Is Return to Office and Hybrid Work Actually Working?

• With 74% of US 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 model.
• That’s because there’s a single traditional office-centric model of M-F 9-5 in the office, but many ways to do hybrid work. Moreover, what works well for one company’s culture and working style may 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 finds that 54% of organizations find that productivity improved from adopting a more hybrid working style, but only 22% 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 full saying: “What gets measured gets managed – even when it’s pointless to measure and manage it, and even if it harms the purpose of the organization 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 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 accordant degree of attention and care at the highest levels of an organization. Otherwise, the C-suite will not be coordinated and fail to get on the same page about what counts as “success” in hybrid work, and find themselves in a mess six months after their hybrid work transition. 

It’s a best practice for the C-suite to determine the metrics at an offsite 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 mid-level managers to assess subjective and qualitative ones. While there’s 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 their 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. Each of these metrics should be measured before establishing a permanent hybrid work policy, to get a baseline. Then, the metrics need to be evaluated every quarter, to evaluate the impact 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 offering more remote work facilitates both retention and recruitment. For instance, a survey of 1,000 HR leaders finds that 95% of respondents believe offering hybrid work to be important for recruitment, and 60% perceive hybrid work to boost retention. And in a report by Owl Labs that surveyed 2,300 full-time US workers, 52% indicated they would be willing to take a pay cut of 5% 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 “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% 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 is 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% 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% of employees would quiet quit if forced back to the office full-time, meaning do 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 wellbeing and burnout involves a hard metric: employees taking sick days. By measuring how that changes over time – seasonally adjusted – you can evaluate the impact of your policies on employee mental and physical health.

Diversity, equity, and inclusion represents an often-overlooked but critically important metric impacted by hybrid work. We know that underrepresented groups strongly prefer more remote work. Thus, 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 that 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% of employees would leave without adequate professional development, and that applies even more so 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 staff 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 and measurements of their productivity.

Once you have the baseline data from these diverse metrics, at the offsite the C-suite needs to determine which metrics matter most to your organization. Choose the top three to five metrics, and weigh their importance relative to each other. Using these metrics, the C-suite can then decide on a course of action on hybrid work that would best optimize for their desired outcomes.

Next, determine a plan of action to implement this new policy, including using appropriate metrics to measure success. As you implement the policy, if you find the metrics aren’t as good as you’d like, revise the policy and see how that revision impacts 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 and two days in another, and assess how that impacts 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.

Written by Dr. Gleb Tsipursky.
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