Does hybrid working really lead to less productivity?

Rather than worrying about productivity, organisations should rethink their approach to managing and leading hybrid workers, writes UNSW Business School’s Frederik Anseel

You might have noticed in the newspaper in the past couple of weeks: the latest offensive against hybrid working has been launched. More than anything else, the pandemic has launched a work revolution. So the counter-revolution is not unexpected. Hybrid working, which gives people more freedom over where and when they work, is a revolution that freed people from the paralysing chains of the office and getting stuck in traffic.

But not everyone is happy with that. Companies that have made large real estate investments must recoup them. Old hands who consider themselves the measure of all things productive argue that, if it doesn’t work for them, it doesn’t work for anyone. A group of micromanagers only feels comfortable if they can monitor (not to say control) their team members every moment of the day. They never miss an opportunity to say, “See, it’s not working. Let’s get everyone back to the office.”

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UNSW Business School’s Professor Frederik Anseel said the case of Zoom has confirmed that hybrid working works well if there is also occasional personal contact. Photo: supplied

Debunking hybrid working myths

As a supporter of the work revolution, I want to correct some myths.

Zoom has featured prominently in the news over the past months. During the pandemic, Zoom had been the symbol of office slaves shaking off their chains. The company is now calling its employees back to the office. If that doesn’t prove the bankruptcy of hybrid working, what does?

The reality is that Zoom employees are expected to be in the office two days a week. Zoom thus confirms what the rest of the world also knows: hybrid working works well if there is also occasional personal contact. Reformulate their policy and the world of hybrid work has further evolved: If you live nearby, you can work from home for three days. If you live further away, even more. That doesn’t sound too bad, and the reality is a far cry from the spectacular downfall of working from home at Zoom that the media proclaimed.

But what about the study that circulated a couple of weeks ago, that showed that working from home reduces productivity by 10 to 20 per cent? Sigh. The estimate comes from a paper by Stanford expert Nick Bloom, who summarised three studies on fully working from home. These studies say nothing about hybrid work, but conclude that for some jobs, working completely from home where there is no company office at all, is not always super productive. No surprises there. But how many companies are considering having no offices at all?

Read more: How has COVID changed the way we should collaborate and innovate?

Addressing concerns about productivity

Productivity is the major concern of the anti-hybrid work camp. During an event with CEOs in Sydney, I was asked a question about this. Australia is struggling with poor productivity growth. One of the CEOs stated that it was time to address the elephant in the room: hybrid working was leading to a national decline in productivity. “If we want to increase productivity, we need to bring people back to the office.” That was the consensus among business leaders in the room.

Let’s take a look at the countries that did see notable increases in productivity over the past three years: the United States and Canada. Now let’s see which countries had the highest increase in hybrid working over the past three years: yes, the United States and Canada. Before you start talking about correlation and causation, I admit one doesn’t necessarily have anything to do with the other. But if hybrid working effectively and substantially reduces productivity, as sceptics claim, the initial productivity growth would have needed to be huge. And the most notable productivity gains would likely not have happened in the countries with the most widespread adoption of hybrid working.

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One reason America might be better at hybrid working is that it might have a better management capacity to deal with new ways of working. Photo: Adobe Stock

Hybrid working requires different leadership

I suspect that one explanatory factor (and here I am treading on thin ice) is rather that America has a better management capacity to deal with new ways of working. Hybrid working requires different leadership. You have to focus on results and give people autonomy to achieve them. You must be willing to experiment, rethink and scale up quickly. 

For decades, one of the driving forces behind the difference in productivity growth between the US and other countries has been better management practices. Because some other countries do not like the American management style, this finding is met with resistance – but the empirical evidence is undeniable. US companies have a unique management capacity that drives productivity.

To be clear, I’m not saying that hybrid working is the explanatory factor for US productivity growth. But it shows that hybrid working is not the hindering factor that some like to make it out to be.

‘Does hybrid work or not?’ is the wrong question. Hybrid working has advantages and disadvantages. Accept that it is not black and white. I have regularly discussed the disadvantages in my writings. The question should not be: “Do we call all employees back to the office?” but instead: “How do I organise hybrid working in such a way that the disadvantages are overcome by the advantages?” Perhaps their management strength has given American companies a better formula to make hybrid working productive.