By Melanie Dabu, Partner at DK Recruiting
WFH, WFA, RTO, Hybrid…trying to map out what’s trending with companies’ work location policies feels less like drawing clear lines on a graph and more like tracking a moving target.
With increasing momentum over the last few years and now ten months into 2025, how has the push for RTO, Return To Office, affected hiring in the tech sector? What hits did the industry take that were a temporary blip, and which ones have a lasting effect?
The data confirms what we’ve known in our gut – that RTO mandates have triggered a slow-bleed in the talent market, a market that has yet to settle into a new norm.
The challenge of losing talent
A study of S&P 500 companies in the tech and finance sector reports a 14% jump in turnover post-implementation of the mandates, settling to around a 9% overall increase, with higher rates among senior and skilled professionals and a notable 12% among women. Other studies note the impact of “brain drain” from companies losing their most senior-level talent, charting RTO from companies like Apple, SpaceX and Microsoft, which collectively account for 30% of the tech sector’s revenue.
What we’re seeing in this market. An unprecedented number of talent with impressive on-paper gravitas are actively in the market or are more willing to talk than before. The majority of candidates we meet due to RTO are looking because they were previously hired or retained as a remote employee; they cannot, without significant financial or lifestyle impact, make the life changes needed to meet their company’s RTO policy. We’re not just talking about people avoiding a commute—these are individuals and families who relocated out of state based on remote arrangements. We can debate expectation (this arrangement is on lock forever, right?) vs. reality here, but the fact remains that companies lost good talent when their priorities and their talent’s priorities no longer aligned.
The challenge of hiring and keeping talent
Companies hire for two reasons: growth or replacing lost talent.With 80% of employers at one point reporting losing talent due to RTO and high-performing employees reporting a 16% decline in their intent to stay due to strict RTO polices, employee retention – the act of keeping your talent to begin with – is half the battle.
Whether you’re hiring for replacements or entirely new positions, attracting talent with RTO mandates presents its own set of challenges, with some data showing that in-office vs. remote roles take longer to fill. In fact, data shows that companies offering remote work can grow 1.7x faster. While relocating candidates is an obvious option for RTO places, in 2024, only less than 3% of job seekers end up relocating compared to 2008-2017 rates of over 10%. It’s simple, really: RTO workplaces have a more limited talent pool.
What we’re seeing in this market. Wharton shared findings earlier this year that technology professionals are willing to accept salaries approximately 25% lower in exchange for hybrid/remote flexibility. Based on our interactions with candidates, this tracks, as the phrase “for remote, I am willing to take $ vs $$” is commonplace when discussing compensation expectations. We are also faced with the daily reality that for many, in-office is a hard-pass, or limited to a small commute radius.
More blows to human capital
What we’ve learned so far is that due to RTO, companies in the tech sector:
- lost a lot of senior talent (the brain drain)
- lost talent to direct competitors
- lost a disproportionate number of women workers
- take longer to hire new talent
The cascading effects include a strain on learning and career development for the less senior talent left behind, companies finding themselves being bottom-heavy, and the imbalance of operating with fewer high-value groups, like women or workers with young families.
Flexible expectations: the only reliable constant
In another retrospective, I’d like to look into the benefits of RTO once there’s enough time and data available. But for now, after having examined how RTO is negatively impacting hiring and retaining talent in the tech sector, I navigate this space as a hiring professional with more questions than answers on how this industry will go from one over-correction to another, and where the new norms will land.
Our current reality is that if you’re hiring and can’t offer remote work, expect hiring to take longer, and don’t wait to lean into or increase the competitive advantages you do have. Tout your relocation bonuses, benefits, and company culture early and loudly. Consider finding ways to shorten your interview process without compromising quality. Be very realistic about your specific hiring challenges, and forge a path through them to win.
If you’re a job seeker with a requirement or strong preference to work remotely, expect your job search to take longer and prepare to be more flexible with your compensation expectations. Understand, but don’t be deterred by the fierce competition. Be very aware of your specific job search challenges, and forge your path to win.
While the adjustment period stings, I remain optimistic. The variety of work arrangements has actually expanded, not contracted—which means the tech industry has more paths forward to align company needs with employee priorities.
