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Hybrid working: a rocky path to the future

Author: ICAEW Insights

Published: 28 Sep 2021

A significant proportion of global leaders are confident that life will return to normal over the next 12 months. But recent data suggests that transformation may be thrust upon them.

According to the most recent KPMG CEO Outlook Pulse Survey, CEOs are split over the extent of long-term change – 24% say their business has changed forever, but 31% predict a complete return to normal later this year.

Businesses are also backing off downsizing office space. In 2020, 69% of CEOs said they’d reduce their office footprint. In 2021, just 17% of CEOs said the same. Just under a third (30%) said they would have most employees working remotely for two-to-three days a week.

The workforce, however, sees things differently. Consultancy firm Gartner recently surveyed 4,000 employees about their views on hybrid working. This research suggests that CEOs may be wrong to think a complete return to normal is possible.

There is a disconnect, for example, between what CEOs and employees view as flexible working. While 75% of executive leaders surveyed by Gartner believe they already operate a flexible culture, just 57% of employees agree. The same number of leaders believe their organisation understands how flexible working patterns support employees, but only half of employees agree.

To put it bluntly, executive leaders have more freedom to work flexibly than their staff. They are better equipped to work remotely than employees are, according to Gartner. It’s not a surprise that trust in senior leadership is low – 41% of employees believed that senior leadership acts in their best interest.

According to a report by McKinsey, employers are underestimating how big this disconnect is. As outlined by the KPMG survey, they are confident of a quick return to normal. This false optimism is driving a mass exodus of employees: 40% of workers around the world are considering leaving their jobs before the end of the year.

“Employees are the key driver to change and, while many organisations may prefer to go back to business as usual, attracting and retaining talent is going to require a more flexible approach,” says Kirstin Gillon, Technical Manager for ICAEW’s Tech Faculty.

Employers and employees don’t know exactly what they want the future to look like, but employees certainly want flexible working in some form or another. Post-pandemic, the number of employees wanting a hybrid working approach increased from 30% to 52%, according to McKinsey.

Overall, this points to a more complex, uncertain and experimental period. CEOs, CFOs and the wider C-suite need to accept that they don’t have the answers, start listening to their staff, and accept that this change will take time and testing to get right.

It could take years to get a hybrid working model right. Organisations will need to fail fast, collaborate, and be willing to throw everything away and rebuild their working culture from scratch. It may be necessary to attract and keep the best talent. If one organisation doesn’t go hybrid, you can guarantee that their competitors will.

Leaders need to find new etiquette around blended meetings, when some people are in the office and others are online. Mixing the two is not easy and will require new thinking. It links to the risks of a two-tier approach to people development, where those who are in the office getting more benefits than those at home, purely on the merit of being more visible. How we ensure equity for all staff is one of the major questions of hybrid working.

Organisations will need to develop clear strategies around what tools to use, especially as more and more tools will appear in this space over time. Balancing a manageable portfolio with the need to connect easily with others will require ongoing effort.

“While the pandemic has been hugely challenging, it has at least meant most people have been in the same boat, working at home,” says Gillon. “Shifting permanently to hybrid working will create enormous complexity in terms of logistics and culture as organisations try to blend people physically in the office and those online.”

Moving to a more digital workplace will create opportunities – better insights using data analytics, improved decision making, new skills and talent – but it also comes with challenges. There are new cyber security risks to address. Questions about people management and employee monitoring to answer. Creating a culture that allows for productive self-management can be tricky.

 “Technology is undoubtedly a key enabler here, but it also blurs the boundary between the personal and the professional,” says Gillon. “Should employers be looking at your home wi-fi password to make sure it’s adequate? If you’re using personal devices, what constitutes acceptable monitoring by an employer? It raises some really tricky questions that will need careful consideration in terms of what’s possible legally, ethically and practically.”

There are lessons to learn from others’ experiments, however. Some pioneers have a head start and know where the critical considerations and complexities lie. This includes an organisation’s approach to the finance function – working remotely has already pushed much of the function onto the cloud, and provided teams with deeper, real-time data to work with.

Our series on hybrid working and the future of work takes a closer look at some of the issues and opportunities that arise in the emerging hybrid workplace, and how that might develop in the longer term. We offer advice on how to avoid the pitfalls, and examples of how to manage transformation the right way.

Insights special: Hybrid working

Moving to a more digital workplace will create opportunities – better insights using data analytics, improved decision making, new skills and talent – but it also comes with challenges. ICAEW Insights takes a closer look.

Insights special: Hybrid working and the future of work

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