Abstract: Return-to-office (RTO) mandates have emerged as a dominant organizational response to perceived productivity and culture challenges in post-pandemic work environments. However, mounting evidence suggests that mandatory in-office attendance policies generate substantial hidden costs that undermine the very outcomes leaders seek to achieve. This article synthesizes research on talent attrition, employee engagement, and competitive positioning to demonstrate that RTO mandates often function as blunt instruments that erode organizational capability rather than build it. Drawing on behavioral economics, organizational psychology, and strategic human capital research, we examine how policy enforcement approaches trigger psychological contract violations, selection effects that disproportionately lose high performers, and strategic vulnerabilities in talent-competitive markets. Evidence from organizations across financial services, technology, and professional services sectors reveals that companies defaulting to attendance-based mandates experience measurable losses in retention, engagement, innovation capacity, and employer brand strength. The analysis concludes by identifying evidence-based organizational responses that address legitimate coordination and culture concerns without incurring the costs associated with mandate-driven approaches, emphasizing outcome measurement, leadership capability development, and employee autonomy as critical alternatives to policy enforcement.