The Return-to-Office Debate: Striking a Balance Between Performance and People
Mark Green • April 7, 2025
The future of workplace flexibility continues to be a hot topic across Australia, as employers and employees wrestle with what the “new normal” should look like post-pandemic. A recent workplace survey revealed that over 75% of business leaders in Australia now require staff to return to the office in some capacity. While hybrid arrangements are still prevalent, a growing number of CEOs are reintroducing office mandates—some even opting for full-time return expectations.
Driving this shift are several factors: concerns over productivity, collaboration, culture, and in many cases, a desire to justify commercial real estate investments. However, while some leaders argue that being physically present in the office fosters performance, others warn of a potential downside—reduced morale, decreased engagement, and higher turnover rates.
Employee expectations have evolved, with flexibility now ranking as a top priority for job seekers. Many are willing to accept lower salaries or fewer perks if it means maintaining autonomy over their work environment. As a result, organisations must tread carefully when implementing office mandates. Blanket policies risk alienating top talent and may ultimately backfire if not aligned with employee needs and preferences.
To explore the complexities of this evolving landscape, Western Sydney Branch Manager at people2people, Mark Green, sat down with Maja Paleka, Director at MPC, for a thoughtful discussion on what’s driving return-to-office trends and how businesses can navigate the tensions that follow.
“There is no evidence… that pulling people from working hybrid into the office full-time has positive impact on productivity.
Opening the conversation, Mark Green noted the widespread return-to-office expectations and asked what was driving this trend. Maja Paleka provided a layered response, highlighting the climate of uncertainty organisations are operating in.
“We are living in a great time of uncertainty,” Paleka said. “In that moment, the most natural thing is to go back to some level of control… we thought everyone being in the office was safe pre-COVID, so it’s like, let’s go back to what we think worked.”
She distinguished between hybrid and full-time return-to-office policies, noting that both are driven by similar pressures—performance concerns, real estate costs, and shareholder influence—but evoke different reactions among staff.
Green followed up by questioning whether forcing people back into the office actually increases productivity. Paleka was clear in her response: “There is no evidence… that pulling people from working hybrid into the office full-time has positive impact on productivity. If anything, we have seen actually completely the opposite.”
Referencing studies from the University of Pittsburgh, she shared that companies enforcing full-time returns experienced a sharp rise in attrition—particularly among women, skilled workers, and senior staff. Attrition increased by 14% in some of these demographics, and companies struggled to backfill these roles in a timely way.
Paleka stressed that these shifts directly impact employee engagement, which is already declining. “Engagement is at an all-time low… if people are having to go back into the office against their preferences, that engagement is going to go down even further,” she said.
Green asked about the future of these mandates and whether they would continue to cause workplace tension in 2025. Paleka was cautiously optimistic: “I actually think this is an incredible time for organisations that are just willing to stop for a second and go, hold on… there's opportunity here.”
Rather than viewing office flexibility as a threat, she encouraged companies to see it as a competitive advantage. “People still want to work. They want to have impact. They want to be in a place where they are respected and valued,” she added.
The conversation closed with a shared sentiment: businesses that build a culture of trust, rather than control, are more likely to thrive in the long term.
What Employers Should Consider Before Mandating Office Returns
As the landscape continues to evolve, business leaders need to approach return-to-office strategies with a balanced mindset. Here are some practical considerations and tips to navigate this transition while retaining top talent:
Gradual Reintegration: Rather than enforcing an abrupt shift to full-time office presence, organisations should consider phasing changes over time. Offering transitional periods gives employees time to adjust and helps employers gather feedback along the way.
Engagement First: Understand that morale and engagement are critical to performance. If mandates are implemented without consulting teams, it could lead to resentment and burnout. Instead, foster two-way dialogue and incorporate employee input when shaping policies.
Flexibility as a Perk: Use flexibility as a tool to retain and attract talent. Employees value work-life balance, and companies that offer it are better positioned in today’s competitive hiring landscape.
Invest in Culture Beyond the Office: Don’t rely solely on physical presence to build culture. Develop virtual engagement strategies, prioritise leadership visibility across both remote and in-person teams, and champion team connection no matter where people work.
Assess Real Impact: Be data-driven. Before rolling out sweeping mandates, assess the real impact of your current hybrid or remote model. Are goals being met? Are teams collaborating effectively? Let performance data lead your decision-making.
Support Managers: Equip people leaders with the right tools and training to manage distributed teams. This ensures expectations remain clear, accountability is maintained, and team dynamics remain strong.
Recognise Shifting Values: Employees today are more willing than ever to leave roles that don’t align with their lifestyle. Retention depends not just on pay and perks but also on perceived autonomy and mutual respect.
In 2025 and beyond, the companies that succeed will be those that balance business needs with the evolving expectations of their workforce. Rather than defaulting to old norms, forward-thinking organisations have the chance to rethink what productivity, presence, and performance truly mean.
Ultimately, it’s not about where people work—it’s about how they feel when they do.
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In business since 2002 in Australia, NZ, and the United Kingdom, people2people is an award-winning recruitment agency with people at our heart. With over 12 offices, we specialise in accounting and finance, business support, education, executive, government, HR, legal, marketing and digital, property, sales, supply chain, and technology sectors. As the proud recipients of the 2024 Outstanding Large Agency and Excellence in Candidate Care Awards, we are dedicated to helping businesses achieve success through a people-first approach.
