Employers and staff seek truce on office working

Who decides companies’ policies on working locations helps to determine how well they are received. Staff prefer it when they have a say in the decision. Photograph: iStock

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When videoconferencing specialist Zoom called staff back to the office last month, it was widely interpreted as the disintegration of the remote work experiment. The pro-office message, the best part of four years after the pandemic triggered a white-collar retreat, was seized on by Elon Musk, who described it as morally wrong for “laptop classes living in la-la-land” to work from home.

Amazon is tracking attendance and emails staff who fail to attend three days a week, while Google says absence will affect staff performance reviews. In the UK, banks including Lloyds Banking Group, Citi and HSBC have taken the September cue to tighten their in-office mandates.

But even as some employers take a more aggressive approach to forcing staff back to the office, the latest data shows the picture on working patterns is more nuanced. Even after its clampdown, Zoom only requires two days in the office, while most other companies with office staff expect to retain a component of remote working.

“What doesn’t get the headlines is that there’s a bigger percentage of companies moving from full-time in the office to much more flexibility,” says Brian Elliott, co-founder of Future Forum, a consortium on the future of work launched in 2020.

As the northern hemisphere shifts out of summer holiday season – traditionally the point at which companies have sought to tighten their return-to-office policies – tensions with staff are far from resolved. But the debate over working patterns is entering a new phase, as companies examine how to enhance the productivity and performance of hybrid policies rather than viewing them simply as a staff perk.

Finding the middle ground

In the US, 33 per cent of companies are fully flexible – meaning employees work entirely remotely or are given free choice over when they go to the office, according to the Flex Index, which collects data on work policies from 6,500 companies.

The proportion of US companies requiring full-time office attendance dropped from 49 per cent in January to 39 per cent in July. Meanwhile the “Goldilocks” hybrid model, which demands a minimum number of days in the office, had been adopted by 28 per cent of companies by July, up from 20 per cent at the start of this year.

On average, US companies stipulate 2.56 days in the office per week, according to the new Flex Index report, halfway between what employers hope for (2.75 days), and the 2.21 days employees would like.

“This two to three days a week [in the office], I think of as a truce,” says Rob Sadow of Scoop, which supplies hybrid work technology and oversees the Flex Index. “Employers may not get exactly what they want; employees may not get exactly what they want.”

Globally, the Leesman Index, which measures employee engagement, reports that about a third of companies have mandated office time while almost half are letting employees choose, with the bulk selecting Friday as the day they are most likely to work remotely.

Give staff a say

Who decides companies’ policies on working locations helps to determine how well they are received. Mandatory policies are popular with employers in part because they are simple to impose – but staff prefer it when they have a say in the decision.

It’s got to work for the company, and more importantly the clients —  Jamie Dimon, JPMorgan Chase chief executive, on working from home

Syreeta Brown, group chief people and communications officer at UK retail lender Virgin Money, says the group conducted a lot of research at all levels before deciding most employees could work anywhere in the UK. The pattern, though, was set in consultation with the manager and team. “It’s a lot of work. That’s why companies find this stuff challenging.”

According to a Boston Consulting Group survey of 1,500 mainly US and European office workers in spring 2023, almost two-thirds (62 per cent) had no say in their company’s policy. Employees were least satisfied when their work pattern was set from the top of the company; when their direct manager dictated the policy, the proportion of unhappy respondents fell, and decreased again if the team decided.

Differences in working styles between executives and employees partly explain the mismatch in expectations for in-office work.

BCG says managers spend nearly half their time on tasks requiring them to meet in-person (such as giving feedback or inducting new recruits), compared with their staff, who spend longer on “focus work”, such as writing reports, which is better suited to remote.

JPMorgan Chase’s chief executive Jamie Dimon, a self-confessed sceptic about working from home, recently told the Economist he believed the remote model was less effective for management teams and younger staff, adding that decisions would not be made by “pandering to employees”. He added: “It’s got to work for the company, and more importantly the clients.”

Some employers are moving beyond blunt policies dictating days in the office to aligning tasks and locations. Work patterns may also be organised by experience. RSM, the accounting firm, expects junior workers to be in more than senior staff. John Taylor, the company’s UK chief operating officer, says the firm explains to “young people it’s not about presenteeism, but it’s about investing in their career”.

But BCG’s Debbie Lovich says most executives are just monitoring “‘butts in seats’ and [entry] card swipes, instead of managing towards joy and productivity”.

Whether hybrid work is more productive than fully remote or fully in-office workforces remains inconclusive. A working paper published in July by academics Jose Maria Barrero, Nick Bloom and Steven Davis suggests fully remote working reduced productivity by 10 to 20 per cent, compared with full-time office working, due to obstacles such as communication challenges and home distractions.

While the paper suggests productivity of hybrid workers was only flat or slightly higher than that of office workers, the academics believe a hybrid model is attractive because it reduces recruitment and retention costs. Stanford university’s Bloom has estimated that the offer of flexible work is equivalent to about an 8 per cent pay increase, based on surveys of workers, who seem to value the greater freedom and the reduced cost of, for example, commuting less frequently.

The shift in working habits is already showing up in data on office usage, which will ultimately dictate property decisions when long leases come to an end.

A study of a sample of organisations by workplace consultancy AWA found average office attendance had increased to 35 per cent worldwide, up from 26 per cent in July last year. Desk use increased more sharply, from 33 per cent to 48 per cent, reflecting a reduction in office space available as businesses consolidate their real estate.

But many companies are starting to realise that successful flexible working is not the outcome of a simple calculation about office space and time spent in it. It also requires training leaders to run hybrid and distributed teams.

“We’ve doubled down on manager training,” says Mastercard’s Fraccaro. “The big success factor in this is investing in people.” – Copyright The Financial Times Limited 2023


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