Much like farm families had to deal with sons returning from World War I, companies worldwide are struggling with the Covid-19 impact on the workforce and workplace. Work was necessarily transferred from the office to the home, accelerating a trend that appeared in the 1970s with “telecommuting.” Despite rosy projections that telecommuting would be the new normal within ten to twenty years, growth in the number of people working at home was erratic. From 2006-2015, more than three-quarters of American workers in all occupations worked solely in a central location. When asked why remote work had not grown as rapidly as projected, Jack Nilles, the engineer who coined the term “telecommuting,” replied, “The greatest barriers to the growth of telecommuting have always been between the ears of managers rather than for any technological issues.”

The pandemic took the question of remote work out of companies’ control, the only options being an at-home workforce or closing the doors. Before the outbreak in March 2020, approximately one in five employees did some work at home; by December of that year, over 70% worked, generally full time, from home. Unsurprisingly, most workers enjoyed the experience and want to continue an arrangement that allows for significant at-home work.

Fujitsu Japan Experience

Before Covid-19, most of the multinational firm’s Japanese employees worked in central offices since managers preferred face-to-face interaction and long office hours. According to an internal survey, three-quarters of workers considered the office to be “the best place to work,” according to an internal survey. In March 2020, some 80,000 were working from home. By May, opinions had wholly reversed. Only 15% of employees still favored the office as the best place, 30% believed that their homes were best, and 55% thought a hybrid arrangement (home and office) was best.

Fujitsu listened to the employees and subsequently introduced a “Work Life Shift” that features remote work and flexible hours for all Japanese employees. The company expects to reduce its office space in Japan by half by the end of 2020. In addition to real estate savings, the company anticipates that productivity will also increase. Fujitsu’s strategy is likely to repeat worldwide.

Our best estimate is that 25-30% of the workforce will be working from home multiple days a week by the end of 2021

Kate Lister, president of Global Workplace Analytics

The Hybrid Working Environment

The sudden shift from office to homework ignited a boom in communications technologies with the appearance and innovations of such products as Zoom, Slack, and Confluence. At the same time, limitations and deficiencies arose, including collaboration, lowered employee engagement, and security problems. According to a 2020 study by The Martec Group, job satisfaction, motivation, and mental health declined significantly for remote workers across multiple industries, demographics, and seniority levels during the pandemic.

Some consider a hybrid working environment a necessary either/or compromise between all work in a central office or remotely. Advocates of a central workspace view a hybrid workplace as a temporary accommodation required to satisfy valuable employees and maintain a competitive recruiting position short-term before reestablishing the office as the primary workplace. For example, David Solomon, CEO of Goldman Sachs, confirmed that “It’s an aberration we are going to correct as soon as possible.”

Others view the arrangement as a phase in the transition to a work-from-anywhere (WFA) arrangement where all employees work remotely, i.e., living anywhere that can be technically supported, with limited office space and minimal face-to-face interaction. Twitter, Facebook, and Shopify have announced plans to transition to a remote WFA workforce. Currently, most organizations continue with a “wait-and-see” attitude, aware that a significant workplace transition is likely but unsure of its scope or persistence. A permanent compromise – the hybrid working environment – is the most likely outcome with organizations supporting in-office and remote workers. 

Professor Lynda Gratton of the London Business School suggests that the balance between a centralized and a remote workforce depends on the nature of work and its requirements. For example, most businesses before Covid functioned under place (central or remote locations) and time constraints (working at the same time-synchronous or at different times – asynchronous). Employees worked together at a single site (traditional office) during defined hours (9:00 AM to 5:00 PM, Mondays through Fridays). Advances in technology have moderated the need for central locations while the nature of the work determines whether employees need to work simultaneously.

Hybrid Work Environment Considerations

Much of a corporation’s activities can be accomplished remotely. Nevertheless, some functions require or benefit from varying degrees of face-to-face contact and physical collaboration. At the same time, research studies consistently find that employees generally prefer more flexible schedules and work locations. A McKinsey & Company survey found that almost 30% of employees were likely to switch jobs if their employer returned to entirely on-site work.

