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More than two years after most major markets lifted pandemic restrictions, the remote and flexible working boom they spurred remains a major trend: 88% of employers report a workforce that is at least partly hybrid, and 23% say their workforce is mostly or entirely hybrid (see figure 3 below). Furthermore, most employers continue to support flexible working, with solid majorities saying they have redefined core hours to accommodate remote work (63%) and have plans to evaluate employees based on productivity rather than hours worked (68%).

Yet despite the ubiquity of hybrid working, flexible working accommodations are less common than in 2021, with the shares of respondents adjusting core hours and planning productivity-based appraisals each dropping more than 15 percentage points.

Plans to let workers choose their hours, working environments and holidays have fared even worse, with the share of respondents pursuing these policies plummeting from 85% in 2021 to 43% today. HSF Partner Nick Wright notes, "In the UK, office attendance is becoming increasingly important to many employers, with some mandating a full-time return to the office and others making bonuses conditional upon minimum levels of office attendance."

Figure 3. How would you describe the way in which your organisation's employees currently work?

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Striking a balance

Employers are clearly pushing back on the intensely flexible working models necessitated by the pandemic, which many believe can discourage collaboration, limit mentorship and make it difficult to maintain a company culture. "A big issue we hear about is the stickiness of the culture and company loyalty," says Jumabhoy. "What makes staff feel connected to their employer if they're never around a physical premises or colleagues? The relationship becomes more transactional." Flexible arrangements might also be harming employees' prospects, as a clear majority of companies (71%) say those who work physically in the office will inevitably have more opportunities.

Employers' efforts to reclaim control over when and where work is performed are most visible in the push to return staff to the office. "As we've headed into economic headwinds, the pressure to get people back in the office has increased," says Doug Evans, General Counsel and Company Secretary at Hays. "It's seen as more productive – that's the logic."

While return-to-office policies have sparked activism at several major employers, including Amazon and Apple, economic anxiety and widespread Covid vaccine rollouts have given employers leverage to recall workers. Seventy-four percent of respondents say their employees are now working mostly or entirely in-person, and 70% say more work will be done in-person in the next two years (see figure 4 below). When even Zoom – whose software became synonymous with remote collaboration during the pandemic – is asking employees to return, the direction is clear.

The persistent popularity of hybrid working, however, is testament to the fact that some aspects of it perform well, even for employers. Half (49%) say it has improved access to far-flung talent, and 68% say it has boosted applicant diversity. "We were already looking at flexible working before the pandemic," says Nicola Doran, Managing Director and Head of Employment Law at Standard Chartered. "We recognise that the new generation has different expectations and doesn't want to be bound to the office from nine to five. If we weren't ahead of that, it would be a competitive disadvantage, and it would mean we couldn't access the best talent."

Furthermore, 53% of employers say forcing more in-office working would result in more activism and/or higher staff turnover. "If the job market gets better... you might see people moving to places where there's more flexibility," says Tyler Hendry, Senior Associate at HSF's New York arm. "For example, if companies that have been operating a hybrid model force people back in five days a week, people may start looking for other opportunities." The aim is to find a balance that maximises productivity and collaboration while providing enough flexibility to ensure a competitive position in the war for talent.

Figure 4. How, if at all, do you expect your employees to change how they work in the next two years?

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The risk of recall

For most employers looking to reduce or revoke flexible accommodations, their talent strategy will be their biggest consideration. Emma Röhsler, EMEA Head of HSF's Employment, Pensions and Incentives team, comments: "If you've shown you can do your job from home, there's quite a lot of pressure on the employer to have remote or teleworking policies in place, mainly for retention and attraction of candidates. If you want to attract certain candidates and create a workplace that is seen as respectful of employees, you have to do that."

Employers will also have to think carefully about their approach. New legislation in the UK will give all employees the right to request flexible accommodations from day one of the job rather than after six months and requires employers to provide a business reason if denying it. In most other jurisdictions, however, employers continue to have substantial discretion to determine arrangements appropriate for the role.

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Sticks and carrots

Employers are using both soft and hard tactics to recall employees, though most remain wary of overstepping. "In Australia, we're seeing a range of approaches for getting people back in the office. Some employers are still doing soft encouragement – such as team lunches on Wednesdays, team drinks, or extracurricular activities on certain days. Some are using more of a direct approach – you must be in the office on Wednesday, Thursday and Friday, for example. There's only a handful of organisations mandating a full return to the workplace" notes Gaspar.

Employers are also exploring options for influencing staff's working preferences through more formal incentivisation. Nearly half (47%) expect working remotely will become a privilege earned through trust and seniority and nearly as many (45%) have plans to differentiate pay between remote and in-office staff in the next three-to-five years.

Again, for most employers, the biggest risk is to their talent strategy: those who pay remote workers less than in-office colleagues set the stage for conflict with employees who feel they have been relegated to second-class status. And workers told they must wait months or years for the right to work from home may not stay long enough to earn the privilege.

There are also legal risks, especially given that many workers choose to work remotely due to caregiving responsibilities or disability. Employers will need to carefully consider if such policies risk discriminating against those with protected characteristics and ensure they are treated fairly, in the eyes of the workforce as well as the law. That could prove a tall order: "I don't see hybrid working becoming a performance incentive in the US," says Hendry. "It gets into a messy situation for accommodation requests and disability requests once you start picking and choosing. It can create potential discrimination claims and may create more problems than benefits."

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