Are Return to Office and Hybrid Work Actually Working?

One way and one size will never fit all

Published: Wednesday, May 10, 2023 - 12:03

With 74 percent of U.S. companies transitioning to a permanent hybrid work model, leaders are turning their attention to measuring the success of their return-to-office and hybrid work policies. That’s because, in the United States, there’s only one traditional office-centric model of M–F/9–5, but many ways to do hybrid work. Moreover, what works well for one company’s culture and working style might not work well elsewhere, even within the same industry. So how should a leader evaluate whether the model they adopted is optimal for their company’s needs, or whether it needs refinement?

The first step involves establishing clear success metrics. Unfortunately, relatively few companies measure important aspects of the hybrid work transition. For example, a new report from Omdia says 54 percent of organizations found productivity improved from adopting a more hybrid working style, but only 22 percent of organizations established metrics to quantify productivity improvements from hybrid work.

As the saying goes, “What gets measured, gets managed.” It’s important to remember the longer version: “What gets measured gets managed—even when it’s pointless to measure and manage it, and even if it harms the organization’s purpose to do so.” The second part of the saying points to the importance of carefully selected metrics that are both meaningful to the organization’s success and can be effectively measured, ideally quantitative and objectively, but if needed, also qualitatively and subjectively.

A hybrid work model is a strategic decision

From my experience helping 21 organizations transition to hybrid work, it’s important for the whole C-suite to be actively involved in formulating the metrics, and for the board to approve them. Too often, busy executives feel the natural inclination to throw it in HR’s lap and have them figure it out.

That’s a mistake. A transition to a permanent hybrid work model is a strategic decision about the company’s long-term future. It requires an according degree of attention and care at the highest levels of an organization. Otherwise, the C-suite will not be coordinated, will fail to get on the same page about what counts as “success” in hybrid work, and will find itself in a mess six months after a hybrid work transition.

It’s a best practice for those in the C-suite to determine the metrics at an offsite meeting where they can distance themselves from the day-to-day bustle and make long-term strategic choices. Prior to the offsite, it’s valuable to evaluate initial metrics, including getting a baseline of quantitative and objective measures, as well as doing a thorough survey and some focus group interviews with employees and midlevel managers to assess subjective and qualitative measures. While there are plenty of external data on hybrid work preferences, each company has a unique culture, systems and processes, and talent. Thus, the C-suite will find internal data very useful in its decision-making at the offsite.

Which success metrics matter for your hybrid work model?

Based on the experience of my clients, companies focus on a variety of success metrics, each of which may be more or less important. To get a baseline, each of these metrics should be measured before establishing a permanent hybrid work policy. Then, the metrics need to be evaluated every quarter to evaluate the effect of refinements to the hybrid work policy.

Retention offers a clear-to-measure hard success metric, one both quantitative and objective. A related metric, recruitment, is a softer metric: It’s harder to measure and more qualitative in nature. External benchmarks definitely indicate that offering more remote work facilitates both retention and recruitment. For instance, a survey of 1,000 HR leaders finds that 95 percent of respondents believe offering hybrid work is important for recruitment, and 60 percent perceive hybrid work as boosting retention. And in a report by Owl Labs that surveyed 2,300 full-time U.S. workers, 52 percent indicated they would be willing to take a pay cut of 5 percent or more to be able to choose where they could work.

Thus, if the C-suite chooses to adopt a more flexible policy, I recommend my clients put it on their website’s “Join Us” page, as did one of my clients, the University of Southern California’s Information Sciences Institute. HR will inevitably find they get an uptick in inquiries from job applicants referencing this policy, as well as potential hires showing enthusiasm for it in interviews. That enthusiasm is something that can be measured.

A key metric, performance, may be harder or easier to measure depending on the nature of the work. For instance, a study published in the National Bureau of Economic Review reported on a randomized control trial comparing the performance of software engineers assigned to a hybrid schedule vs. an office-centric schedule. Engineers who worked in a hybrid model wrote 8-percent more code over a six-month period. Writing code is a standardized and objective measure of productivity and provides strong evidence of higher productivity with at least some remote work. If there’s no option to have such clear performance measurement, use regular weekly assessments of performance from supervisors. But avoid software tracking programs, because the Owl Labs report finds that it causes 45 percent of employees to feel stressed.

