This article by Laura Bougourd and Niamh Crotty, lawyers in Lewis Silkin LLP’s Real Estate and Employment practice, explore the extent to which Covid-19 has presented the opportunity for us to re-think the way we work long-term and the best way employers can prepare for a full transition to hybrid working.

INTRODUCTION

It seems inevitable now that hybrid working will be a reality for many over the coming months. One consequence of the Covid-19 pandemic has been the opportunity to re-think the way we work. Many employers are now busy strategising about how best to implement new ways of working on a mass scale for the longer-term. But what does “hybrid working” actually entail and what can businesses do to best prepare?

What is “hybrid working”?

When most people talk about a “hybrid model” of working, they mean a blend of office, remote and home working. But hybrid working also tends to encompass more flexibility in terms of when we work, as well as where we work and how we work. The hybrid working model generally provides more independence and flexibility to employees to fit their work around their personal lives. It is heralded by many as the best of both worlds providing structure and sociability on the one hand, and independence and flexibility on the other.

In our recent podcast interview with workplace strategist Neil Usher, he warns that the hybrid working model is “not a safe harbour” - we have no case studies or experience to draw on, beyond what we have learned during the pandemic. However, while the pandemic might be the impetus for change, our current experiences of working remotely aren’t necessarily indicative of what our experiences will be once restrictions lift and we return to some semblance of normality. For most organisations looking towards a new hybrid way of working, this will be unchartered territory and adopting an “experimental mindset” will be essential when testing these waters.

…and why is everyone talking about hybrid working?

In a nationwide study of employees who were working from home during the UK’s third national lockdown, IT services company Atlas Cloud found that almost 64% would prefer to return to a combination of home and office working post pandemic. Moreover, they found that almost half of office workers who completed their survey would look for a new job if their employer does not allow them to choose where they work after the pandemic has ended.  A study carried out by Dropbox with the Economist Intelligence Unit found that nearly half of tech sector staff and two-thirds of management don’t want to go back to the office full time when restrictions are lifted.

It certainly seems that hybrid working is the model of choice for employees and although patterns may vary, a common preference among employees is office working two or three days a week and remote working for the rest. Of course, a hybrid workforce might also mean that some employees work remotely full time, and others full time in the office. Nicholas Bloom, a Stanford University economics professor with expertise in remote work believes that two days remote work per week is the optimum pattern to balance collaborative and quiet work, while also benefiting from less stress from less commuting.

Why do employees want a hybrid working model?

One of the key advantages of remote working for employees is the time saved from no commuting and, consequently, an improved work/life balance. Increased flexibility and choice is also a popular benefit of remote working for employees, as well as cost savings. According to Atlas Cloud’s survey, office workers were spending an average of 5% of their salary each month on commuting to work. This means that although during the pandemic, the average employee in the UK spent £215.55 on their home workstation and nearly two in three (63%) reported an increase in their household bills as a result of working from home, office workers have saved an average of £1,268 whilst working from home between March 2020 and February 2021 (based on the average (after tax) salary of £30,420).

Why do employers want a hybrid working model?

Many organisations are keen to consider remote working models if it means that they can reduce their rental expenditure. However, while closing offices altogether may eliminate real estate costs, Workplaceless (an organisation which provides solutions to companies for more effective hybrid and remote environments) contend that “rethinking and downsizing offices to become centres for collaboration, client interactions, and team gatherings” (rather than closing offices altogether) can also have a positive impact on an organisation’s bottom line. Other benefits of the hybrid office for employers is the potential to decentralise the workplace giving access to a wider talent pool with more diverse backgrounds, experiences and opinions. As mentioned above, the hybrid working model is also likely to lead to increased employee satisfaction and wellbeing, which as we all know is ultimately good for business.

So, it seems like with the hybrid model of working everybody wins, right? Well, not necessarily...

Why hybrid working could spell trouble for companies

There are some potentially significant issues with hybrid working. Companies must consider these and develop a plan to address them.

Hybrid working could damage working relationships

According to Atlas Cloud’s survey, the number of employees who said they had an effective working relationship with their manager while working from home fell by 12% and those who said they had an effective working relationship with their colleagues fell by 13%. Most managers are inexperienced at managing and motivating teams remotely and hybrid teams of in-office and remote employees create even more complexities to manage. As Sid Sijbrandij, CEO of web development platform GitLab puts it, the hybrid environment “creates two fundamentally different employee experiences to manage”. The challenges of combining in-person and virtual meetings (where some of the team are physically present in the meeting room, and some are logged into video conferencing systems) can be solved in part using technology, but how do managers curtail side discussions from happening, often organically, once the remote employees are out of ear shot? This, coupled with poor communication and a perceived lack of trust, may lead to an actual or apparent proximity bias in favour of in-office workers.

