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Build back better: What are the keys to successful hybrid work?

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Build back better: What are the keys to successful hybrid work?

We are a year and a half into an experiment with remote work – a forced experiment for many that has challenged assumptions, delivered benefits and changed habits. Many organisations assume that some remote work is here to stay, with the immediate future of work being hybrid, blending time in the office with time working from other locations, such as home.

Recently Nous Group brought together business and people and culture leaders from across sectors to discuss how their organisations are approaching hybrid working. The event (virtual, of course) was the second in our Build Back Better series, which looks at how organisations are developing new ways of working that bank the benefits of the forced experimentation of 2020 and 2021. You can read about the first event in the series here.

To allow people to speak frankly about their experiences, we conducted the event under Chatham House rules. We are pleased to share the ideas that emerged.

Hybrid can work for both employers and employees

What have we learned so far?

First, employers see they can benefit from hybrid working.

Compiling their own data, many organisations have found that remote work can be as productive as working from the office – sometimes even more so. Some 94 per cent of employers told a 2020 Mercer survey their company productivity was the same or higher than before people were working remotely.[1] Many people for whom a large part of their day is spent on focused work say they have never been so productive.

Stanford economist Nicholas Bloom found that remote work can be 13 per cent more productive than office-based work – in the right conditions, which include a suitable workspace at home, some office time each week and not needing to supervise remote schooling.[2] By that analysis, we have not yet realised the full potential benefits of remote working. Many employers are also wondering how hybrid work might reduce the cost of their physical spaces, for example through a reduced footprint.

Second, employees expect and value hybrid working.

Some 62 per cent of Australians expect to transition to a ‘hybrid’ work environment.[3] And staff are voting with their feet; before the latest wave of lockdowns, the Property Council of Australia found that the main barrier to a return to full occupancy of office was worker preference.[4] A financial services client that Nous works with surveyed its staff and found a preference for hybrid working for people in all locations, even those that had not experienced significant lockdowns, suggesting that hybrid work is not just a post-lockdown preference. Not only is hybrid work an employee preference, Professor Bloom found that for UK employees, the benefit of hybrid working part was valued at the equivalent of 6 per cent of their wages.[5]

Third, doing nothing means falling behind.

Many organisations are active on this issue. Some are making public statements about their intention in order to strengthen their brand and their employee value proposition, because they recognise the appeal to current and potential employees. Many are moving toward a 3-2 workplace: three days in the office and two days at home or elsewhere. A recent global study found that Australian workers are the most likely to change jobs if their work returns to fully on-site.[6] And 84 per cent of companies in one Nine media survey have permanently adopted hybrid working policies for office-based employees.[7] So clearly there are talent and cost implications of not taking actions on hybrid work.

There can be a dark side to hybrid working

There can be a dark side to hybrid working – unintended consequences for individuals, organisations and even society – that should inform our thinking as we chart the way forward.

Hybrid working can have a dark side

For the individual, there may be wellbeing risks. Adam Grant recently wrote in the New York Times about “languishing”, a joyless, aimless, stagnation.[8] When a person is languishing, they are not at full capacity. This has implications for productivity: people have trouble concentrating, dulled motivation and tripled odds that they will cut back on work. Languishing is also a risk factor for mental health problems. So, a People and Culture team might ask: How confident are we that we know where our people are at? How well equipped are we to act on wellbeing?

In addition, there are constraints on personal growth. Remote work can reduce the opportunities for learning because a home office is typically just not as stimulating an environment as the workplace. Furthermore, recent Yale research suggests that our personal and professional networks have shrunk by around 16 per cent during COVID.[9] During the pandemic we are not replacing the relationships we are losing with the efficiency that we previously did. The problems with shrinking networks are that they can hinder career progress, make it harder to get promoted, and detract from sources of happiness at work, including our sense of belonging.

For the organisation, there are challenges maintaining culture. Most people report feeling as connected to their organisation as ever through 2020, which may be surprising until you consider that most companies paused hiring during the pandemic. Most employees are not recent hires, which means most employees are already familiar with their organisations. In a sense, companies have been coasting on a culture forged over years, so as hiring picks up, it remains to be seen how workplace cultures will be maintained and developed.

And then there are the limits on collaboration delivering a lack of future innovation. Stanford’s Professor Bloom found that coming together is important to fuel innovation. Maybe we can survive without that in the near term, but are we borrowing from our future if we continue to heavily restrict the opportunities for collaborating in the rich ways possible when we are in the same place?