Collaboration and innovation are critical metrics to effective team performance. But measuring them isn’t easy. Evaluating them requires relying on more qualitative assessments from team leaders and team members. Moreover, by training teams in effective hybrid innovation and collaboration techniques, you can improve these metrics.

Several hard-to-measure metrics are important for an organization’s culture and talent management: morale, engagement, well-being, happiness, burnout, intent to leave, and quiet quitting. For instance, the Owl Labs report indicates that 46 percent of employees would “quiet quit” if forced back to the office full-time, doing the bare minimum needed to avoid getting fired. Getting at these metrics requires the use of more qualitative and subjective approaches, such as customized surveys specifically adapted to hybrid and remote work policies. As part of doing the survey, it’s helpful to ask respondents to opt into participating in focus groups around these issues. Then, in the focus groups, you can dig deeper into the survey questions and get at people’s underlying feelings and motivations.

One way to get at well-being and burnout involves a hard metric: employees taking sick days. By measuring how that changes over time—seasonally adjusted—you can evaluate the effect of your policies on employee mental and physical health.

Diversity, equity, and inclusion (DEI) represent an often-overlooked but critically important metric affected by hybrid work. We know that underrepresented groups strongly prefer more remote work. Thus, those of my clients who chose to have a mostly office-centric schedule had to invest substantial resources into boosting their DEI to compensate for the inevitable loss of underrepresented talent.

Measuring DEI is quite easy and objective: Look at the retention of underrepresented rank-and-file staff and leaders as the hybrid work strategy gets implemented. Also, make sure that your surveys allow staff to self-identify relevant demographic categories so you can measure DEI as it relates to engagement, morale, and so on. 

Last, but far from least, my clients also consider professional and leadership development, and onboarding and integration of junior team members. A Conference Board survey finds 58 percent of employees would leave without adequate professional development, and that applies even more to underrepresented groups. Leadership development is critical to the long-term continuity of any company. And onboarding and integration of junior staff is a fundamental need for success. Yet most companies struggle with figuring out how to do these well in a hybrid setting.

Measuring professional development is best done through more subjective tools, such as surveys and focus groups. You can also assess how much people improve in the areas where they received professional development, and compare in-person vs. remote modalities of delivering learning.

Evaluating leadership development is easier and more quantitative and objective. Assess how well your newly promoted leaders succeed based on performance evaluations and 360-degree reviews. Onboarding and integrating new staff involves performance evaluations by supervisors as well as measurements of new employees’ productivity.

Conclusion

Once it has the baseline data from these diverse metrics, the C-suite needs to determine which metrics matter most to the organization. Choose the top three to five metrics and weigh their relative importance. Using these metrics, you can then decide on a course of action on hybrid work that would optimize for the desired outcomes. Next, determine a plan of action to implement this new policy, including using appropriate metrics to measure success. If you find the metrics aren’t as good as you’d like while implementing the policy, revise it and see how that revision affects your metrics.

Likewise, consider running experiments to compare alternative versions of hybrid policy. For instance, you can have one day a week in the office in one location, two days in another, and assess how that affects your metrics. Reassess and revise your approach once a month for the first three months, and then once a quarter going forward. By adopting this approach, my clients found they can most effectively reach the metrics they set out for their permanent hybrid model.

About The Author

Gleb Tsipursky

Dr. Gleb Tsipursky helps quality professionals make the wisest decisions on the future of work as the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts. A proud Ukrainian American, he is the best-selling author of seven books, including Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters and Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage. His cutting-edge thought leadership has been featured in more than 650 articles in prominent publications such as Harvard Business Review, Fortune, and USA Today. His expertise comes from more than 20 years of consulting for Fortune 500 companies from Aflac to Xerox and more than 15 years in academia as a cognitive scientist at the University of North Carolina-Chapel Hill and Ohio State. Contact him at Gleb[at]DisasterAvoidanceExperts[dot]com, Twitter@gleb_tsipursky, Instagram@dr_gleb_tsipursky, LinkedIn, and register for his Wise Decision Maker Course.