Corporate culture trends continue to ebb and flow as businesses search for the flexible working approach that best suits their employees. The latest shift? Hybrid’s position as the winning choice is now under discussion as office lease renewals are making a case for in-person working. Business leaders are facing a tricky investment decision heightened by the uncertainty of today’s economic climate. Should employees expect ‘return to office’ mandates in their inbox as the expense of committing to real estate calls for justification? This may risk a wave of employee dissatisfaction that could result in staff turnover. Or, can businesses renew commitment in their hybrid and anywhere work policies, thus downsizing office space with a troubling caveat – collaboration, innovation, and productivity may suffer.
Flexible working hours are becoming more normalised as shown by the UK government’s new legislation to protect a ‘diverse workforce’ and the BBC reports flexible working trends are on the rise as new data suggests the four day work week will be the new normal. However, with the C-suites at Twitter and Starbucks damning ‘work from home’ and enforcing strict return to office mandates this year, the case for hybrid appears somewhat under threat. Particularly when businesses are constantly managing new tensions of hybrid work like remote surveillance, team culture and workplace innovation.
Yet, employees who have now experienced hybrid working are not eager to work for companies mandating strict office-only policies and there in lies the challenge for organisations. For example out of two companies who offer the same role and similar salaries and benefits, it’s the one with flexible working as standard that will be more favourable to join. What is the future of the office, or as I believe, the physical workplace which then encompasses all of our workforce?
With empty office space doubling in London in the last three years (CBRE Investment Management) business leaders find themselves at a crossroad – should they renew or terminate their big city leases?
Many hybrid working policies are being dictated by this decision to rethink organisational real estate.
Some have already made their decision. Our research shows that since the pandemic, one in ten businesses in EMEA have completely gotten rid of their physical office, and more than half have reduced office space. But what about the rest? What should business leaders consider before making their renewal decision?
The innovation conundrum points to an Office or Physical Workplace-based solution
The hybrid model is designed as a compromise to support a distributed workforce whilst still recognising the value of in-person connections. However, our data shows flexible working policies negatively impact an organisation’s ability to innovate successfully. Employees expect a culture of freedom, but if this is at the expense of commercial gains, is hybrid perhaps failing the modern business?
The innovation conundrum builds a case for renewing real estate leases with almost two thirds of respondents saying their work is more innovative if they are in their employer’s buildings. Whilst this may not be what home workers want to hear, these findings reveal a harsh truth that businesses must address. Teams that are struggling to innovate remotely threaten the longevity of their organisation. Innovation outputs are paramount for commercial success. If employees are not empowered to be creative and come up with ideas remotely, the successful rise of hybrid work will fail to become a reality.
The hybrid way, or the highway
To label flexible working as a failure in response to innovation decline would be very wrong. Distributed teams are the new reality as an overwhelming majority of the EMEA workforce (81%) report a higher job satisfaction if they can work from anywhere. Of course this depends on the nature of the employee’s job function.
Post-pandemic anywhere work policies have resulted in positive impacts across the board with half of EMEA enjoying improvements in communication with managers, morale, and collaboration. Gone are the days of traditional office culture where employees would expect surveillance by managers as ‘part of the job’ or accept gruelling long days at their desks.
According to Future Forum, more than a third of workers in UK, France and Germany are back in the office full time, but more than half of them are not there on their own accord, saying they would prefer more flexible arrangements. Indeed, the Dutch parliament approved a law in summer 2022 to establish working from home as a legal right for certain jobs.
Business leaders cannot afford to doubt the value of flexible working as they risk their employee retention plummeting and their recruitment efforts stagnating. We all saw the backlash that can happen when Elon Musk demanded Tesla workers to return to the office.
However, open plan spaces should not be blindly scrapped in response to the hybrid craze, nor should hybrid workplace alternatives. The answer lies in achieving a balance. The strategy lies in the advantages of technology, culture and, of course, our people themselves, allowing them to do parts of their role in the best place that works for them and the organisation, be that all at home or all at the physical workplace. The question then is how to equip and enable the organisation to achieve that balance?
Reviving innovation with a digital-first approach to productivity
Creativity and technology are not mutually exclusive assets. Technology has enhanced every channel in business, every aspect of daily life. If given the right foundation, digital creativity can thrive.
Organisations need to take better advantage of the tools designed to facilitate innovation. Accelerating secure access to corporate intelligence for all employees regardless of location will be instrumental to enabling digital creativity. Commitments to a workplace ‘refresh’ should leverage technology whilst also taking upskilling programmes, remote work security and corporate purpose to the next level. This will spearhead a cohesive culture of authenticity and collaboration. For the workforce to truly benefit from the power of digital tools, they must first have this foundation.
Digital transformation for creative outcomes
Introducing mandated in-person ideation sessions would be a doomed approach to the innovation conundrum. Innovation and productive output don’t need to suffer because employees aren’t in the office. Companies that are thriving are setting up as ‘remote-first’ with no second class citizens at home or in the office. Working from anywhere is now cemented as an integral part of modern corporate DNA and cutting back on physical space may be what is needed to make room for the inevitable digital-first future. What leaders need to focus on is the investment that is right for the longevity of their business.