As for the societal dark side of hybrid working, many organisations are discovering the potential equity challenges. Age and gender influences preference for work location – there’s evidence older men prefer working from the office while younger women prefer working remotely. If individual preferences drive hybrid arrangements, how will that play out in terms of visibility at work and career progression?

A less explored dark side may emerge from arrangements like the Team Anywhere approach announcement by Atlassian.[10] While this can offer huge benefits for some, there may be pitfalls, as shown in the debate about location-based pay, in which organisations may explore following Google’s lead of cutting wages for employees living in lower-cost locations.[11] In the future, if people can work from almost anywhere, does it mean that candidates will have to be the best and the cheapest to get the job? What would that mean for a business’ social license to operate, where increasing numbers of roles are performed offshore?

Mapping progress on the Hybrid Work Maturity Model can help you focus

While most organisations are actively thinking about how they can make hybrid work best, most accept that they are early in the journey.

To give greater structure to our understanding of how organisations are adapting to hybrid work, Nous Group has constructed the Nous Hybrid Work Maturity Model:

Like hybrid work itself, this is a work in progress.

A poll of participants in our recent conversation showed that, overwhelmingly, people rate their organisations as being at level 2 maturity. Many are working toward level 3, with a focus on defining an organisational approach to hybrid work and manager capability and practices to enable that approach.

Hybrid work innovations come from many sectors

Our Build Back Better seminar heard from people in many sectors about what was happening in their organisations. Here’s what we heard:

  • A major insurer is elevating hybrid working to a strategic level, rather than having it delegated to People and Culture alone. This involved showing how it contributed to a relevant, sustainable and high-performing organisation. To gain funding for a program of work, the People and Culture leader articulated a program logic as well as governance, resources and funding requirements.
  • A hospital recognised different workforces had very different expectations and possibilities for remote work, due to the nature of their role. Leaders across the hospital came together to address this shared challenge and agree on some consistent principles to guide new working arrangements.
  • A bank is including hybrid work in its ambitious positioning for the future workforce and capability that will enable the bank’s strategy. The work has been endorsed by the board.
  • A university found that after a rapid shift to online teaching at the start of the pandemic, it was encouraging staff and students to return to campus when health conditions allowed through attractions such as live music and food, as well as formal work expectations.
  • A not-for-profit organisation is recognising that when people are in the office it is important to be intentional about using the time for in-person meetings and activities that contribute to the culture of the organisation.

Sharing ideas helps us all get better

The upshot of our discussion is that the future of work is evolving, and solutions will emerge through trial and error, guided by a clear ambition to reflect this movement.

Sharing ideas and offering support among professionals dealing with similar challenges was illuminating. We were lucky to have so many people be so forthcoming with their experiences. We thank them all for their openness.

Get in touch to discuss how we can support your organisation to develop hybrid working arrangements. We also look forward to hearing from other professionals keen to join future Nous forums.

Prepared with input from Aidan Jago.

Connect with Penelope Cottrill on LinkedIn.

Published on 16 September 2021.

 

[1] Mercer, “Flexing for the Future”, August 2020

[2] Nicholas Bloom, James Liang, John Roberts and Zhichun Jenny Ying, Quarterly Journal of Economics, “Does working from home work? Evidence from a Chinese experiment”, 20 November 2014

[3] McCrindle, “Australians post COVID-19: understanding how COVID-19 has shaped out society”, October 2020

[4] Property Council of Australia, “Data reveals progress towards CBD reactivation”, May 2021

[5] Shivani Taneja, Paul Mizen and Nicholas Bloom, Vox EU, “Working from home is revolutionising the UK labour market”, 15 March 2021

[6] Andrea Alexander, Aaron De Smet, Meredith Langstaff and Dan Ravid, McKinsey, “What employees are saying about the future of remote work”, 1 April 2021

[7] Emma Koehn and Jessica Irvine, Sydney Morning Herald, “The five-day office week is dead, long live the hybrid model, says productivity boss”, 12 July 2021

[8] Adam Grant, New York Times, “Feeling Blah During the Pandemic? It’s Called Languishing”, 19 April 2021

[9] Marissa King and Balász Kovács, Harvard Business Review, “Research: We’re Losing Touch with Our Networks”, 12 February 2021

[10] Atlassian, “Our distributed workforce”

[11] Stephen Miller, SHRM, “Google's Salary Cuts for Remote Workers Renew Location-Based Pay Debate”, 18 August 2021