Expert comment

Hybrid working: what does it mean for the future of work?

There has been much debate about when and how we may return to the office or whether hybrid working will become the norm. What is the future of the workplace?

It is always interesting how crises shape group thinking on issues, none more so than the future of work. The pandemic has led to a large-scale social experiment in flexible working, namely working from home.

For many organisations this has generated much debate on what it means for working arrangements post pandemic – are we in a new context where partly working from home and partly in the office is the ‘new normal’ or will there be a return to the usual workplace?

 

It looks like employers and employees’ expectations on hybrid working are out of kilter, perhaps more so in some sectors than others.

Certainly, investment banks such as Goldman Sachs and JP Morgan believe work is best done in the office (or client’s office) and their CEOs have demanded staff return. A recent survey by Accenture found over 80% of financial services leaders want their people back in the office. At the same time, the Labour Force Survey in the UK found that 88% of employees who worked at home during the pandemic want to continue this in some form.

It looks like employers and employees’ expectations on hybrid working are out of kilter, perhaps more so in some sectors than others.

Who benefits most from homeworking?

Many ‘frontline workers’ never had the opportunity to work from home during the pandemic and the idea of hybrid working is really only something that might extend to certain types of workers. But which ones?

Evidence in the UK from the latest Labour Force Survey and Business Insights Survey is that opportunities for homeworking were experienced most strongly by the highest paid, the better qualified, the higher skilled and those living in London and the South-East. Hybrid working might be seen as a rich person’s problem and the opportunity to so do further underlines inequalities in the labour market.

What flexible working model to adopt?

Homeworking as a mode of flexible working has been hovering around 4.5% of the working population for several years having risen from 1.7% in 1981. The pandemic saw this rocket to 43% in April 2020 and once lock-down was eased in June 2020 fell to 36%[i].

The question on everyone’s minds is whether a hybrid either of 3 days in the office 2 days at home or 2 days in the office and 3 days at home, is going to pan out where they work.

Clearly, the views of senior leadership are critical, as Goldman and JP Morgan illustrate but beneath their assertions are also some important assumptions about value creation in their businesses.

In JP Morgan’s case the argument is that collaboration, innovation and intriguingly the ‘apprenticeship’ model of investment banking will be damaged if more work from home. In complex, team-based work with long hours and an up or out career system, being visible, always on call and learning from seniors are seen as critical.

This model of employee control has become heavily institutionalised and there is fear that changing it might undermine the business model. Indeed, these financial services companies, like silicon valley firms have designed employee systems that make the office more like home than home itself – gyms, free meals, concierge services, health and well-being services (massages, yoga, mindfulness..). This ‘new paternalism’ makes sure employees never have to be distracted from work by the demands of home life.

The pandemic risks questioning this model and some employees having reconnected with real home life during this period may be having second thoughts about their working hours and location.

How working from home changed the working day

A study of 3.1m workers in the EU and the USA found that those working at home were attending more meetings (12.9% more) and more people were at these meetings (up by 13.5%). On the upside, these meetings were shorter than usual and overall, even after lockdown people were spending less time in meetings per day (down 11.5%)[ii]. However, the working day is getting longer for these workers – up just under 50 mins a day with more email activity an important factor.

What’s the impact of working from home?

If we want to understand the impact of homeworking, we really need to take a longer-term view and draw on studies that have followed these workers over several years. In an analysis over 2011-20, researchers found that homeworkers were 50% less likely to get promoted, 38% less likely to get a bonus and work more unpaid overtime (6 hours compared to 3.6hrs for those on the office[iii]).

So, perhaps Jamie Dimon is right – if you want to survive in the likes of JP Morgan being less visible at home is a career killer.

The productivity and health data show us something else. People working from home, outside of a pandemic are generally more productive  - up to a day a month according to research by Nick Bloom at Stanford. However, the pandemic is likely to have a negative impact on productivity as many people are not set-up for homeworking nor do they have choice over time in office or time at home, which may lead to feelings of isolation and potential depression.

Does hybrid working have a future?

Survey of employees would suggest yes. These tend to show that around 88% of employees value some form of homeworking and over 50% want to retain it post-pandemic. Surveys of employers are also showing some enthusiasm, and many are eyeing up the potential cost savings from reduced office space, higher potential productivity and lower levels of sickness absence.

