Four in 10 companies will try to undo hybrid working – and fail

Hybrid models are here to stay, right?

As the world pivots to a more flexible approach to working, it seems as if the archaic nine-to-five, office-based models are slowly being phased out. However, that doesn’t mean that all employers are necessarily happy about it.

Forrester’s latest report, Predictions 2023: Future of Work, found that four in 10 hybrid working companies will try to undo anywhere work and fail – with 49% of leaders expected to dramatically alter their return-to-office approach this year.

Why? Well, it all comes down to economic panic and inflationary fears. J.P. Gownder, principal analyst at Forrester, tells HRD that employers are having a knee-jerk reaction to the ongoing talent shortage and inadvertently returning to old habits.

“Many employers haven't been too quick to try to undo remote work; a good two-thirds of companies have loosened up their policies compared with pre-COVID,” he says. “However, as economic performance and company results struggle, some leaders fall back on old lessons learned over long careers.

“The data says that employees are more productive at home, on average, so hybrid or anywhere-first approaches will actually increase productivity. However, old-school leaders like to see people in front of them, which often does not drive productivity, while in other cases there are legitimate reasons for employees to spend at least some time in the office.”

Employees in driving seat

And it’s the same story all over. Leadership teams and workers are battling it out to see whether hybrid or in-office will reign supreme – with HR leaders stuck uncomfortably in the middle. But can executives really afford to dictate how and where their people work in 2023?

Employees and candidates are very much in the driving seat in today’s tight talent market. And so with CEOs very vocal about their desire for employees to return to their workplaces, are they leaving themselves open to a talent exodus?

“Unfortunately for employers who try to yank employees back into the office… employees often have other ideas,” warns Gownder. “Adherence remains sketchy among many employees, meaning that they come in fewer days than company policies dictate. High levels of attrition — driven in part by employees who seek more flexible hybrid or remote working arrangements — will harm these companies.

“And recruiting and onboarding new employees is costly. Because we remain in a talent-constrained downturn in which economic conditions have worsened but talent remains scarce and valuable, companies that try to reverse hybrid work policies will be particularly disadvantaged.”

Investing in internal talent through L&D

It’s this competitive labour market that’s driving real change in companies. Forrester’s report found that savvy companies are now reducing talent waste by recycling it, effectively bumping internal talent mobility to a staggering 25%.

This itself, the report warns, cannot be attempted without significant investments in learning and development (L&D) – something which had gained popularity since the pandemic. Data from Capterra found that 49% of companies increased their L&D budget in 2022 – a rise from 41% in 2021 – in part due to employee expectations around upskilling and personal growth.

“Despite tight budgets and pressure, these efforts will yield fruit, encouraging firms to take additional steps to overhaul workforce planning,” reads the report. “This will be a boon for workforce and talent intelligence vendors; however, they will scramble to prepare their new and upsold customers for the opportunities that their tools provide, given the barriers to effective implementation that they still face.”

Looking ahead to the rest of 2023, it’s a muddled outlook for Canadian organizations and their people. On the one hand, unemployment continues to decline as the government improves immigration policies and beleaguered sectors find their feet. On the other, mass layoffs seem to be taking hold, with Amazon and Salesforces laying off thousands of staff this month alone.

What does seem clear, however, is that candidates and employees continue to drive the trends – especially where L&D, talent migration, and “empathetic leadership” are concerned. For HR departments, it’ll be a case of leading with transparency in the coming months – being open and honest about any issues on the horizon  - and allowing your people to help navigate organizational strategy.