When videoconferencing specialist Zoom called staff back to the office last month, it was widely interpreted as the disintegration of the remote work experiment. The pro-office message, four years after the pandemic triggered a white-collar retreat, was seized on by Elon Musk, who described it as morally wrong for “laptop classes living in la-la-land” to work from home. Amazon is tracking attendance and emails staff who fail to attend three days a week, while Google says absence will affect staff performance reviews. In the UK, banks including Lloyds Banking Group, Citi and HSBC, have taken the September cue to tighten their in-office mandates.
But even as some employers take a more aggressive approach to forcing staff back to the office, the latest data shows the picture on working patterns is more nuanced. Even after its clampdown, Zoom only requires two days in the office, while most other companies with office staff expect to retain a component of remote working.
“What doesn’t get the headlines is that there’s a bigger percentage of companies moving from full time in the office to much more flexibility,” says Brian Elliott, co-founder of Future Forum, a consortium on the future of work launched in 2020.
As the northern hemisphere shifts out of summer holiday season — traditionally the point at which companies have sought to tighten their return-to-office policies — tensions with staff are far from resolved. But the debate over working patterns is entering a new phase, as companies examine how to enhance the productivity and performance of hybrid policies — rather than viewing them simply as a staff perk. New clues are emerging about how employers can manage hybrid work, including democratising decisions and increasing leadership training.
Finding the middle ground
In the US, 33 per cent of companies are fully flexible — meaning employees work entirely remotely or are given free choice over when they go to the office, according to the Flex Index, which collects data on work policies from 6,500 companies. The proportion of US companies requiring full-time office attendance dropped from 49 per cent in January to 39 per cent in July. Meanwhile the “Goldilocks” hybrid model, which demands a minimum number of days in the office, had been adopted by 28 per cent of companies by July, up from 20 per cent at the start of this year.
On average US companies stipulate 2.56 days in the office per week, according to the new Flex Index report, halfway between what employers hope for (2.75 days), and the 2.21 days employees would like.
“This two to three days a week [in the office], I think of as a truce,” says Rob Sadow of Scoop, which supplies hybrid work technology and oversees the Flex Index. “Employers may not get exactly what they want; employees may not get exactly what they want.”
Globally, the Leesman Index, which measures employee engagement, reports that about a third of companies have mandated office time, while almost half are letting employees choose, with the bulk selecting Friday as the day they are most likely to work remotely.
Give staff a say
Who decides companies’ policies on working locations helps to determine how well they are received. Mandatory policies are popular with employers in part because they are simple to impose — but staff prefer it when they have a say in the decision. Syreeta Brown, group chief people and communications officer at UK retail lender Virgin Money, says the group conducted a lot of research at all levels, before deciding most employees could work anywhere in the UK. The pattern, though, was set in consultation with the manager and team. “It’s a lot of work. That’s why companies find this stuff challenging.”
According to a Boston Consulting Group survey of 1,500 mainly US and European office workers in spring 2023, almost two-thirds (62 per cent) had no say in their company’s policy. Employees were least satisfied when their work pattern was set from the top of the company; when their direct manager dictated the policy, the proportion of unhappy respondents fell, and decreased again if the team decided.
Payments company Mastercard, which had a five-day in-office norm before the pandemic, asks for a minimum of two days in the office. It allows teams to decide when and why to work remotely or in the office, encouraging them to meet for “moments that matter”, says Michael Fraccaro, chief people officer.
Some employers require far fewer get-togethers. Sydney-based Atlassian allows staff to decide where to work and only recommends that teams hold in-person “gatherings” once a quarter. Annie Dean, head of “Team Anywhere” for the software group, says monthly employee surveys show such events, which might last a week, are enough to reinforce the sense of connection between team members by nearly 30 per cent. The effect lasts four or five months, she says, and the bonds are stronger than between team members permanently located together in offices.
Tasks, not days
Differences in working styles between executives and employees partly explain the mismatch in expectations for in-office work.
BCG says managers spend nearly half their time on tasks requiring them to meet in-person (such as giving feedback or inducting new recruits), compared with their staff, who spend longer on “focus work”, such as writing reports, which is better suited to remote.
JPMorgan Chase’s chief executive Jamie Dimon, a self-confessed sceptic about homeworking, recently told The Economist he believed the remote model was less effective for management teams and younger staff, adding that decisions would not be made by “pandering to employees”. He added: “It’s got to work for the company and more importantly the clients.”
Some employers are moving beyond blunt policies dictating days in the office to aligning tasks and locations. Virgin Money’s Brown says this requires planning. “You sit down with your manager and your team and say, ‘what do we need to do for the next quarter? What’s our rhythm?’” Teams from finance, investor relations and communications work on quarterly results, for example. Typically, in the few days prior to the results’ publication the teams would work together in the same location.
Work patterns may also be organised by experience. RSM, the accounting firm, expects junior workers to be in more than senior staff. John Taylor, the company’s UK chief operating officer, says the firm explains to “young people it’s not about presenteeism, but it’s about investing in their career”.
But BCG’s Debbie Lovich says most executives are just monitoring “‘butts in seats’ and [entry] card swipes, instead of managing towards joy and productivity”.
Lloyds’ chief executive Charlie Nunn told staff in July that the bank “can only [be competitive] if we collaborate effectively . . . which is difficult, if a team [is] below strength on certain days of the week.”
But whether hybrid work is more productive than fully remote or fully in-office workforces remains inconclusive.
A working paper published in July by academics Jose Maria Barrero, Nick Bloom and Steven Davis, suggests fully remote working reduced productivity by 10 to 20 per cent, compared with full-time office working, due to obstacles such as communication challenges and home distractions.
While the paper suggests productivity of hybrid workers was only flat or slightly higher than that of office workers, the academics believe a hybrid model is attractive because it reduces recruitment and retention costs. Stanford university’s Bloom has estimated that the offer of flexible work is equivalent to about an 8 per cent pay increase, based on surveys of workers, who seem to value the greater freedom and the reduced cost of, for example, commuting less frequently.
Mr Cooper, a US mortgage servicing company, has moved to a flexible model, built around a framework, avoiding a top-down mandate and allowing teams to set working norms. Most employees carry out day-to-day work from home. “[Staff] turnover last year was about 25 per cent. This year it’s at about 16 per cent. I do attribute it to the flexible working arrangements,” says Kelly Ann Doherty, the group’s chief administrative officer.
Management and feedback
The shift in working habits is already showing up in data on office usage, which will ultimately dictate property decisions when long leases come to an end. A study of a sample of organisations, by workplace consultancy AWA, found average office attendance had increased to 35 per cent worldwide, up from 26 per cent in July last year. Desk use increased more sharply, from 33 per cent to 48 per cent, reflecting a reduction in office space available as businesses consolidate their real estate.
But many companies are starting to realise that successful flexible working is not the outcome of a simple calculation about office space and time spent in it. It also requires training leaders to run hybrid and distributed teams.
“We’ve doubled down on manager training,” says Mastercard’s Fraccaro. “The big success factor in this is investing in people.”
Mr Cooper’s Doherty says the company concentrated on areas such as coaching and how to provide effective feedback. “When you’re in-person in the office, a leader can do a drive-by and think they’ve checked that box,” she says. “When you’re hybrid, you have to be intentional.”
“Organisational leaders are hoping that the office will solve their managerial issues,” says Despina Katsikakis, president of the British Council for Offices. “You need to start with the why — what are the behaviours we want to engender? Sadly we often start with ‘My space is underutilised so we need 20 per cent less space’. Maybe you want to understand why it’s underutilised.”