Proximity bias or “presenteeism” is the incorrect assumption that people are more productive and do better work if they are physically present in the office where they can be seen doing their jobs. Before the pandemic, presenteeism was on the rise and, despite ONS statistics showing that 46.6% of employed people in the UK worked from home during April 2020, proximity bias is unlikely to be a problem of the past. A culture of presenteeism can result in remote workers being left out of decision making (also known as action bias) or being overlooked for promotions (also known as availability heuristic).  Employees may worry that those who choose to go back to the office will be viewed by management as more dedicated and hardworking compared to the people working remotely.  Under the hybrid working model an organisation’s head office is still likely to have a disproportionate share of power, and if management keep working from the head office this will undermine the hybrid working model, giving office regulars an edge over home workers. As a result, there is a risk of in-group and out-group dynamics developing in hybrid teams, between those in the office and those at home. Serial tech start up worker and author, Paul Boutin advises hybrid organisations to pay attention to build-ups of power and group-think among their in-office employees who may be reluctant to defer to colleagues who “aren’t in the room,” and whose at-home lifestyles they may resent.

Is hybrid working discriminatory?

Some commentators also worry about the impact of remote and hybrid working on women and minority groups, as the existing challenges of equality, inclusivity, and accessibility could be exacerbated by presenteeism and proximity bias. Sijbrandig wrote in Wired, “remote workers will find that they are not getting promoted at an equal rate, because they are less visible” and this could potentially magnify the gender gap, as women may be more likely to choose remote working to take on caring responsibilities in the home.

While flexibility is often acclaimed to be every employee’s ideal, as explained by Usher, a flexible working environment is not necessarily all upside. A lot more planning will be required to ensure that our flexible schedules fit in with everybody else’s. We currently don’t know what stress and anxiety this will cause for people, as some personalities prefer a fixed routine and may find it difficult to cope with constant changing of their work environment and schedules.

Office space and the hybrid working model

Another significant challenge created by hybrid working relates to office size and logistics: how much physical office space does a business need if employees are given greater freedom to work remotely on any given day? How can a business avoid its offices being rammed to the rafters on one day, but being a ghost town on the next? While employees will want to maintain as much flexibility in terms of their own individualised hybrid working schedule, employers are going to want to impose some kind of structure. Organisations which adopt the hybrid working model with the aim of reducing their property footprint may not have the space for employees to pick and choose when they want to attend the office and, at least for the time being, there will also be social distancing guidelines to implement.

As Usher points out, there are multiple different permutations to get the most beneficial use out of office space, and what is best for organisations will not necessarily be the best for employees. As we all now know, one of the main advantages and draws of the office over home working is socialising and collaborating with colleagues, as well as the supervision and mentoring of less experienced colleagues. As such, it will be in both the employees’ and employer’s interests to ensure that whole teams attend the office on the same days where possible. On the other hand, if team A always attends the office on certain days, and team B on the alternative days, then we risk creating silos and miss out on the serendipitous “water cooler” moments which inspire innovation and creativity.

Having a suitable home workspace will also continue to be a priority for employees in respect of the hybrid working model (as discussed in our previous article) and an important consideration for hybrid organisations. While many employees invested in their workstations during the pandemic, plenty have also moved to locations outside of expensive urban centres, so that they can have more space to live and work. However, with the hybrid working model, employees will need to live within commutable distance of the office, meaning for many a return to cramped, city-based living. Employers in the UK and Ireland are under an obligation to provide a safe and healthy working environment including remote workplaces and this will need to be borne in mind when rolling out any hybrid or remote working policies.

Ultimately there is no one-size-fits-all approach and the position may be uncertain for a while to come. Indeed, while some might want to rush back to the office when restrictions ease further, others are likely to be more cautious, and so it may take a while for working patterns to settle down into a “new normal”.

How to implement hybrid working

These potential problems can be overcome to make hybrid working a success. In this section, we explain what employers can do to successfully move towards a more hybrid workforce.

Flexi-leases

The uncertain scenario we currently find ourselves in won’t help employers plan with much confidence. Lease flexibility for office space is likely to be increasingly important for businesses going forward, although it is likely to come at a cost. Some features of such lease flexibility might be early termination rights, wider subletting and sharing rights, pre-emption rights if extra space comes available, and shorter contractual terms. After all, in an envisaged hybrid workplace, the ability to resize up or down to suit changing demands and working styles, or even the ability to simply reconfigure existing space quickly, will be more important than ever. Either way, if enough businesses do look to invest in flexible premises to help make a hybrid model work more effectively, we may well see a longer-term shift away from traditional leasing models, where flexi-premises become the norm.

Take small steps and experiment with hybrid working

However, any such shifts will not happen overnight and perhaps it is more likely, in the short-term at least, that businesses will simply need to work with the space (and the lease terms) that they have now. Indeed, in his podcast interview, Neil Usher explains that most offices will not have been stripped out and remodelled since the pandemic began and so it is unlikely that employees will be going back to anything radically new. It will, therefore, be difficult to try and impose a new way of working on an old office set-up. Instead Usher advises businesses to start with small changes and to approach the hybrid working model with an experimental mindset. As discussed in our previous article, there will undoubtedly be an increased focus on sustainability and well-being when designing the office of the future. These were central themes in our Future of Work discussion series last summer in collaboration with the RSA and the hybrid working model gives organisations the perfect opportunity to make real progress in these areas.

