The Real Return-to-Office Challenge: Leadership, Not Location

Startups worldwide are rethinking return-to-office mandates. Research from McKinsey and Gallup shows that flexibility isn’t the problem - poor leadership and weak culture are.

Introduction

The return-to-five-day office work has become a controversial trend across startups. Recent research from McKinsey & Company and Gallup shows that the real issue isn’t technical - it’s managerial and cultural - and stricter in-office policies don’t necessarily increase effectiveness or productivity.

After years of flexibility, startups are torn between the need for collaboration and speed versus preserving a culture of trust and autonomy.According to Gallup, more than 90% of U.S. employees who can work remotely don’t want to return to the office five days a week. The real question is no longer where people work, but how to lead teams effectively and maintain engagement in a hybrid world.

The Return Trend - Without Better Results

McKinsey’s 2024 workforce study found that the share of employees working mostly on-site (four days or more per week) doubled in a single year - from 34% to 68%.Yet, this physical return hasn’t improved productivity, satisfaction, or retention.

Around 39% of employees are considering leaving their jobs, and one-third report high burnout - nearly identical to the levels seen during the “Great Resignation.”The data is clear: the problem isn’t location; it’s leadership quality and organizational culture.

The Management Challenge - The Gap Between Leaders and Employees

McKinsey reports a striking perception gap: 90% of leaders believe their organization excels at fostering connectivity, but only 67% of employees agree. This signals a deep management disconnect.

Gallup reinforces this: 70% of variance in employee engagement is explained by the quality of direct management. In other words, the problem isn’t employees staying home - it’s managers who haven’t adapted to lead hybrid teams effectively.In startups, where speed and innovation are everything, leadership must be built on trust, transparency, and human connection - not just physical presence.

Productivity Doesn’t Drop - When Culture Is Strong

McKinsey’s research also shows no negative correlation between hybrid work and effectiveness. Employees combining office and remote work report similar productivity levels and even lower burnout (28%) compared with fully on-site (35%) or fully remote workers (36%).In other words, flexibility fuels performance, provided organizations establish clear expectations, encourage collaboration, and invest in people - not just policies.

Five Foundations of Startup Effectiveness in a Hybrid World

1. Collaboration: Align goals clearly and ensure cross-team coordination.

2. Connectivity: Foster open communication and trust between leaders and employees.

3. Innovation: Encourage experimentation, feedback, and knowledge sharing.

4. Mentorship: Provide continuous guidance, both in-person and virtually.

5. Skill Development: Invest in ongoing learning and reskilling opportunities.

Startups that anchor these five elements maintain creativity, agility, and engagement - even when teams are distributed.

Three Practical Recommendations for Founders and Leaders

1. Design a clear hybrid model. Define three consistent in-office days per week (e.g., Tuesday–Thursday) to balance rhythm and flexibility.

2. Invest in managers. Develop leadership programs and performance metrics that measure engagement, not attendance.

3. Measure culture, not just output. Track trust, collaboration, and learning as leading indicators of business growth.

Conclusion and Recommendation

Whether your startup is at the seed stage or scaling fast, the message is consistent: physical location doesn’t determine effectiveness.What matters most is leadership quality, cultural clarity, and the ability to create a sense of purpose - wherever your team works.Startups that invest in trust, flexibility, and strong managers will gain higher performance, stronger retention, and a culture built to last.

This article is part of the HR Experts Article Series - practical insights for founders, executives, and VCs on building the human side of growth.

This article is based on several McKinsey & Gallup insights - I’ve shared 2 links to one of them. Read them here and here.

We help startups build the human side of success. Curious how it could support your Business?

Let’s talk.

Sylvia&Michal

Contact us