Hybrid Work: Does It Impact Attrition?

Whenever I have asked anyone working in one about it, the answer has always been some form of—"love it, wouldn't have it any other way".

In fact one of the most consistent findings of research on the Future of Work (such as the Future Forum, Microsoft Workplace Trends, Stanford etc.) has been just how much employees LOVE flexibility in when and where they work.

So now we finally have a really well designed study from Stanford University (Prof. Nick Bloom ) that looks at the nuances of how hybrid work impacts employees.

(On a personal note, I just love well designed studies. Suddenly I discover something nuanced about what we do, often without thought, each day).

One of the reasons I like this study is that it was designed as a randomised experimental trial. Such studies are rare in organisational research. Few organisations will give you that kind of space.

On the other hand, these give us findings we can be most confident about.

The Study Design

Over 1600 employees in a large technology company participated in this 6 month long experiment. They were divided into two groups. The 'control group' continued with business as usual. And the 'treatment group' worked in a hybrid format. This mean work from home (WFH) on Wednesdays and Fridays.

After 6 months, the two groups were compared for their productivity, attrition, work rhythm, satisfaction etc.

What follows are 4 findings that I feel can be very useful for leaders designing Hybrid work.

1.Hybrid Working Reduces Attrition.

Several studies have shown that employees like to work for organisations which offer flexibility. Yet it's been hard to necessarily place a number on it.

Well in this case, we can.

And the number is 33%.

That is huge!

On an average, the group that worked in a hybrid work arrangement had 33% lower attrition than the other control group.

Flexibility allows them to organise their lives around simple things like picking up kids from school, doctors visits, a quick nap etc. This natural flow of a work day at home allowed the to integrate many parts of our lives that are otherwise much harder to do.

Through Covid, so many of us experienced just this ease. Well it still matters.

The second reason many preferred WFH days was the shorter commute.

Let's face it. Few of us enjoy long commutes. And unless we are traveling in comfort, just the act of getting to work is its own kind of work.

So perhaps unsurprisingly, working in a hybrid arrangement was particularly valued by those with longer commutes.

For those with a commute greater than 1.5 hours--attrition halved!

2. Hybrid Lowered Attrition Even More For Women.

As stereotypical as it sounds, women are still carrying the brunt of managing home and family. And this is simply easier to do with some flexibility. So if you look at the impact of hybrid work on attrition in women--well the results are stark.

Attrition for women in the hybrid work group more than halved. It fell from 9.2 to 4.2.

This made hybrid women's group the most sticky of all groups.

This finding has several implications for organisations that are serious about DEI efforts.

Offering hybrid work arrangements can go a long way in keeping women. Yet when it is a possibility offered 'just for women', it can hurt their promotability, as men working from office 5 days are often seen as more sincere candidates.

This is exactly why hybrid works best when it is not for one group, but for everyone.

3. Managers Fear Hybrid More Than Non-Managers.

This is so interesting to me.

At the start of the experiment, all participants were asked “What is your expectation for the impact of hybrid working from home on your productivity?”

As you can see, managers expected productivity to fall at the start of the experiment. Six months later, they had changed their view to an overall (mild) positive.

Several managers don't have as much faith in their abilities to manage their teams remotely or in a hybrid setting. It takes data and time for them to realise the potential of hybrid. In this study that time was about 6 months.

As a result, managers had a higher rate of attrition through the experiment than non-managers.

This is so interesting, because it suggests that when introducing hybrid work, one key step is enabling managers to have confidence in hybrid as a way of work

Non-managers on the other hand started out more positive about the impact of hybrid work on productivity, and this confidence improved over time.

So how 'real' were managers fears around productivity?

Well, there was little impact on productivity as measured either by lines of code or performance ratings.

Those who worked in hybrid did change their work rhythm, working fewer hours on days they worked from home, yet longer hours on the days they worked from office.

Interestingly, those who worked in hybrid, sent far more messages and emails to others throughout the week. Both during the work week and on weekends.

Those in the hybrid work group were far more 'available' digitally to others.

And,

Those who worked in a hybrid work arrangement, took fewer days off from work.

How many? An average of 15%!

One can suppose this is because they were able to manage many of their non-work obligations during the days they were able to work from home. Similar employees who worked from office needed to take days off from work to manage these.

So despite fears of a 'loss of productivity' in the management ranks, in fact those who worked hybrid, were often (just) slightly more productive than those who did not have access to flexible work.

Which brings me to the final take-away for me personally.

4. Employees Still Hesitate to Take Up Flexible Work And Managers Are Still Suspicious of It.

Despite their own strong personal desire for flexibility, and their own personal belief that productivity will not suffer if they work remotely, employees hesitate to 'opt-in' for flexible work options because they fear this will impact their managers assessment of their ambition and sincerity.

This is of course not at all surprising if managers do not have enough faith in hybrid.

Conversations with business leaders over the past several months confirms this finding. Several leaders are extremely wary of 'allowing WFH' despite the Covid experience.

A recent seminar organised by MIT's Sloan School, pointed to this phenomenon as 'Leadership Nostalgia'.

So where does the answer to future work arrangements belong?

I fully realise how risky making predictions always is. Yet, I am going to put my neck out here.

Organisations that are able to do hybrid confidently will attract better talent than those who are suspicious. This is because, employee expectations have fundamentally changed. As a new generation enters the workforce, their expectations they want to be managed by outcomes. Hybrid work allows enough days in office to allay concerns over organisational culture and social capital

I think over time, managers (and leaders) will begin to be less anxious about hybrid. We will begin to teach 'virtual management' as a parallel track of practices that will enable this.

These shifts may be far stronger in newer 'digital first' organisations. But eventually, they will move to others.

But then again, I could be completely wrong.

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(About me: I lead Unqbe, a think-tank and advisory firm around building future organisations. We track change through commissioned and primary research. We help leadership teams build Workplace 2.0 with a current focus on building level 3 cultures; building future-ready competencies; and future-oriented people practices.)