Marvin, the CEO of a 4,000-employees company, is uncomfortable working alone and was looking forward to a return to the office after the pandemic. However, his company’s hiring of managers to prepare for the post-pandemic recovery revealed the trend on work arrangement preferences, showing that many prefer telework, especially younger employees.
Marvin told me he was willing to update his beliefs as he sees people as the most important resource. I found this admirable since many fail to live by that maxim, resulting in bad decisions which devastate employee morale, such as the current call to return to the office.
Employer Plans Vs. Employee Preferences
Studies (1,2,3,4,5,6,7,8) on full-time employees’ preferred work arrangements revealed that about half were willing to quit if not given their preferred work arrangements. The surveys revealed that from a quarter to a third of employees wanted full-time remote work, while over half wanted a hybrid schedule of a day or two in the office.
However, about two-thirds of employers plan for a hybrid schedule of having previously-remote employees return to the office for about half the time. That would satisfy the 60-65% of employees who want such a hybrid schedule, as well as the 15-20% seeking full-time in-person work.
It would be problematic for the 25-35% who want to remain full-time remote. Many of the latter already moved out of their previous geographical areas and structured their lives around fully-remote work forever. Unfortunately, too many employers want their employees to return full-time back to the office.
Creating Competitive Advantage in the New Normal
Many leaders prefer on a personal level to be surrounded by people when they work. However, they recognize it simply makes sense to let employees who can productively do so work from home much or all of the time.
For example, a host of large companies – ranging from insurance giant Nationwide to tech firm Facebook to financial major drug maker Novartis – decided to let many or all of their employees who can do so work from home permanently. Many more, such as Citigroup, Ford, Google, Microsoft, Siemens, Salesforce, Target, announced a switch to a permanent hybrid model of 2-4 days of remote work after the pandemic.
Of these hybrid-first companies, many permit a substantial minority – 10-30% – to work remotely full-time if their roles allow such work easily. Such roles include call center staff and others who do not need to collaborate intensively with fellow employees.
Interviews with 61 leaders at 12 companies that adopted a strategic approach of using best practices for post-pandemic future of work arrangements show that, to capitalize on their main competitive advantage, the leaders adopted a hybrid-first model with some fully-remote options. That means having most staff come in from one to three days weekly, giving full-time remote options for those employees whose roles facilitate full-time work, and allowing those who wanted to come in full-time to do so.
Leaders cited employee retention as a primary concern for the shift to hybrid-first models. Internal surveys on remote work preferences matched the large public external surveys indicating a strong desire among most employees for hybrid work. A substantial minority – in a portion of companies, a majority – wanted fully-remote work.
While internal surveys generally did not ask about job switching intent, given the low likelihood of accurate answers to such questions, top leaders knew from external surveys that many employees are considering job transitions post pandemic. Naturally, some of these employees worked for them.
Two other key factors convinced the leaders that a hybrid-first model with fully-remote options would greatly improve retention.
Firstly, internal surveys showed that many employees moved away from the corporate office location during the pandemic. Secondly, the Spring 2021 recruitment surge as companies stepped up their hiring for the post-pandemic recovery gave employees many opportunities, highlighting the need for employers to be able to offer hybrid and fully-remote options to recruit and retain the best employees from a wider talent geographic pool.
The executives recognized the widespread perception among employees of flexible schedules and substantial or full-time remote work as a major benefit, thus allowing them to get better labor at lower prices. They would also be able to reduce costs from real estate and associated office-based services and products.
In addition, the same internal surveys showed that those working from home gained more work/life balance and flexibility; they would feel stressed and constrained without at least a hybrid model.
Top leaders also wanted to protect the productivity boost experienced by remote workers. Surveys of managers and employees, along with internal company data, showed a boost in productivity of anywhere from 10 to 14% in these companies for those employees who worked remotely in the pandemic.
The leaders felt that having employees work in the office a couple of days would address some of the productivity challenges of collaborative tasks, which tend to consume more employee time. Thus, workers would focus on collaborative tasks while in the office. While at home, they would focus more on their individual tasks.
They also cited a desire to mitigate risk and prepare for future disruptors as a factor in their new policies. If staff worked from home a large chunk of their time, the company would be much more prepared to make shifts to working from home in case of any future disruptions. Of course, it requires an adaptation of risk management protocols and to ensure employees harden their home office against disruptions.
For creating competitive advantage in the new normal, forward-looking leaders need to let go of their preferences for in-office work. They need to adopt a hybrid-first model for most staff, and support full-time remote work for a minority, as the return to office best practice.
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