CEOs of big US companies are souring on hybrid work

• More CEOs expect hybrid work setups will go away in the next few years.
• A KPMG US survey found that 79% of big-company CEOs expect a full-time return to the office.

The bosses of big US companies are over hybrid work.

This week, Amazon CEO Andy Jassy announced that most of the company's corporate workers must be back in the office five days a week starting in 2025.

Adding to the anti-remote vibes: a new snapshot of CEO sentiment that shows Jassy isn't alone in saying "so long, hybrid."

Nearly eight in 10 CEOs expect corporate workers will be back in the office full time within the next three years, according to a recent survey of 400 chiefs of large US companies by KPMG US.

The 79% of CEOs who see an eventual return to cubicle life for most workers is a big swing from a prior KPMG US survey earlier this year — when only 34% of corporate heads said they expected their teams would be back IRL five days a week.

It's another sign that the RTO fights aren't over and that some pandemic-era work norms might prove as ephemeral as social distancing and mask mandates on planes.

Paul Knopp, chair and CEO at KPMG US, said the survey results indicate that CEOs believe they can speed the development and mentoring of their employees when people are face to face more often.

Yet he also told Business Insider — before Amazon's RTO announcement — that while the survey showed a clear swing in sentiment, that hasn't necessarily translated into widespread action. Even if offices begin to look more like they once did, Knopp said, many workers will enjoy more autonomy than they had in the before times.

"There's still likely to be a lot of flexibility," he said. That might look like working fewer evening hours, showing up a little later in the morning, or not at all on weekends, Knopp said.

Most CEOs expect hybrid will fade

In the survey, which was conducted between mid-July and late August, 17% of chiefs predicted their people would work in hybrid setups in the next few years, and only 3% said they expected their workers to be fully remote.

"There's definitely a strong sentiment to want more in-person interaction — more human connection — with the notion that that can help both employees and employers," Knopp said.

One challenge around splitting time between home and work is that, unlike being in the office or remote full time, there's not one agreed-upon setup, he commented.

"The most complicated or complex working environment to actually orchestrate or pull off is hybrid," he said.

Young people at the start of their careers might want to be in the office, as some surveys have shown. But working parents, for example, might want more time at home, Knopp said.

He said those types of concerns could lead to attrition.

"If I have people back in the office more, do I take a risk that I'm not going to be able to attract and retain the talent that I want?" Knopp said. "We're trying to calibrate all these risks constantly."

If an organization starts to lose key people, he said, leaders might walk back RTO demands.

Attrition is one concern that Stanford economist Nicholas Bloom previously shared with BI. His research found that demanding employees show up more could drive away some workers.

In a study involving Trip.com, Bloom and his collaborators found that when the travel company cut its in-office requirement to three days a week from five, the rate of workers quitting dropped by about one-third. That can be good news for companies because many times, the ones who leave are the ones bosses are sorry to see go, he said.

"Often the best employees leave as they have the best outside options," Bloom said.

GenAI will require that workers add skills

The KPMG US findings also highlighted that many bosses are worried about the aging workforce and the risks that brings to recruiting, keeping employees, and overall culture. About one in three CEOs said retirements and a lack of skilled replacements would have a big effect on their company.

The results come in a year in which Gen Z has overtaken baby boomers among full-time US workers.

CEOs also said the rise of technologies like generative artificial intelligence will necessitate that workers get training. Eight in 10 chiefs agreed that companies should invest in skills development and "lifelong learning" in communities to maintain access to talent in the future.

About seven in 10 CEOs said GenAI wouldn't have a big impact on the number of employees at their company — contrary to concerns that the technology will be a job-killer. In fact, 27% of top bosses said GenAI would create more jobs than it destroys.

Knopp said AI is already taking over some routine tasks and freeing workers to do other things. It can also help compensate for what's lost when workers retire.

"You want to mitigate it through technology," he said. "We're going to mitigate it through upskilling, reskilling."

More reasons to invest in tech

The survey found that those in charge have big hopes for GenAI. CEOs are looking to the technology to boost efficiency and productivity by automating routine tasks, helping train workers, and promoting innovation.

Nearly seven in 10 leaders said GenAI is a top investment priority, especially in IT, sales and marketing, and finance and accounting.

Other investments around the tech are likely to be more defensive. Only 54% of CEOs reported that their companies were "well-prepared" for a cyber attack. Just more than one in three said they weren't sure whether their company's cyber defenses could keep pace with AI. About seven in 10 said they were increasing spending on cybersecurity to help fend off AI threats.

Given all the changes leaders expect AI will bring, it makes sense for workers to become proficient with it, Knopp said.

"The people that have generative AI and AI skills are going to have a big advantage in the marketplace over those that don't," he said.