Vigorous debates about the efficacy of hybrid work make headlines every day.
Although 83% of workers around the globe prefer a hybrid work model, some high-profile companies like Goldman Sachs are mandating employees return to the office (RTO) full-time.
These demands have far-reaching consequences, creating employee engagement, recruitment and retention challenges. The same Conference Board study finds 71% of HR executives mandating an on-site work policy say they struggle to retain workers.
While hybrid work models clearly drive employee satisfaction — it’s the payback for organizations that is striking. 63% of high-revenue growth companies are more likely to embrace hybrid work. Conversely, nearly 70% of companies with negative or no growth do not offer hybrid options (Accenture).
Before diving back into a traditional RTO approach, consider the significant return on investment (ROI) of hybrid work.
96 of the Fortune 100 companies provide hybrid work options
Cisco, ranked number one on the Fortune 100, says it saved roughly $500 million since implementing hybrid work and cutting half its real estate footprint.
Reduced office space and associated expenses, such as utilities and maintenance, allows companies to save big and divert real estate costs into other investments.
Many companies are able to reduce office space effectively by leveraging hot desking, alternating when employees are in the office, and making in-office days more purposeful.
Kelly Jones, SVP/CPO at Cisco, says “Hybrid work is not just a philosophical shift, but the most significant shift in how we work in a generation, and allows us to rethink not only where we work but how we make work better for all.”
Companies that offer hybrid work increase productivity
Contrary to common perception, studies show that productivity increases or remains the same when people have the option to work from home.
A recent study in The National Bureau of Economic Research (Nick Bloom et al.) finds hybrid workers have similar performance and promotion results as their on-site counterparts—even though their at-home work days are shorter. When offered flexibility, employees work more efficiently per hour and take fewer breaks within their working day.
Hybrid work offers the perfect balance. When working remotely, employees can focus more on heads-down work, as they have fewer distractions. When on-site, employees can reap the benefits of productive in-person collaboration.
By planning some days in the office intentionally, 83% of companies say collaboration on new projects is as good or better than before the pandemic when everyone was on-site full-time (Statista).
Employees required to RTO full-time are twice as likely to resign (42%) as those employed in a hybrid capacity (21%)
More key findings from the Great Reshuffle survey by the American Institute of CPAs show that workplace location flexibility is a top factor employees consider when looking for a job. On the flip side, location inflexibility is on par with the top reasons they leave, such as salaries, benefits and career advancement.
Gen Z employees—who will make up a third of the workforce by 2030—are among the biggest supporters of hybrid work. Gen Z wants to experience some on-site work, with 74% preferring to interact with colleagues face-to-face (Accenture). They also value flexibility, with 44% of 2023 graduates preferring hybrid work (ZipRecruiter).
There’s no question. Companies that offer flexible work have a competitive advantage when recruiting and retaining workers. The NBER paper also finds having at least one work-from-home day reduced average attrition rates by 33%.
This reduction was larger for non-managers, women, those with longer commutes and employees with fewer than three years of tenure, demonstrating hybrid work also helps retain a diverse workforce.
“Hybrid workers are happier, more highly ranked by their managers and share more novel information with their colleagues.” (HBS)
The Harvard Business School study “Is Hybrid Work the Best of Both Worlds?” links hybrid work to higher job satisfaction, better work-life balance and better performance ratings from managers.
And while remote work allows for greater flexibility, it can also cause increased feelings of isolation and loneliness.
Sequoia’s Return to Office survey finds “building connections with their teams” and “feeling lonely sometimes” are among the top three challenges remote employees experience. 74% say that being in-office helps give them a sense of belonging.
Humans still need to socialize and connect with others through shared experiences.
“For us, a completely remote model was out of the question,” says Ross Seychell, CPO at Personio. “That’s because collaboration, whether professional or small talk around the coffee machine, helps build a sense of community and pays off for our culture. And that is foundational to our success.”
Hybrid work isn’t a luxury — it’s table stakes for a thriving business
Research shows that hybrid work works — as long as there is continuous and transparent communication between employers and employees throughout the process. Implementing a successful hybrid work strategy doesn’t happen overnight, and ensuring its full adoption and sustainability takes deliberate change management and policy-setting.
Companies that want to grow, innovate and attract future talent will embrace flexibility over immutability and transparent communication over mandates. The future of your workforce and your business depend on it.
To learn more about how leading companies are thriving with hybrid work, check out the 20 Chief People Officers Shaping Hybrid Work.