Despite economist Milton Friedman’s claim that businesses’ sole purpose is to generate profits for shareholders, most corporate leaders agree that their primary purpose is to serve “all stakeholders,” i.e., customers, employees, suppliers, communities, and shareholders. An employee’s preference for a hybrid working environment is not usually sufficient justification for making a change. Before a decision, executives need to consider the impact of a hybrid working environment on

• Productivity. Some managers worry about productivity losses from a remote work environment. A McKinsey study found that the nature of the job and technological access were the dominant factors in remote work productivity. One two-year study of more than 800,000 employees at Fortune 500 companies during 2019-2020 found that most reported stable or increased productivity levels when employees started working from home. Potential drivers of the increase are less employee commute time and less break time.
• Costs. The primary savings stem from the reduced cost of physical facilities required to house a full-time workforce and vary by the square footage of space before and after the transition, number and locations of work sites, lease agreements, and compensation, if any, to remote workers for the use of their homes. Business travel may also decrease. Costs may rise from upgrades and additions to the software, hardware, and transmission costs.
• Creativity. In an environment of constant change, creativity and innovation are critical to maintaining competitive parity or advantage. Research on the impact of remote work on these attributes is mixed. Around 40% of remote workers and their managers feel that the lack of face time, spontaneity, and physical isolation diminished creativity. Combining on-site and remote work – the hybrid arrangement – with adequate communication and collaboration tools can alleviate the defects of a dispersed work environment but requires careful management to succeed.
• Information Security. The relative weakness of most home internet connections coupled with a dramatic increase in the number of cyber-attacks requires most companies with a remote workforce to upgrade security systems. Regardless of entry point, a successful cyberattack can cause irreparable damage and accusations of negligence for failure to protect customer confidentiality. A remote, connected workforce imposes new and unique responsibilities on a company’s IT team.
• Culture. Culture – who we are and how we do things – is incredibly important to a company’s success. Culture is the distillation of group values, behaviors, and assumptions over time. Unless explicitly managed, a remote work environment can isolate and disengage employees, reduce productivity, and increase turnover, leading to dissatisfied customers, lower revenues, and financial losses.
• Employee Expectations. Many employees are increasingly anxious due to the lack of information from their employers about future worksite plans. Many companies have announced intentions to move to a hybrid working environment but have not provided details. Questions range from the cost of technology, the effects on compensation, and employee transition expenses. Failure to manage expectations is likely to have negative consequences.

• Management Complications. Hybrid working environments change the traditional power structure within organizations. Managers co-located with their reports have more information about what and how employees are feeling. Employees in a centralized workplace have greater visibility and, typically, more access to company assets than remote workers. The circumstances often produce claims of discrimination, favoring one set of employees versus the other. Managing a hybrid workforce requires monitoring, understanding, and action to maintain fair treatment for each group.

Transitioning to a Hybrid Working Environment

Many companies view a hybrid working environment as necessary for organizational agility and flexibility. Even so, a move from a centralized workforce to a combination of part-time on-site and remote work requires thoughtful and thorough preparation before taking action. A shoddy implementation can create chaos and disappointment for all stakeholders. PMO leaders need to frame such initiatives as transition projects or change programs. A successful transition project requires:

Defining and Confirming Company Objectives 

Identifying the motives and expectations of the new work model is the first step of a transition. Reasons for a change to a hybrid working environment range from lowering the company’s fixed costs of housing the workforce (real estate costs) to increased productivity. A significant factor in their employees’ desire to work remotely. One survey found that nine in ten employers feel pressure to make a long-term shift to a remote or hybrid working model. Whatever the reasons, management needs to define success by specifying each objective with quantifiable measures, e.g., 20% decline in real estate costs, 10% drop in absenteeism or turnover, 5% increase in sales. Management should convert communicate company objectives into key performance indicators (KPIs)

Analyzing Key Jobs and Tasks

Some work is best performed by individuals working alone or with limited interaction with others. Others require constant connection and feedback from others to complete their tasks. While technology and enlightened management can blur the lines between the two, recognizing the needs of the job and the worker may minimize the stress of one-size-fits-all solutions. A hybrid environment where employees spend time in the office and home is a natural solution.

