendly for the workers.”
So how many workers — at Telsa and elsewhere — would actually jump ship? “In response to Musk’s demand, almost 60% of employees will return to the office full time,” said Nicholas Bloom, a professor in the department of economics at Stanford University, “but about 7% are likely to quit on the spot and about 30% actively look for another job.” That’s based on his own monthly poll of 2,500 workers.
“Typically, the folks quitting will be higher educated in hot areas like IT and finance, where many other firms are offering work-from-home for 2 to 3 days per week. So the majority of employees will return, but Tesla is kick-starting its own local Great Resignation,” Bloom added.
Other global surveys suggest a higher percentage of workers would consider leaving or have already found a new gig. But that also assumes they would be entering a still-strong jobs market. There is another game-changer that could cause workers to stay put: The specter of a recession.
“‘Employees will vote with their feet and choose to work in companies which give them more flexibility about where and when they work.’”
However, Murphy said there is an important missing piece in the working-from-home debate — informal interactions that don’t happen in formally scheduled meetings. “These are things that happen in the hallway or next to the coffee machine. Those informal interactions can also be supported online.” Murphy said he was working on his own alternative to Zoom ZM,
Musk isn’t the first CEO to vent. JPMorgan Chase’s JPM,
What Musk tweeted likely reflects what many companies are thinking with respect to working from home, and the need to get workers back into the office, “but most wouldn’t take the risk of framing it as a blanket statement like that,” said Vanessa Burbano, an associate professor of business at Columbia Business School in New York.
Burbano adds: “So as not to alienate or drive away employees who place a lot of value on flexibility and the ability to work from home, companies that want to get workers back into the office will want to do so in a way that says to these workers, ‘We hear you, we understand that you place value in this, let’s find a compromise.’”
Ultimately, there is a valuable lesson for the next CEO like Musk or Dimon who chooses to throw down the gauntlet, Schonthal said. “Co-design a return to work with your employees instead of forcing your will or decision upon them,” he said. “When employees feel like they have authorship in the change or return to work, it diffuses any ‘reactance.’ They feel like they have a hand in it themselves, and it makes them much more receptive to change.”
