Hybrid work is entering the 'trough of disillusionment'

Hybrid work is entering the 'trough of disillusionment'

As more organisations, including governments, call employees back to the office at least part of the workweek, the love affair with remote and hybrid work may be cooling off.

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Remote work, once praised as the new paradigm for productivity and employee satisfaction, is losing some steam as more organisations and even governments are requiring workers to return to the office — at least, part time.

Bosses are imposing more strict in-office mandates as new data from the US Bureau of Labor Statistics (BLS) shows productivity has slumped slightly since the end of the COVID-19 pandemic emergency was declared earlier this year.

“Over the previous 12 months, the number of employees working in a hybrid way has steadily increased, while the number of employees who work only at home or only in the office has decreased,” said Tori Paulman, a Gartner research analyst. “Hybrid Work is entering the trough of disillusionment for everyone.”

Gartner Research breaks down new products and industry trends into “hype cycles” that set the expectation that most innovations, services, and disciplines will progress through a pattern of hype, adoption, disillusionment and eventually productivity.

The "trough of disillusionment" represents a time when the original excitement about potential value of a product or business practice encounters problems with performance, which leads to missed expectations. For hybrid and remote work, the ongoing polarisation of views on where work is best done and uncertain returns on investment in the corporate space have forced hybrid work to descend into the trough, according to Gartner.

“Most hybrid work practices were implemented in haste in 2020/2021, and technology and management strategies from location-centric work do not work well in a hybrid world,” Paulman said. “Patchwork and piecemeal approaches are limiting the effectiveness of the leadership strategies and technology categories that will help make hybrid work successful. The mess we’re in right now makes sense if we understand how hype works.”

Even though remote and hybrid work practices are in the trough now, that doesn’t mean they’ll stay there. Some early adopters eventually overcome the initial hurdles and begin to see the benefits of innovation and best practices emerge.

Until then, the return-to-office edicts continue to roll out.

Most recently, US President Joe Biden told his Cabinet members to get federal employees back into the office more often beginning this fall, according to a White House email. “That’s consistent with what we are seeing across most industries and regions,” Paulman said.

For example, the Federal Aviation Administration (FAA) now reportedly expects workers will return to the office three days per week starting on Oct 9; the US Department of Transportation has the same expectation set for Sept 10.

A series of high-profile companies have also adjusted their remote or hybrid work policies. Ironically, the latest to do that was videoconferencing vendor Zoom, which just updated its hybrid work policy to require any employee within 50 miles of an office to commute in at least twice a week.

Earlier this year, Google updated its hybrid work policy requiring most employees be in an office at least three days a week. And at least one report indicated that in June Facebook owner Meta revamped its hybrid work policy, mirroring Google’s.

Even with an uptick in return-to-office mandates, office building occupancy continues to remain below pre-pandemic levels. The average weekly occupancy rate for 10 metropolitan areas in the United States this week was below 50 per cent (48.6 per cent), according to data tracked by workplace data company Kastle Systems. That occupancy rate is actually down 0.6 per cent from last week.

Office occupancy rates change substantially, depending on the day of the week. Tuesdays, Wednesdays and Thursday are the most popular in-office days.

Globally and in the US, organisations have moved from ad hoc hybrid work policies, where employees could pick their days in the office, to structured schedules. On average, workers are required to be in the office 2.6 days per week, according to Robin Powered, a vendor of software that enables employees to book office desk time.

“Most people will say Fridays are dead unless you have some direct, customer-facing role that requires you to be in five days a week,” Micah Remley, CEO of Robin Powered, said in a recent interview. “Five days a week in the office is out. The new full time in the office is four days in the office.”

Increasingly, executives are pointing to remote work as a potential culprit for lagging productivity. Over the past two years, productivity has declined 1.9 per cent, according to the BLS, “the sharpest two-year decline in over 75 years of recorded data.”

Studies have shown that most bosses feel remote work hurts worker productivity. A survey of 20,000 people in 11 countries by Microsoft earlier this year found that 85 per cent of business leaders believe the shift to hybrid work has made it harder for them to have confidence employees are being productive.

For some, hybrid work also hurts the real estate market, since fewer companies are renewing leases or buying office property.

In January, Washington, DC Mayor Muriel Bowser stated: “The federal government represents one quarter of DC’s pre-pandemic jobs and owns or leases one third of DC’s office space. We need decisive action by the White House to either get most federal workers back to the office most of the time or to realign their vast property holdings for use by the local government, by non-profits, by businesses and by any user willing to revitalise it.

Gartner’s Paulman said in some ways what’s most remarkable is the significant shift away from a fiscal priority of previous administrations to reduce the overall footprint of real estate the US government uses to fill the buildings with workers. “Some financial analysts are predicting seismic shifts in the corporate real estate market, which appears to be, at least in part, lurking below the surface of [Biden’s back-to-office] directive,” he said.

In the end, edicts don’t go over well with workers, especially at a time when unemployment is near record lows and finding talent has rarely been harder.

For an example of what results from a government order to return to office, Paulman said the US need look no further than its neighbor to the north. In January 2023, the Canadian government issued a mandate that required public servants to work from the office two to three days per week and to ramp up to more in-person work over time.

Shortly after, the Professional Institute of Public Service (PIPSC) revealed in a survey that more than a one-third of Canadian public servants were considering leaving their jobs over the return-to-office mandate. And in May, 120,000 Canadian public servants went on a two-week long strike over pay and hybrid work conditions.

“The outcome of the strike was remarkable to me as an analyst: ‘a requirement that managers assess remote work requests individually, not by group, and provide written responses to hold them accountable for the decisions they make in each case," Paulman said.

“From my perspective, the impact of union employees and collective bargaining rights won workers continued flexibility as the process for assessing remote work is not as scalable as before,” he added. “I wouldn’t be surprised if we see something similar play out in the US.”

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