Throughout 2023, there have been increasing calls for federal employees to return to the office. Earlier in the year, those calls were primarily from Republican members of Congress, although the Mayor of Washington D.C. also wanted federal workers to return to the office due to the impact on her city. But in the summer, prominent Democrats also began supporting the return to the office (RTO) for federal workers, prompted by the July release of a Government Accountability Office (GAO) report revealing very low occupancies in many agency office buildings.
Against this backdrop, President Biden, after previously mentioning federal RTO in his 2022 State of the Union address, is pushing again for more in-person presence at executive branch offices.
The GAO Report
The GAO report showed substantially underutilized federal buildings due to teleworking by employees. The headquarters buildings of twenty-four federal agencies were ranked in terms of utilization across a sample of weeks in the first quarter of 2023 and split into four equal groups or quartiles.
The quartiles had average utilization rates of 9%, 16%, 23% and 35%, respectively. Seventeen of the 24 federal agencies had an estimated average of 25% or less, with the highest utilization for individual agencies ranging from 39% to 49%.
GAO noted that federal agencies already had an underutilization problem before the pandemic and estimated for one headquarters that if all assigned staff entered the building at once, it would still only use 67% of building capacity. So clearly, federal employees working from home (WFH) exacerbates a longstanding problem.
Occupancy Data Comparison
While not measured the same way, the GAO report results are comparable to private sector data from Kastle Systems, showing a much higher impact of WFH in the public sector. Kastle’s ten-city average hovers around 50% in 2023, so federal utilization or occupancy is much lower, especially for the lower quartile agencies.
The federal utilization rates are lower than the lowest city tracked by Kastle, San Jose, at 40% occupancy. The highest quartile agencies are similar to Kastle’s lowest occupied day of the week of Friday (32% 10 city average, 23% for New York City, the lowest Friday out of the 10 cities).
Calls to Return to the Office
Given the low numbers, it’s not surprising that earlier calls for federal RTO are turning into a chorus. It began this January from D.C. Mayor Bowser, who lamented the impact on the city’s downtown post-pandemic revitalization efforts.
She touted statistics that the federal government comprises 25% of D.C.’s pre-pandemic jobs and 33% of office space and stated if most federal workers can’t get back to the office then D.C. would prefer the excess real estate holdings be released for redevelopment. In May, Republican Senators introduced a bill mandating executive agencies return to their pre-pandemic remote work policies and Rep. Mace on the House Committee on Oversight and Accountability suggested that federal workers who don’t show up in the office should be fired.
Citing the GAO report, former New York City mayor and prominent Democrat Michael Bloomberg complained about federal employees working from home in early August. The billionaire listed the costs of empty office space and the difficulties faced by small businesses and citizens who rely on timely and efficient government services.
Bloomberg acknowledged the strength of government labor unions and the insulation civil servants have from the labor market compared to the private sector. He called out the Biden Administration to do more by following up on the State of the Union promise. The White House responded a week later by issuing a memo directing the Cabinet agencies to “aggressively execute” RTO plans starting in the fall.
What does this growing call for federal RTO mean?
There are four main implications:
- Federal Government as an Example. With a size of about 2 million, excluding the military and postal service, the federal workforce is a large and influential part of the overall U.S. labor market. Establishing an RTO/WFH policy at the federal level would be a watershed moment post-pandemic and act as a benchmark for similar policies in state and local governments and the private sector.
- Greater Economic Activity. The RTO economy is more than just office real estate. Businesses that suffer when people WFH at high rates also include restaurants, dry cleaners, and convenience stores near those offices.
In addition, less commuting strains public transportation due to lower tolls, fares, and taxes collected that support the operation and maintenance of transportation networks. Higher rates of federal RTO will generate greater economic activity in those cities with a large proportion of federal workers, like Washington, D.C.
- Convergence of Public and Private Sectors. Given the large difference between public and private sector occupancy rates, there is a risk of creating a two-tier workforce regarding WFH policies if federal workers aren’t pushed to RTO in greater numbers.
Federal workers would get a more generous WFH allowance as part of their overall benefits, and private sector workers would have to go into the office at higher frequencies. This would be a bad look politically, so expect more convergence between the public and private sectors as time passes.
- Public Services from Public Buildings. There is also the question of whether public service should be provided from home. It is one thing to work from home as needed for bad weather, doctors' appointments, etc., but it is another to have federal employees working from home for much of the work week. Many federal employees perform public services in public buildings and many also work with sensitive information.
Regarding data security, customer service, and accountability, agencies must develop a responsible WFH/RTO policy. Federal office space should be used, consolidated or sold to prevent wasting taxpayer money. As the GAO report noted, agencies already had a great deal of underutilized space even before the pandemic.
With overall occupancy rates stalling at 50% and more time passing since the height of the pandemic in 2020 and 2021, it was only a matter of time before RTO would become a hot topic at the federal level. Federal workers are a large and influential part of the overall workforce, and are well compensated, especially in terms of benefits.
Their lack of in-office presence hurts local economies dependent upon the federal government, nowhere more so than the nation’s capital, Washington, D.C. Formalizing their telework and WFH policies will go a long way towards getting the country back to a more stable and uniform work environment post-pandemic.