RTO Has a Price: $7,000 a Year
A new report shows inflationary factors are driving up the cost of returning to the office. Should leaders address the issue?
Gassing up the car costs $50 every week. Lunch costs another $10 per day, and even more in embarrassment if you brown-bag it. Another $500 goes towards upgrading the wardrobe for the office. And then there’s the additional hours of childcare to pay for.
Inflation, the war in Iran, flatlining wages, low hiring, and other macroeconomic factors may be pushing the cost of RTO to an all-time high for many workers—a cause of concern for the leaders who need them motivated. A new report shows that employees who are required to be in the office at least four days per week are spending nearly $6,800 just to get there. The cost is even higher for working parents: Childcare pushes the annual price of RTO to more than $16,500.
The costs aren’t new, says Roger Philby, global leader of the People Strategy and Performance practice at Korn Ferry. “What’s changed,” he says, “is that many of these costs are materially higher today and come after employees have experienced a different way of working.” Or as Tom McMullen, a senior client partner overseeing Korn Ferry’s pay practice, says, “RTO can feel like a pay cut not agreed to.”
Employees’ options may be limited, says Korn Ferry senior client partner Dominic Cottone says. Leaders know that if they aren’t hiring, neither are their competitors, which decreases the chance of people leaving for another offer. At the same time, fears about being displaced by AI make employees hesitant to ask for a raise or bonus to offset RTO costs. Two-thirds of workers in a recent survey cited job security as the top reason why they wouldn’t ask for a raise this year (not that they would get a big one, anyway, or even get one at all). Korn Ferry pay data shows median pay increases of about 3% this year, lower than last year, and projects about the same level or lower for 2027. As a result, Cottone says, employees have adopted a resigned “it is what it is” attitude. “Most people tolerate it,” he says, “because spending more to go back to the office is better than being out of work.”
It’s quite a reversal from a few years ago, when firms first started pushing RTO. At that time, surveys regularly showed that employees would rather leave their jobs than go back to the office. To be sure, one way to offset the high costs of RTO—one that wouldn’t cost firms a dime—would be to give employees an extra day of remote work every week or two. But from a HR perspective, it’s not that simple, says Dennis Deans, global human resources business partner at Korn Ferry. He says that some firms, such as those in the financial services, tech, and telecommunications industries, fought so hard against remote work that unwinding RTO policies now would undermine all their previous arguments. “You can’t keep going back and forth on policies like that,” says Deans.
Still, experts say that leaders need to be concerned about workers losing motivation, given that so many of them are in effect taking a pay cut. AI has dramatically changed the competitive atmosphere for companies that are trying to use the technology to compete more effectively. Those firms are more reliant than ever on human ingenuity and innovation to differentiate themselves, while workers battling with bills may be too drained to contribute. “Organizations may be able to require employees to return to the office, but they can’t require employees to feel good about the additional costs,” says Mark Royal, a senior client partner for Korn Ferry’s Advisory practice. “Compliance with a policy isn’t the same as commitment.”
Deans suggests firms can help reduce the cost pressures of RTO through benefits like flexible spending accounts and incentives like as merit increases. Philby agrees, adding that leaders also need to do a better job of communicating the business benefits of office attendance. “If leaders believe that being together improves collaboration, innovation, apprenticeship, culture, or client outcomes, they should articulate that, and measure the results,” he says.
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