The return-to-office battle just hit a tipping point that gave companies a win

Summer is officially over, and companies’ push to bring more workers back into the office is showing initial signs of working, according to one indicator.

After Labor Day weekend, the occupancy rate of workplaces in 10 major cities surpassed the halfway mark for the first time since July, hitting 50.3%, according to Kastle Systems’ 10-city Back to Work Barometer. The company tracks keycard swipes at office buildings and other entry data for businesses.

Many employers had over the last several weeks signaled that they would start enforcing return-to-office mandates after Labor Day. A July report from JLL estimated that one million office-based employees in the U.S. were facing mandates that would take effect through the end of the year. 

All of the 10 cities tracked by Kastle saw an increase in workplace occupancy around Labor Day, with Houston, Texas, leading the pack. The city saw a weekly occupancy rate of 61.6% from Sept. 7 to Sept. 13, up from 59.7% the previous week.

New York City saw the biggest jump in office occupancy, with a 7.5% jump to 50.1%. 

Occupancy in the nation’s capital of Washington D.C. rose to a new record high since the start of the pandemic, Kastle said, rising to 47.9%, as compared to 43.8% the week prior. 

“This post-Labor Day jump in occupancy mirrors the pattern from the past three years,” Kastle noted. “If the pattern continues, the Barometer may reach a new, higher base level as more workers return to the office.”

But employees shouldn’t bid a tearful goodbye to working from home just yet. The JLL report noted that hybrid schedules are still dominant, particularly among Big Tech. 

The hybrid model will persist, Doug Duncan, senior vice president and chief economist at Fannie Mae, told MarketWatch. The government-sponsored enterprise recently released a forecast expecting a “mild recession” at the start of 2024. 

It makes sense that some employees are not eager to return to the office full-time, Duncan explained. “Remember when they said stay home and work from home, they were giving employees a real wage pay raise because you now had real income that was not being spent on commuting costs.”

But “when you tell them to come back to work, you’re giving them a cut,” he added. “So it’s not surprising people resist.” 

See also: A question for Labor Day: Who won the tug-of-war over remote work?

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