Management Challenges in the Brave New Hybrid Working World

The shift towards remote and hybrid working models driven initially by the pandemic but increasingly looked on a fundamental element of any job has become a key strategy for attracting talent. However, maintaining employee engagement and managing turnover in these flexible work environments remain significant challenges for employers. There are more fundamental challenges in terms of bricks and mortar fixed costs to reflect the new reality.

Investment and Office space

The drive to hybrid working models and remote working has resulted in a large number of organisations being left with offices that are too large relative to the numbers of employees using them on a daily basis. We have been speaking to clients where daily utilisation of office space has fallen below 10 % of headcount on certain days of the week. Other clients have already reacted to what is happening in practice and have made the decision not to open their offices on Mondays or Fridays, unless there is a specific event on. The cost /utilisation of their premises is a significant issue for clients with large amounts of capital tied up in buildings or long term leases which are no longer fit for purpose and are just too expensive. We expect to see significant rightsizing in terms of office space over the next year or two. Given a significant percentage of pension funds are invested in commercial real estate this is an unwinding process that everyone has an interest in and it needs to be managed very carefully.

 

Managing a Remote Workforce

Very few organisations developed with the express intent of having a majority remote workforce, there are exceptions like Avon of course. Most organisations reacted to the pandemic as best they could, but the truth of the matter is that the transition in the working model to a remote one was not foreseen or a strategic goal.  That has left situations where employers and employees were implementing policies and adapting on the fly. Ther are huge challenges in manging the balance between an employee’s preference to work remotely and an employer’s preference of a significant in-office presence. We have seen retention rates plumet in certain organisations who have implemented rigid Return to the Office protocols. The increase in turnover causes organisations to haemorrhage intellectual capital. This appears to be a price some organisations are happy to bear, even though it is going to impact negatively. Its very important that organisations realise that the ties that bind talent to an organisation are somewhat loosened by remote working, communication and engagement have become key to managing and crucially retaining a remote workforce.

 

Corporate Culture and Retention

Employee Engagement and Morale is a significant component of Corporate Culture.  How do organisations ensure that new joiners acquire a sufficient understanding of the shared values, beliefs, behaviours that underpin how people interact with each other in an organisation and how that impacts on an organisations’ identity? New joiners working remotely are significantly less likely to feel the same loyalty to an organisation as those whose induction was done on a face to face basis. In days gone by an organisations or a team’s morale and the development of a culture was frequently assisted with liberal alcoholic lubrication on Thursday and Friday nights. Those bonding experiences were very influential in terms of developing teams. The lack of those social bonds in an organisation context has rendered new hires significantly less sticky. New hires are increasingly more transactional in terms of how they view an organisation and more open to being induced to leave as they don’t have the same sense of belonging. The companies who put the extra effort in to engender a greater sense of belonging and corporate membership are those which will have significantly better retention rates

Our Hardwiring

We might not think of it but it is a crucial element of how we interact with others. Humans evolved roughly 6 million years ago, for over 99% of that time we as a species operated as hunter gatherers in highly cooperative social groups. Those small bands of hunter-gathers typically walked 16,000 -17,000 steps a day. Your body is a machine both evolved for and optimised to this baseline of movement and activity. In evolutionary terms we are only the blink of an eye  – about 150 generations – away from being hunter gatherers. There have been massive changes in society and how society is organised over the last few hundred years and the simple truth is that our bodies have not had the time to evolve to reflect the realities of modern life

Our evolution continues to have a massive impact on our day to day lives and whether we feel fulfilled by what we do for a living. Today’s hairless apes sitting in front of a laptop on Teams calls for 7-8 hours a day are just as much slaves to their genes as their ancestors. At least 20% of our brain’s activity is dedicated to social cognition, including understanding relationships, hierarchies, and social interactions. The transactional nature of gossip and stories is integral to how we operate in groups and crucially to how we establish ourselves in hierarchies. This is reflected in the old Irish proverb Dúirt bean liom go ndúirt bean léi. Human cooperation and human societies are fundamentally shaped by the power of stories and our willingness to buy into the values and message of a particular story.  There are 2.5 billon people alive today who believe in the 2000 year old story of a carpenter from Judea who could walk on water for instance. The power of stories enables very large groups of humans to achieve incredible things. Every company sells a story to its employees, the power and the strength of the company is directly linked to the power of the story being sold.

Millenia of evolution is hard wired into our brains and our bodies. That evolution is explicitly focused on understanding social interactions in person, not over a computer screen. Organisations need to be mindful of this when developing policies to facilitate remote working and its impact on the productivity and performance of teams.

Return to the Office – to Mandate or not to Mandate

Companies are facing a clear choice on their Return to The Office policy. If they adopt a position where they insist employees return for 5 days a week experience to date suggests that employees will return, but they’ll go straight onto the job boards to start looking for their next role. While companies may not like it evidence to date suggest that a significant majority of workers prefer hybrid/remote models. Any mandated Return to The Office has so far had a direct correlation with an increase in staff turnover as employees vote with their feet. Companies have to decide if the pluses of mandating a return to work in terms of greater productivity and collaboration outweigh the negatives in terms of attrition and damage to morale. The evidence to date would suggest that the damage from the loss of intellectual capital would outweigh the benefits of increased collaboration. That being said, it appears to be a point of principle for some organisations and it’s a cost and a risk they are willing to take.