Can Your Company Do Hybrid Better?

“We’ve moved to a new status quo that is hard to change,” says Benjamin Friedrich, an associate professor of strategy at the Kellogg School who researches labor and personnel economics.

Companies that have tried to implement a complete return to office have faced a lot of backlash. “You have to make a really strong case if you want a full return to office because there’s really strong evidence in favor of hybrid,” he says.

So rather than reflexively calling workers back to the office because it is more comfortable for managers, many companies would be wise to focus their efforts on designing and codifying better hybrid policies instead.

“Both remote and face-to-face work have distinct advantages and disadvantages that are context-specific and that impact workers differently,” says Friedrich. “A hybrid schedule works when it captures the value of proximity and flexibility and minimizes remote’s downsides.”

By taking a close look at the evidence—both external research and internal data on how effectively various parts of a job can be done remotely—leaders can make sure their hybrid system is one that allows both the company and its workers to thrive.

Below, Friedrich offers advice on how firms can do just this.

Recognize the benefits of in-person work

The value of fully remote work has significantly decreased since the pandemic, Friedrich says. Safety is no longer employees’ top priority and now people want to feel more connected to their work and their colleagues. As a result, the total share of employees who want to work only from home is relatively low.

Moreover, studies show that face-to-face interaction fosters creativity and innovation, and helps workers complete their tasks faster—which are compelling reasons to bring people back to the office. “A lot of those benefits are lost if you’re fully remote,” he says.

In particular, Friedrich cites research on the value of proximity, which found that coworkers who work face-to-face receive more feedback and have more opportunities to learn from each other informally than remote colleagues.

This plays out in relationships between junior and senior colleagues, Friedrich explains. For example, if a junior colleague needs advice on a difficult task, he may feel intimidated asking a senior colleague for help if they haven’t interacted much. However, if they’ve met informally—like seeing each other at lunch—it is much easier to start up a conversation about work. Multiplied over the course of weeks, months, and years, this fosters learning across the organization and can translate social capital into long-term career growth for the junior colleague.

“Social interaction helps you make progress in your career by building relationships. You’re at a disadvantage if you don’t spend as much time in person,” Friedrich says.

So clearly, it makes sense for a lot of organizations to insist on some face-to-face time for many if not most roles.

Recognize the benefits of flexibility

That said, flexibility is one pandemic-era benefit that workers want to keep. And most knowledge workers have come to expect some form of hybrid work. Acknowledging this in your stated policies can be critical for talent recruitment and retention.

“The pandemic created a complete change that gave people time to think about their purpose in life, how they think about priorities, and the role that their job plays,” Friedrich says.

As a result, some workers now are no longer willing to make sacrifices that previously went unquestioned: like daily commutes. In fact, some workers are willing to accept lower pay for flexibility. If companies offer a hybrid model with some opportunities to work from home, these companies, on average, raised pay less over the past year.

“If you offer hybrid opportunities, you’ll access the talent pool that you otherwise may not. If you can provide this flexibility, it gives you an edge in the competition for this talent,” says Friedrich.

Companies may also find that reductions in productivity from remote work may be offset by gains in employee engagement.

“Their mental health could be better. They may feel they have better work–life balance,” Friedrich says. “These factors might, overall, keep employees happy and motivated, which can help with employee retention.”

Or, as several studies on companies have found, employees might use remote time for focused work, leading to productivity increases. Still, other studies have found negative effects, so these gains are not guaranteed. “If there’s some flexibility,” Friedrich says, “the cost to the business might be worth it for other productivity gains.”

Be aware of who benefits and who loses out

Even companies convinced about the benefits of hybrid work arrangements will need to carefully consider the details. How will the timing and amount of remote work affect employees in different roles, in different demographics, and at different stages of their careers?

The downsides of remote work, for example, tend to impact experienced workers less than junior ones, who miss out on development opportunities.

Moreover, letting employees choose how often they work remotely can contribute to asymmetric inequalities among different employee groups, including women. These inequalities then need to be managed.

“Remote work could open up opportunities, but it could also mean that if we compare male and female employees, there might be new imbalances if we allow a choice for more flexibility or more in-person time,” Friedrich says.

On the one hand, this could systematically help groups that have historically been at a disadvantage in the labor market. Friedrich notes that overall, women’s participation in the labor force has grown beyond pre-pandemic levels, driven most notably by the record numbers of working women with children under five.

But on the other hand, women who choose to work more hours remotely might be seen as less ambitious and less hard-working, with colleagues perhaps assuming they are taking care of their children on the clock. Or they might be treated differently in other ways.

“Gendered biases could make some disadvantages of remote work’s impact on your career progression worse for women,” he warns.

Turn to your internal data

While it’s helpful to keep these general trends in mind, the right hybrid policy for any given organization will need to be specific to its needs. Which is why it’s important to rely on internal data in your decision making.

To design a successful system, Friedrich says that companies will need two types of data: employee sentiments (like how their workforce feels about the way the business is currently being done, its policies, and potential changes) and tracking indicators (or ways of measuring performance, like productivity output or employee-retention rates).

“If you can detect issues in your data, it helps you understand what needs to be adjusted to maintain benefits from flexibility but also mitigate some of the disadvantages,” he says. “You can track, for example, if collaboration is less effective with people who haven’t had the same access to training and mentoring because they started while everyone was remote.”

With this information, leaders can determine what’s working, what isn’t, and how the current hybrid policy, official or otherwise, can be recalibrated and codified.

Focus on communication

Internal data comes with another benefit, too: it helps leaders better communicate the business case behind their hybrid work strategies. This is critical, because even the most carefully considered policy will fail if employees can’t understand it.

“With internal data, you can make a convincing argument based on the facts that are true in your organization,” he says. “Saying ‘everybody’s doing it’ or citing media articles won’t help your case as much as knowing what works and doesn’t in your context.”

And as always, clearly communicating your goals, policies, and timelines is key. But that said, a decide-and-announce approach will backfire.

“You want to have open communications,” Friedrich says. “You want to create opportunity for feedback because you want this to be a win–win.”

One key piece of advice: when soliciting feedback from your employees, only ask questions that you’re willing to act on. If people feel like they’ve been asked multiple times about what they want to see done differently, but nothing has changed, that can lead to more disengagement.

Finally, as you track data over time, continue to assess changes and remain open to adjusting your policies. Because flexibility isn’t just for employees, but for the company, too.

“You want to make improvements and not be stuck with an ineffective policy.”