After experimenting with new ways of remote work during lockdown, 65% of European employers still expect staff to work primarily from the office post-vaccine. Despite successful technology transformation, many companies have preserved the in-office business ethos and are now struggling with cultural aspects like trust and effective teamwork when managing employees looking for a more flexible, hybrid work model.
COVID-19 has shown that many employees can work from home successfully, yet European managers fear a loss of control compared with pre-pandemic times. Reversing remote-working policies and promoting a back-to-the-office mentality is primarily driven by worries about lack of management oversight and visibility — if they are not in their chair, how do I know they are doing their work efficiently?
Staff see this differently. Many have enjoyed the greater freedom granted by working from home, with a sense of increased productivity primarily based on longer working hours. Employees working remotely are more engaged and have a stronger sense of well-being than those in non-remote jobs. At the same time many remote workers also admit to missing the water-cooler brainstorming sessions and other more social aspects of meeting colleagues in an office.
We predict that after returning to the office full-time post-vaccine at the behest of their employers, many employees will start to push for more flexible work arrangements, with models varying from one or two days per week at home, to ad hoc office appearances based on business needs or personal preferences.
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European business leaders need to acknowledge that remote work is not just a convenient short-term solution to ensure business continuity in a crisis — it will also become an integral part of our work/life balance in the not-too-distant future. Denying this inevitability can come at a high price for companies that continue to insist on a work ethics mindset stuck in an analogue world.
Reasons to Take Hybrid Work More Seriously
- Ignore hybrid and risk employee disengagement
- Digital skills need updating — a shift to hybrid is your starting point
- Increase productivity — hybrid is an opportunity for performance management change
- Time is up
Employee Disengagement — Flex Now or Fail
No longer considered merely an unquantifiable HR concept, “employee engagement” is now widely accepted as a key driver of motivation, commitment and productivity in the workplace, and the link between an engaged workforce and business success is recognised across industries.
Having developed a taste for the freedom offered by remote work, employees are unlikely to appreciate being asked to return to the office full time. Younger workers especially have a more value-based approach to work that is clearly centred around flexibility and well-being. Middle-aged employees appreciate the opportunity to manage child/parent care without feeling they must make an either-or choice between family and work. Staff with longer-term mental or physical health issues can remain valuable contributors if allowed to choose the place and time of their work commitments.
Now imagine a company asking its employees to return full time to the office post-vaccine. Some employees might choose to leave altogether (the “employee exodus” currently dominating media headlines), while others might choose to stay in their jobs. Unless they are fully on board with their company’s in-office strategy, however, the switch away from remote working will have a negative impact on productivity levels and profitability.
Employee Engagement Drives Performance
Crucially, employee engagement goes beyond the freedom to choose where to work or even when to work. However, offering work flexibility plays a key role in employee engagement levels. Employee engagement drives performance. This is because engaged employees clearly understand their role’s purpose and how they, as an individual contributor, fit in with their companies’ business objective. This results in better decision making.
Organisations with an engaged workforce tend to outperform their competitors. They have higher revenue streams and tend to recover more easily after a recession or a financial setback.
Employee Wellness and Mental Health Should be a Primary Focus
When it comes to a choice between fully-in-office or hybrid, European companies need to understand that sustainable hybrid work strategies need to go a long way beyond “laptop + VPN” approaches to also include successful cultural change management that includes employee wellness.
In a hybrid work model, badly organised communication channels, non-transparent project goals and burnout (caused by a poorly managed work/life balance) can all lead to disengaged employees and that is bad for the bottom line.
Closing the Digital Skills Gap — Redefine Your Baseline for Success
Europe is behind in overall digital skills levels and the Digital Economy and Society Index shows that 4 in 10 adults and every third person who works in Europe lacks basic digital skills. Most European organisations are also lacking a clear vision and strategic direction for their digital skills development and have retrograde assessments in place. Even in the middle of last year’s lockdown, with more than half the region’s workforce working from home, 23% of companies were worried that unfamiliarity with remote working technologies would negatively impact productivity, while 20% worried about employees’ competency in accessing relevant data.