Robert Pozen, a former President of Fidelity Investments and co-author of Remote, Inc.: How to Thrive at Work…Wherever You Are, recommends that tasks requiring collaboration be done in the office while tasks requiring extended cooperation take place at home. An employee’s tenure is an additional factor; integrating newly hired remote workers in a company’s culture can be difficult without periods of centrally located activity. Questions to consider are:

• Why does a specific task need to occur in the office?
• To what extent does the task require collaboration with others?
• To what extent does information need rapid transmission?
• To what extent are tasks oriented to innovation rather than more transactional activities?

Identifying Technology Needs and Costs

Few organizations can adequately support a remote workforce and keep confidential and proprietary information secure. The technology supporting a hybrid environment can also be the source of frustration and ill will between company and employee. Costs to support the change include additional hardware, greater bandwidth, specialized software for collaboration and communication, and employee instruction. Monitoring online activities, resolving problems, and reinforcing security procedures can overload an existing IT staff.

Also, the decision about who pays for needed upgrades to home offices can have significant cost consequences.

Updating Policies and Procedures

Most companies’ policies and procedures were established in a previous era and reinforced the distinction between office and home. A hybrid work environment typically requires updating, adding, and deleting old policies and procedures that no longer apply. New policies include:

• A description of different work options and a definition of jobs eligible for each option – all work in the office, all work in the home, combinations of in-office and work-from-home positions. Descriptions need to include qualifications and criteria for each job to limit claims of discrimination.
• Expectations for each job holder, whether in the office or work at home, including work schedules, productivity expectations, and compensation.
• Availability and security for personal or family use of company computers and networks, Internet access, common software utilization, and required security measures.

 Including employees in the development of new policies and procedures can reduce resistance to new policies. Companies anticipating the change to a hybrid work environment should develop and communicate the newly applicable policies before initiating action.

Transition Plan

Transforming the work environment to a hybrid configuration is much more than company announcements and physical office adjustments. Remote workers suddenly required to spend time in a central office may resent the need for commuting and the loss of freedom. Those working in an office may find working from home and the intrusion of non-business matters in their workday distressing. Management needs to prepare employees for the pending change to minimize complications.

Companies experiencing successful transitions note that:

• Affected employees were integral in the planning process from the beginning. Their input is critical to define technology gaps, i.e., what is needed vs. what is available, determining work schedules in line with company objectives, and responding to inevitable rumors that always accompany changes.
• Serial implementation and trial-runs enable the companies to discover overlooked obstacles before they mushroom through the organizations. Similarly, opportunities for improvement can be captured and integrated into later phases of implementation.
• Person-to-person connections between remote and in-office employees create a sense of togetherness and reinforce the desired culture. Following the change, successful managers regularly schedule virtual and in-office team-building events to maintain cohesiveness.  
• Educating managers about proximity bias – favoring those closest to us – discourages favoritism so that employees with fewer hours in the office are not disadvantaged for pay raises, promotion, and other company perks. “One of the biggest challenges [of a hybrid work environment] is making sure that remote employees do not become second-class citizens,” says Edie Goldberg, co-author of The Inside Gig: How Sharing Untapped Talent Across Boundaries Unleashes Organizational Capacity. “It cannot be that employees who are in the office get the cool and interesting assignments and those not in the office get passed over.”

Final Thoughts

Business advisers, consultants, and educators agree that the workplace is irreversibly changing as technology shrinks space and time. Routine production and clerical tasks are increasingly performed by computers and robotics, eliminating the need for legions of employees collected at a single site. Though technology has enabled a growing work-from-anywhere movement, humans have an inherent need to connect with others. A hybrid work environment provides workers with freedom of time and space without sacrificing the need for physical contact and face-to-face communications.

While technology seems to connect us more than ever, the screens around us disconnect us from nature, from ourselves, and from others. Wi-Fi alone isn’t enough to fulfill our social needs – we need face-to-face interaction to thrive

Canadian Mental Health Association