How is the Delta Variant Affecting the Return to the Office?

When it comes to getting employees back to the office, the U.S. is leading the world. But as the Delta variant of COVID-19 continues to spread and cases rise once more, that could stall the return to the working world.

Despite the U.S. push to boost vaccination rates, the spread of COVID variants has resulted in increased infection rates, especially in states where more people have refused to get jabbed. In the past two weeks, the number of new cases in the U.S. overall has increased 171%, compared to just a 27% increase across the world, according to the New York Times. We’ve also seen a 42% increase in deaths, compared to just a 24% rise globally.

Still, say experts, that likely won’t put an end to the push to reopen businesses. But it could slow things down some.

“This is not an emergency break action, just a tapping of the brakes,” says Tom Smith, associate professor in the Practice of Finance at Emory University’s Goizueta Business School.

Some notable businesses are already slowing things down. Apple, on July 20, pushed back its return-to-office plans by at least a month, telling employees the new target to return was Oct. 1 instead of early September – and that could shift again. The company said that it would continue to monitor the spread of the virus and would give workers at least one month’s notice before they are expected to return.

“As the situation continues to evolve, we’re committed to the same measured approach that we have taken all along,” it said in an internal email. The action came after 1,800 workers signed a letter saying they felt a forced early return to the office would cause some people to leave the company.

Not every company is following that path, though.

Insurance giant American International Group told employees on July 21 that Sept. 14 will be the “official global re-entry date” for staff to return to the office. And Morgan Stanley is not only insisting its own employees be back at work by Labor Day, its chief legal officer recently told outside law firms that work with the company that if they want to keep the banking giant’s business, their lawyers would have to be in the office.

How widespread that sentiment might be, though, is still unknown.

“There’s not enough evidence to know what the pulse is,” says Smith. “There are a lot of people who want to get back to work. There are plenty of companies saying we liked this in-person environment and we want to get back to that.”

There certainly was momentum to get back to the office in June. A study by workplace experience platform provider Robin found that in June, the percentage of employees returning to the workplace increased 50% in the U.S. That brought the average office capacity up to 20%, double the capacity reported in March.

The climb has been a steady one, says Robin, with utilities, hospitality, government and manufacturing leading the way. The U.S. is currently tied with India in return to office rankings, a vast improvement from its #17 ranking in May. Poland is second and China is third.

“The Delta variant will impact the speed at which organizations can return but it will not change overarching return to office strategies,” says Zach Dunn, co-founder and VP of Customer Experience at Robin. “We anticipate it having the most impact on the pace at which employees are returning to the office internationally. So far, we haven’t seen any of Robin’s clients change their RTO strategy because of the Delta variant, but we have started to hear it come up more in meetings with workplace leaders.”

One thing Delta could spur companies to consider, especially if it spreads like wildfire throughout an office, is mandating employees to get vaccinated, a controversial, but legal, option. Another possibility? Businesses that have been hesitant to embrace the hybrid work model might become more open to it.

“I think there are a lot of companies that can’t play that game – like Chipotle and McDonald’s,” says Smith. “There’s no hybrid work model for them. That’s not a possibility. But those that have built their company on a tone of ‘This is how we behave. This is how we interact.’ – these companies are the ones pushing forward with returning to the office. I think a lot of executives are evaluating the value of spending tens- or hundreds of thousands of dollars on physical space if their workers are as productive at their own hones. I don’t think there’s a one size fits all response.”

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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