The revolutionary change in working arrangements caused by the pandemic has been relatively successful, with significant shifts in the percentage of employees working from home and changes to rosters and hours worked.
The Australian Bureau of Statistics (ABS) reported that by September 2020, 50% of the Australian workforce were working from home (WFH). It’s amazing to think back just four years ago to 2016, this WFH percentage of was just 4.7%.
According to social analyst @markmcrindle, on the back the rapid and seemingly smooth changes to work arrangements, 62% of Australians are looking to work in the future both from home and the workplace, in other words hybrid work arrangements.
A recent multi-national survey1 58% of c-suite executives reported individual productivity increased during COVID-19 and 49% of the executives also reported team productivity improvements.
This survey also found that while nine out of ten executives envisage a future with hybrid working arrangements, 68% have either no detailed plan or have not communicated a plan yet.
The key questions for business leaders as the effects of the pandemic are:
· How sustainable are the productivity gains associated with WFH or hybrid work?
· How can we bank and grow productivity gains?
The Australian Fair Work Ombudsman (FWO) has taken the position that post-pandemic employees may seek continued or additional flexibility to “reduce commute time, manage health risks and meet family and other commitments”, and that “best practice employers should give their employees flexibility where possible to help them balance their work and personal lives”. The FWO argues that the benefits of flexible working include lower levels of work-related stress, lower absenteeism, greater job satisfaction, increased attraction and retention of talent and greater productivity.
The last benefit cited by the FWO aligns with the productivity observations of the C-suite executives.
However, what has also become apparent during the pandemic is that while productivity may have increased, so too has employee anxiety and burnout2 both of which undermine work performance, and contradict other benefits detailed by the FWO.
Conservatively, about half of employees surveyed2 indicated that they were experiencing a form of burnout. People who were anxious due to a lack of organisational commitment were three times more likely to report symptoms of burnout.
It is worth keeping in mind that loss of productivity due to poor mental health, including anxiety might be as high as US1 trillion.2 In Australia, productivity impact of mental illness, including anxiety, as estimated by the Productivity Commission is AUD220billion per annum. The recent productivity gains made could easily be overtaken by losses if mental health is not addressed.
One of the contributing factors of raised employee anxiety and burnout2 during the pandemic is the lack of clarity about the future work arrangements including company guidelines, policies, expectations, approaches and communication about these.
The hesitancy for companies to engage in planning and communication around flexible working, including hybrid work, is not helped by the fact that industry is operating in unknown and still active pandemic territory, regardless of the level of business continuity or resilience planning done.
Further, employers have been forced to work outside the normal legislative framework with employment contracts and relevant legislation effectively overridden or suspended by government national and state of emergency powers. While necessary, the side-effect has been to introduce ambiguity to the employer-employee relationship. Leaders I have spoken with are nervous to engage in planning any sort of return to the workplace and are waiting for others to take the plunge.
One thing is for sure, as we move past the pandemic, it is highly unlikely that companies will return to 2016 WFH levels of under five percent. Enabled by technology, employee choice about workplace – and time – will normalise in the coming years. Revolution will shift to evolution.
Companies who redesign how work is done, develop fair and inclusive policies and clearly communicate employee and team expectations will not only improve mental health outcomes for employees, but will also continue improving productivity and will emerge stronger in the competition for talent.
Six Steps for Leaders
1. Start the conversation at executive and Board levels - now is the time. Establish goals, objectives and scope of review of future working arrangement models including hybrid working.
2. Set up a team with the accountability to analyse how the work is done and the potential impact of work arrangement changes on productivity and costs. Include streamlined and automated processes, reshaped responsibilities and structure, technology and facilities costs, risk and legal assessment and measurable KPIs.
3. Understand your employees – who they are, where they live, their work arrangement preferences and what they value.
4. Align your policies, contracts and remuneration with new work arrangements. Make sure these are fair and inclusive.
5. Train leaders and employees to operate successfully in new working arrangements. Traditional leadership styles are less effective in dispersed teams. This will mean looking at leadership capabilities.
6. Review and refine your approach. We are in unchartered territory, and everyone is learning and will make mistakes. The best thing you can do is own what hasn’t worked and work to fix it quickly.
1. McKinsey, May 17 2021.
2. McKinsey, April 1 2021.