A successful hybrid work model will fail without the right technologies underpinning it. Digital transformation needs to go beyond using consumer-grade collaboration tools for team meetings and should aim to make use of intelligent technology tools to manage human, financial and other resources. Closing the digital skills gap is critical for organisations to ensure they get the most benefit out of a flexible, hybrid work model that greatly depends on new, smart and above all connection-enhancing technologies for its successful implementation.
Opportunity for Change — Increase Productivity Based on Trust, NOT Keystroke Counts
COVID-19 has forced most countries into lockdown and there have been countless conversations around the globe on measuring productivity and performance for remote workers. Remote work clearly needs a different approach to staff management than onsite work. When managed poorly, remote work can dramatically erode not only engagement but also productivity.
According to IDC’s Future Enterprise Resiliency & Spending Survey from July 2021, 50% of European companies were continuing to use quality score productivity metrics to measure employee performance during the pandemic. 30% of businesses use (or plan to use) real-time analytics to measure team performance. Even worse, to retain visibility during lockdowns, monitoring technologies such as screen capture, measuring keystrokes, webcam photos and web monitoring are increasingly being used by employers to “prove” employees at home are meeting employer expectations.
The need to maintain an online presence to prove that employees are working is a main source of stress threatening employee well-being. This underlines the most important distinction between progressive and regressive performance management — the “why”. Are we doing it to identify individual employees’ strengths and areas of improvement, or are we doing it just as a routine exercise, so we can easily slot employees into different performance categories? What is the objective of performance management — is it meant to be transactional or transformational?
A growing sense of disconnection and frustration among remote employees is becoming apparent: videoconferencing may have gained traction as a tool to collaborate and stay in touch with members of one’s own team, but many workers feel their corporate culture has suffered. Eroding trust, lack of social cohesion and insufficient information sharing are the main sticking points in the world of remote work. Proactive plans for building trust and accountability within the workforce are needed, as well as a robust digital infrastructure to link individual employee productivity efforts to clearly defined strategic business outcomes.
While the responsibility of productivity and performance remains primarily with individual employees, that of providing an enabling culture solidly rests with their leaders and managers. The disparity and inconsistency in measuring employee performance that existed pre-COVID has only amplified post-COVID. In the face of COVID-19, remote work and the shift to a distributed workforce should be considered a once-in-a-lifetime opportunity for European managers to adjust discrepancies in leadership styles and belief systems about what employee performance is and how it needs to be measured to benefit the company as a whole.
According to our Resilience Survey, modern agile performance metrics such as reduced backlogs and speed of burndowns are only used by 22% of European companies, even though they offer great growth potential. We see an opportunity to improve business performance by adopting more outcome-based metrics that focus on the soft skills, such as upskilling and focusing on collaboration and innovation. Both qualitative and quantitative (operational) metrics are important and should be taken on board when deciding on future KPIs to measure remote employee productivity. Without this change in employee management, the shift towards a hybrid model is likely to become a costly, failed exercise.
Plan for Hybrid Work — The Time to Start Is Now
We predict that by 2024, 77% of office workers will work remotely two days a week or more. Businesses unable or unwilling to accommodate this trend will struggle to retain talent or will risk losing productivity.
Worryingly, over half of European companies that have started the transition to hybrid work are still unclear what is realistically achievable, and tend to stop at short-term, tactical technology implementations instead of connecting the dots for a truly holistic workplace transformation strategy.
Sustainable, holistic change does not happen overnight, and if the mad scramble for laptops and secure VPNs during lockdown has shown us anything, it’s that to be successful, workplace transformation needs to be carefully curated and planned for the long term — on both technical and business culture levels.
In our recent IDC Market Analysis Perspective, European Future of Work 2021, we explore strategies for holistic digital transformation in more detail, including the key areas of workspace, smart workplace, human-centric augmentation and people-first work culture. The document offers essential guidance for technology providers looking to identify growth opportunities in a market where almost all technology solutions will play a role addressing the needs of remote and hybrid employees.
To learn more about our upcoming research, please contact Meike Echerich, or head over to https://www.idc.com/eu and drop your details in the form on the top right.