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Hybrid work, good or bad for business?

Many of you may know that I sit on the Board of various companies from manufacturing through to technology. Since the beginning of the pandemic, each of these companies as well as many other clients we are working with have wrestled with the policy of ‘work-from-home’. The post-pandemic environment raises some interesting questions.

As the threat-level of infection and mortality has fallen, more employees are now safely returning to work.

But not necessarily every day, especially for white-collar office workers. Some employees work from home for a few days of the week.

Many companies employing office workers are still concerned about the risks of COVID-19 infection and are therefore rostering a percentage of their office workforce to work from home. A ‘hybrid working’ policy is now normative.

Companies I work with, and I’d guess many others, are concerned about the implication of a hybrid working policy on productivity levels, loyalty, team-cohesion, and longevity.

The burning questions are:

  • Should work-from-home continue post-pandemic?
  • If so, on what basis?
  • Is hybrid work good or bad for business?

Before COVID-19, employers were already offering flexible work, primarily as a means of attracting talent, displaying trust, and engendering a sense of loyalty.

Alan Felstead, author of ‘Remote Working’, said that flexible work was the ‘privilege for the favoured few’. Some analysts say that under a work-from-home model, loyalty may diminish. I’d suggest that flexible work, implemented well, can enhance employee loyalty.

But my sense is that this hybrid working phase is something different from the pre-pandemic period of flexible work.

You’ve probably read about the ‘The Great Resignation’ (1), a term coined by Anthony Klotz, an associate professor at Texas A&M University. It describes the millions of workers in the US suffering burnout.

In large numbers, employees are re-evaluating their work-life balance since the pandemic and quitting their jobs.

Some thinkers, such as Brian Kopp, chief of HR research at Gartner, sees this trend as a potential paradigm shift as more employees re-evaluate the significance of work. (One example of this shift can be seen on Reddit, where a vocal community are part of an anti-work coalition. Already 1.7 million subscribers and growing!).

It’s not only a North American phenomenon. Some Aussie employees are also opting out of the system, or at least they’re actively changing the terms of engagement to include hybrid working as a mandatory clause of their employment.

Australia’s government reported in February 2022 that 1 million workers began new roles in the three months to November 2021. The rate of job switching is almost 10% above the pre-pandemic average. Employees are in short supply, as reflected by record-breaking low unemployment figures at 4%! (2)

To put this in perspective, the last time unemployment touched 4% was in August 2008.

Whilst a low unemployment level is great for the economy, it creates its own knock-on problem – a scarcity of skills to fill available jobs. That puts pressure on businesses to find available talent, at affordable rates. The imbalance means that employees are in the driver seat when it comes to negotiating employee contracts. And what are employees specifying? More flexible/hybrid work conditions. That’s one that’s right up there on the wish/demand list.

Unquestionably one valuable ‘benefit’ of the pandemic is that companies have finally come to recognise the importance of work-life balance and the need to support employee mental health and wellbeing.

When you don’t need to commute to and from work (which sometimes takes hours) and you can simply log-in from home in less than a minute, it’s less stressful.

In that sense hybrid working would contribute towards improved mental health and wellbeing.

Of course, there’s the counter argument, namely that attending an office is helpful for your mental wellbeing.

Working collaboratively with colleagues, being part of a team, having real face-to-face exchanges, and the opportunity for authentic connection and acknowledgment, are all positive aspects of working in an office.

Furthermore, working from home can be distracting and challenging – young children, pets, and temptations like sleep, Netflix, or just chilling instead of working.

There are several arguments for and against, as Emma Jacobs writing in the AFR articulates (3).

Father working from home on laptop and two children are putting sticky notes on him, disturbing his work
Image: Working from home can be challenging!

In conclusion we see this new phenomenon playing itself out in the months and years ahead.

There are four main pillars in play, and each is feeding into this paradigm shift. We don’t see us going back to the pre-pandemic situation.

  1. The first pillar relates to a general trend, fuelled by the pandemic, that already appeared a few years ago, before the start of COVID-19. There is now the widespread adoption of online meetings. Flexible, remote and hybrid work has become part of the employment landscape and is likely to stay. Employers as well as employees are benefiting from this.
  2. The second pillar relates to Australia’s tightening labour market. Our unemployment rate fell to the lowest level seen in more than 13 years hitting 4% in March 2022. The demand/supply relationship has skewed in favour of employees who are demanding more flexible/hybrid work arrangements.
  3. The third pillar is the current HR legislation. The employment lawyers have been silent on the details surrounding work-from-home, including the risks associated with working for a company but in the employee’s own home. How this plays out will be fascinating.
  4. The final pillar is sociological. The recent entry of Gen Y and the prevalence of Gen X taking over from baby boomers in the workforce is also having an impact on the nature of work contracts. Many in this demographic cohort are choosing work that gives them more flexibility and meaning. Ask any twenty something worker what they want, and they’ll tell you.It will be interesting to see how these overlapping pillars play out as the pandemic ends, and we enter a ‘new normal’ period.Stay safe.

Read about:

  1. The Great ResignationOne in five Aussies quit their jobs last year
    Shocking figures have revealed millions of Aussies changed jobs last year and with The Great Resignation looming there’s more pain to come for employers.
    Sarah Sharples,
  2. Australian Unemployment Rate falls to record low
    Australian Bureau of Statistics,unemployment%20rate%20remained%20at%204.0%25.,172%2C000%20lower%20than%20March%202020
  3. Employers beware: hybrid work weakens loyalty”
    As hybrid working becomes the norm, employer loyalty may diminish. If workers spend less time together, their social ties will weaken, as will their attachment to an employer.
    Emma Jacobs, Financial Review

Employers beware: hybrid work weakens loyalty

8th February 2022

As hybrid working becomes the norm, employer loyalty may diminish. If workers spend less time together, their social ties will weaken, as will their attachment to an employer

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