Hybrid, Real Estate and the 4 day week…..

Ever wondered whether the spate of recent articles questioning the productivity of hybrid working (NYT), or reporting on improved workplace attendance (WSJ) is aimed at fending off a commercial real estate collapse and maybe the next banking crisis?

Cush­man & Wake­field do tell us that vacan­cies are expected to be 50 percent or more above pre­-pan­demic levels during the next ten years, roughly equi­val­ent to the office supply of Metropolitan Washington, a quarter of which they add, will require redesign.

Tech, Big Consulting, and now banking have all made significant reductions in staff in anticipation of recession – a sign that the balance of power in the talent wars is perhaps shifting back to employers.

Meanwhile, employees, concerned that hybrid working despite assurances to the contrary was only ever temporary, continue to puzzle over the resistance. Productivity has not suffered and turnover and office costs have been reduced.

Recalcitrant employers however may have a new bargaining chip on the horizon. Four-day work-week pilot programs are being run in the US, UK, Canada, and New Zealand. First tested during COVID the concept has since morphed into a feature to improve retention.

In the UK, 61 trial companies said they would retain the paid day off after the completion of the trial, experiencing sharp drops in turnover and absenteeism while maintaining output. Most participants were small employers and some reported challenges in getting things done but avoided adding to employee work by calling fewer meetings.

Approximately only 2% of participants reported reduced productivity, and 15% significant gains. Most importantly, 39% of employees reported feeling less stress, and the majority noted better mental and physical health.

How often should employees be in the office and when, and who should make that decision was the raging debate in 2022. Leaders demanded a return, and employees ignored them but the U.S. nonetheless, saw 72% of businesses with employees who rarely or not at all worked away from the office. Perhaps explaining why employee engagement slumped that year, and not just in NA according to Gallup.

Working arrangements remain an ongoing conversation; what is best done in person, and what is more easily completed remotely. The conversations will be unique to each organization and will change over time as new observations emerge, likely to be informed by generational attitudes toward work.

The pandemic demonstrated how productive people could be away from office distractions and, more recently, how frustrating it is to waste time traveling to meetings that could easily be conducted online.

The world was forced to accelerate remote working and consequently, there are few control group studies to help assess the impact on productivity. Tests since the lockdown show no significant difference and claims of falls in productivity, for the most part, are from organizations that went from fully in-office to fully remote.

But the genie is now out of the bottle and not eager to return. The Pandemic reignited the work-life balance conflict ….and life won! The comparison should not be made with pre-COVID but with the last three years. Consider the impact of removing hybrid today from a workforce better acquainted with quiet quitting. Most observers agree that it makes no sense to return to a five-day attendance schedule but employers must validate that against their own individual trade-offs.

The combined threat of recession and downsizing may move the hybrid needle further in favor of employers. However, if a four-day week becomes the norm it may prove to be the bargaining chip needed to get people “back in the office”.

Image by Gerd Altmann at Pixabay

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