Using alternative spaces to bridge gaps

One option for businesses to help ease the transition into the hybrid working era is to consider the use of alternative “third spaces”, such as hotel-based serviced offices, networking cafes and even pop-up office pods in shopping centres. For example, employees could be given memberships or allowances to use “drop-in” offices or similar offerings in regional areas, with the benefit of reducing both staff numbers at the main office and commuting times, whilst also providing a solution for those who would prefer not to work at home or those who do not have adequate home office spaces. This type of flexible hub arrangement is already being offered to some civil service staff and it may well prove increasingly popular as more hybrid workplace options, including repurposed retail units, come to the market in the coming months.

Technology to manage space

However, perhaps one of the most important ways in which businesses can navigate the move to a hybrid working model is through the use of technology. Indeed, there are various software products on the market which promote themselves as being helpful in facilitating a safe and effective return to the office, and in managing the use of office space on a day-to-day basis. For example, mobile apps can now be used to manage desk and room bookings, reserve car parking and locker spaces, monitor footfall and check that the office ventilation system is working properly. Neil Usher explores this idea further in the podcast when he explains that we are also likely to see artificial intelligence being used soon to solve space issues within workplaces, to manage schedules for hybrid working and to plan anticipated office space requirements.

Technology to manage teams

The use of such technology may also help organise our hybrid working lives more efficiently, particularly as we learn to balance the mix of office working and home working on a scale never seen before. After all, with the greater flexibility of hybrid working comes the need for more forward-planning and communication with colleagues, and the use of technology could help reduce the time and effort this involves. For example, technology apps could help predict where colleagues are likely to be working on any given day and help manage the different permutations of people coming into the office each week (as discussed above) – whether it be reserving certain desks to ensure relevant teams, or supervisors and trainees, sit together, or suggesting the best days to go into the office based on other people’s bookings. This in turn could help alleviate any uncertainty brought about by the hybrid working model and help bring transparency to the new way of working.

Communication is key to making hybrid working a success

Clear channels of communication, regular feedback loops and training for managers may help alleviate problems caused by proximity bias and lack of supervision. For the hybrid working model to be truly successful, managers must lead from the top down and should be encouraged to model the new way of working, for example, by taking meetings from home. Organisations should evaluate their current mechanisms for assessing performance to ensure that output and results are rewarded, instead of attendance at the office.

Anita Williams Woolley who researches organisational behaviour and theory at Carnegie Mellon University recommends that hybrid teams conduct group meetings as if everybody is working remotely i.e. everyone on their own device. “That way everyone can be seen and heard, so you don’t have the distant conference table with the fuzzy faces,” she explains. “It cuts down on the side conversations, and it forces all of the communication to be much more explicit.”

In addition, communication will be key in helping managers pick up early signs of stress, and improve well-being, within their teams, particularly as hybrid timetables evolve. One of the strategies identified by the Chartered Institute of Personnel and Development’s report into effective hybrid working is for employers to encourage boundary setting by their employees, and so it will be more important than ever for managers to check-in regularly and ensure that work/life balances are being maintained. Indeed, CIPD’s report suggests that we should regard routine-setting and work/life boundary management as a basic life skill, which needs to be learned and practised, just like brushing our teeth. In the UK, a House of Lords Select Committee on Covid-19 has recently called on the government to consider a right to switch off. A “right to disconnect” already exists in a number of EU jurisdictions and most recently, the Irish government has published a Code of Practice which recognises the importance of creating a culture in which employees feel that they can disconnect from work and work-related devices and communication. The Code also highlights the obligations on employees to ensure that they are managing their own working time and to be mindful of their colleagues’ right to disconnect. These types of skills will, after all, be increasingly important to master if we are to succeed in juggling the demands of the new hybrid working era.

Conclusion – Is hybrid working here to stay?

Hybrid working is a much more complicated way of working for employers and employees alike. With everybody working in different patterns and in different locations, there are likely to be a myriad of issues to overcome as hybrid working is used more widely.

But no model of working is perfect; Usher points out that there have been 14 work styles in the last 100 years, yet there has never been an undisputed best workplace model. As we have explored, there are certainly many potential benefits to be found by climbing on board the hybrid working train. Inevitably, there will be some trial and error, some testing and remodelling, as the office world re-opens again, but the use of technology and clear lines of communication should help prevent hybrid working from being logistically chaotic. For now, it seems that, one way or the other, the hybrid working model is coming. Hopefully it will allow us to enjoy the best of all worlds.

Laura Bougourd and Niamh Crotty are lawyers in Lewis Silkin LLP’s Real Estate and Employment practice.