Why Elon Musk's back-to-office mandate will backfire

The Tesla CEO decreed that all employees need to work in the office — or else. He will change his mind.

Last week, Elon Musk said in a leaked email to Tesla executives that Tesla workers need to stop working from home and spend at least 40 hours per week in the office.

"If you don't show up, we will assume you have resigned," Musk wrote. When challenged on Twitter about the email, he replied: "They should pretend to work somewhere else."

The decree felt shockingly out of touch with what we've learned over the last two years about remote work and the employees who now insist upon it.

A few days later, he announced that Tesla needed to cut staff by 10% (around 10,000 employees). Coincidence? I think not.

It turns out Musk wasn't delusional. Instead, he was trying to shed employees on purpose.

Why Musk's remote-work attitudes are dishonest and wrong

Musk said on Twitter that working from home is "pretend" work. He's being dishonest. He doesn't really believe that.

Tesla's corporate culture is driven by employees working way more than 40 hours a week. In fact, the company's success and dominance in the electric car market depend on employees working 60 or 70 hours a week. (Musk himself claims to work between 80 and 90 hours per week.)

And yet Musk intends to mandate just 40 hours per week in the office.

Anything beyond that is just "pretend" work? If Musk really believed working from home is just pretend work, he would have mandated that all 60 or 70 hours take place in the office.

No. Musk knows employees who work 40 hours in the office and the rest at home are being very productive working remotely.

In fact, by now, everybody should know that.

According to new data from Stanford University professor Nicholas Bloom, work-from-home employees are more productive now than they were at the start of the pandemic. (That conclusion is from self-reported data and objective measures of productivity.)

It turns out that employees adapt behaviorally and psychologically to remote work. And companies adapt their management systems, technologies, and workflow systems to follow suit.

An additional factor, according to Bloom, is that we're no longer under the oppression of lockdown — employees are re-engaging with their social support systems — daycare, school, friends, and all the rest.

Remote workers are happier, too, according to the mental health research website Tracking Happiness. That means they're more devoted to the company's objectives, less likely to quit, and more productive.

 Why Musk will change his tune

I'm predicting that Musk will soften his mandate when he sees who quits and where those valuable employees go for their new jobs. Every major Silicon Valley company that laid down in-office edicts has changed its minds.

Apple backtracked on a similar requirement — it had announced that employees would have to work in the office at least three days per week. Employees rebelled, and a major AI leader quit and went to work for rival Google.

Google itself recently backed away from such mandates. The Google Maps group told contractors they were required to work in the office full time starting June 6.

After they threatened to strike, Google extended the deadline by three months.

Musk is a capitalist. So, he should know that the job market is a market.

Employees — including highly valuable employees that Tesla depends on for its success — will quit and go to work for Tesla's competition.

While he may think forcing in-office work hours will alleviate Tesla from the burden of layoffs, a blanket mandate takes away control over how many employees leave and which ones actually walk out the door.

In general, I expect the company's most valuable employees to get the best offers from the competition and will be the first to depart.

Elon Musk is a lot of things — a Twitter troll, hip-shooter, and renegade — but he's not stupid. So he'll change his mind on the mandate.

Copyright © 2022 IDG Communications, Inc.

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