27 September 2023

The future of work: Managing the risks of the hybrid workplace

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Marino Mugayar-Baldocchi, Bill Schaninger and Kartik Sharma* says there are three risk areas of hybrid work that deserve careful attention.

With the gradual reopening of nations around the world, organisations have been evaluating post-pandemic working models and the physical return to work.

The COVID-19 crisis forced many organisations, particularly those largely composed of knowledge workers, to shift to a remote model.

Although there is much excitement over restoring some level of in-person interaction in the workplace, 68 per cent of organisations do not yet have a clearly articulated vision or plan in place.

As organisations adopt remote hybrid work, we see three risk areas that deserve careful attention.

  • Erosion of organisational culture and social cohesion.

Our recent research suggests that employees experiencing a lack of clarity in the future vision of the operating model are almost three times as likely to report moderate to high levels of burnout symptoms.

However, it is not enough to simply communicate a clear vision. The supporting rationale must also be solid.

One of the key questions organisations must grapple with is the process by which they bring back their workforce.

Almost 30 per cent of employees say they are likely to switch jobs if made to fully return to on-site work, highlighting that employee well-being and preference need to be considered before deciding on a return to the office.

Organisations must think through how, when, and for what reason they are asking their workforce to return.

Organisational leaders, particularly managers, are responsible for identifying who needs to come to the office and for what reason.

For example, managers should prioritise in-person presence for onboarding and team-based projects that require extensive collaboration.

Physical presence for those events increases the likelihood of employees learning the company culture, establishes in-person rituals that are associated with greater social cohesion, and fosters team-based creativity.

For team members who are unable to attend in person, managers must find opportunities to asynchronously engage those individuals for innovation.

  • Declining productivity.

The ad-hoc experiment with large-scale remote working during the pandemic revealed a number of productivity benefits.

Our research found that a few months into the pandemic, 45 per cent of employees reported working more productively.

Unfortunately, that improvement came at the cost of a blurred work-life boundary and increased symptoms of grief, anxiety, and burnout.

Companies are acknowledging the need for in-person connectivity to repair our frayed social fabric.

Many are trying to offset some of the negative effects through more people-centred policies and HR practices.

However, they are also concerned about a decline in productivity with the new hybrid model.

To prevent that, organisations can focus on measuring outcomes instead of simply inputs like hours logged by employees, at both the individual and team levels.

They can also develop tailored performance metrics that vary by role and function.

  • Inability to experiment and iterate.

The real challenge of the hybrid model is how to manage people and processes to support workers who may now be in person or remote on any given day.

Failure to properly address could negatively impact productivity, employee engagement, and well-being, and, at extreme levels, fuel increased turnover.

To prevent this, organisations need to adopt a test-and-learn approach.

This allows for the ability to execute and move forward while remaining adaptable to change direction if needed.

Among organisations that lead in productivity, 16 per cent continually iterate and tweak their processes as the context shifts, a behaviour that is completely absent in organisations that are laggards in productivity.

The road to success does not require avoiding risk, just managing it appropriately.

As organisations look to embrace a long-term hybrid model, they must focus on preserving their culture, supporting their people and talent processes, and continually revising their approach to this “next normal.”

*Marino Mugayar-Baldocchi partners with organisations to provide research-backed expertise on leadership, talent management, learning and development, and future of work topics. Bill Schaninger designs and manages large-scale organisational transformations. Kartik Sharma partners with clients across a variety of sectors on topics regarding analytics-led organisational transformations.

This article first appeared at mckinsey.com.

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