Factors to consider with hybrid working

Getting hybrid working right is going to be a challenge. Which 50% of the workforce should you be designing for and what do you do with the other 50%? Do you enforce a one size fits all model – 3+2 or 2+3 or do you design individual deals with people that meet their needs at different stages of their lives? What are your responsibilities for staff working from home in terms of equipment, health and safety, careers and development? How do you make sure there is no discrimination or unconscious bias?

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What other flexible working options are there?

I said at the outset that groupthink tends to operate at times like these. The conversation is all about hybrid or not. What employers need to realise is that they have many more clubs in their bag.

Hybrid working is just one form of flexible working. There are many more available which can allow employers and employees to meet mutually beneficial objectives.  

For example:

  • Term-time working for parents with young children

  • Job sharing for those who have other caring needs, demands or interests

  • Shorter working hours overall for those who want to blend work with voluntary, educational or other activities, such as a prelude to retirement

  • Flexible start and finish times to reduce commuting times or fit around caring needs

There is more to the future of work than deciding on the hybrid format. Flexible working is a broad category and there are many options. Employees may want to move across different types across the life-span but the main point is that they should not be disadvantaged in doing so.

This is going to be the biggest challenge in designing work for the future. Perhaps the most important aspect of the pandemic is that it has reduced the stigma associated with homeworking and this may have spill over effects into flexible working modes more generally. The challenge, if employers are prepared and able to accept it, is to develop their capabilities to design work for the post-pandemic future.

...some employees having reconnected with real homelife during this period may be having second thoughts about their working hours and location.

What can change leaders do?

There are several issues here. Firstly, each organisation needs to understand its value creation model and the role of work design. For example, if value is created through complex team-work processes where tacit knowledge and cooperative behaviours are critical you need to understand what activities require co-location and which can be undertaken remotely.

This might be quite easy in contexts such as scientific laboratories where the equipment and artefacts critical for work processes are in situ. However, even here certain stages of lab work can be done remotely (data analysis, for example). In other contexts, the advantages of IT platforms, collaborative working spaces and new modes of computer supported work can be explored. Most organisations and employees only use a small fraction of IT capability, and the pandemic has forced many to wake up to its potential. Of course, this means investment in skills training which many organisations may neglect.

What is the most critical consideration for hybrid working?

The most critical aspect of work design for hybrid contexts is to understand the needs of your workforce. Surveys are showing that up to 45% of employees are considering moving to another organisation which supports more flexible working. In a tightening labour market, flexible working is going to be a competitive edge. This may be something that JP Morgan has not factored into its return-to-work policy. So, change leaders need to have an open dialogue with employees on preferred modes of working. This could be part of a review process or a component in a HR self-service model.

Employers also need to take account of personality and neurodiversity issues. Homeworking is not for everyone and forcing some people to adopt standardised models (3+2 for example) may create more problems for some but advantages for others. Research is showing that those workers with neurodiversity have been benefiting immensely from homeworking as they find the office context stressful.

Another theme is an adequate homeworking environment. A recent survey by Microsoft on Work Trends[iv] found that 46% have insufficient work equipment and 10% a poor internet connection. Moreover, nearly half said their employers didn’t help them with the expenses of homeworking. A longer-term issue is the employers duty of care in terms of musco-skeletal problems and mental health issues. As the boundary between office and home becomes more porous this will raise lots of challenges.

We may be seeing the rise of a ‘new paternalism’ as employers begin to understand more about the relationship between home demands and work demands. This can be both an opportunity to redesign work and ‘building back better’ but it can also raise issues about the reach of corporate power into people’s home lives. However, in a tightening labour market employees may have the final word.
 

[i] Felstead, A., & Reuschke, D. (2020). Homeworking in the UK: before and during the 2020 lockdown.

[ii] DeFilippis, E., Impink, S. M., Singell, M., Polzer, J. T., & Sadun, R. (2020). Collaborating during coronavirus: The impact of COVID-19 on the nature of work (No. w27612). National Bureau of Economic Research.

[iii] Felstead, A., & Reuschke, D. (2020). Homeworking in the UK: before and during the 2020 lockdown.

[iv] See Microsoft WorkLab:  https://www.microsoft.com/en-us/worklab/