Workers’ Absorbed RTO Costs ‘Can Feel Like a Pay Cut’

For many U.S. workers, returning to the office (RTO) has created a noticeable financial burden — as well as a rift between them and their employers — as absorbed costs can feel like an unnegotiated pay cut. This is according to a report released Oct. 14 by consulting firm Korn Ferry.

The consulting firm’s research found workers who are required to work in the office at least four days per week now spend an average of more than $6,700 annually just to commute and maintain their office presence. Costs include transportation, meals and upgrading an office-appropriate wardrobe. For working parents, the study showed additional childcare expenses push RTO’s annual price tag to more than $16,500.

While these expenses aren’t exactly new, their impact has fundamentally shifted.

“What’s changed is that many of these costs are materially higher today and come after employees have experienced a different way of working,” said Roger Philby, Korn Ferry’s global leader for its People Strategy and Performance practice.

Or as Korn Ferry senior client partner Tom McMullen (a WorldatWork Compensation Immersion Program faculty member) put it: “RTO can feel like a pay cut not agreed to.”

Tolerance Isn’t the Same as Acceptance

Despite the growing financial strain, workers find themselves with limited leverage to respond and push back. A cooling job market with lower hiring rates means workers have fewer opportunities to leave their current employer for a competitor. In addition, anxiety surrounding artificial intelligence (AI) implementation (and related job displacements) has left many workers hesitant to demand bonuses or salary adjustments to offset RTO costs.

A recent Workspan Daily article reported two-thirds of workers cited job security as the primary reason they won’t ask for a raise this year. Even for those who do ask, the outlook remains cloudy at best. Pay data from Korn Ferry and other outlets shows median salary increases hovered at around 3% this year — a drop from previous years — with projections holding at that level or lower heading into 2027.

Faced with rising expenses and stagnant compensation, Korn Ferry senior client partner Dominic Cottone said many workers have adopted a resigned “it is what it is” attitude.

“Most people tolerate it because spending more to go back to the office is better than being out of work,” he said.

That’s quite a shift from a few years ago, when employers began pushing RTO initiatives following workplace changes introduced during the COVID-19 pandemic. At that time, surveys showed most workers would rather leave their jobs than return to the office.

Response and Communication

Still, Korn Ferry experts recommended that leaders take note of workers’ financial concerns tied to workplace attendance. They suggested employers help reduce RTO-related cost pressures through:

Benefits like flexible spending accounts;
Flexible scheduling (e.g., allowing workers to choose a day during the workweek to work from home); and,
Incentives such as merit increases.

Philby added corporate leaders need to do a better job of communicating the business benefits of in-person work.

“If leaders believe that being together improves collaboration, innovation, apprenticeship, culture or client outcomes, they should articulate that, and measure the results,” he said.

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