Person working in an office
With 74% of US companies transitioning to a permanent hybrid model, executives are turning their attention to measuring the success of their hybrid work model. That’s because there’s only a single traditional office-focused model of the MF 9-5 in the office, but plenty of ways to do hybrid work. What works well for one company’s culture and work style may not work well elsewhere, even within the same industry. So how should a leader judge whether the model they have chosen is optimal for the needs of their organization or whether it needs refinement?
The first step is to establish clear success metrics. Unfortunately, relatively few companies measure important aspects of hybrid work transition. A new report by Omdia, for example, finds that 54% of companies find productivity has improved by adopting a more hybrid workstyle, but only 22% of companies have established metrics to quantify productivity improvements from hybrid work.
As the saying goes, “What is measured is managed.” It’s important to remember the full adage: “What is measured is managed—even when it’s pointless to measure and manage, and even if it harms the purpose of the organization to do so.” The second part of the saying points to the importance of carefully selected metrics that are both meaningful to the organization’s success and effectively measurable, ideally quantitative and objective, but also qualitative when necessary and subjective.
Hybrid work is a strategic choice
From my experience of helping 21 organizations transition to hybrid work, it is important that the entire C-suite is actively involved in formulating the metrics and that the board approves them. Too often, busy executives have a natural tendency to throw it in the lap of HR and let them figure it out.
This is a mistake. The transition to a permanently hybrid working model is a strategic decision for the long-term future of the company. It requires an appropriate level of attention and care at the highest levels of an organization. Otherwise, the C-suite will become uncoordinated and disagree on what counts as a “success” in hybrid work, and find themselves in a mess six months into their transition to hybrid work.
It’s a best practice for the C-Suite to determine the metrics in an off-site location where they can distance themselves from the daily hustle and make long-term strategic decisions. Before going offsite, it makes sense to evaluate initial metrics, including a baseline of quantitative and objective metrics, as well as conduct a thorough survey and some focus group interviews with employees and middle managers to assess subjective and qualitative metrics. While there is plenty of external data on hybrid work preferences, each organization has a unique culture, systems and processes, and talent. As such, the C-suite will find internal data very useful in its decision-making outside of the organization.
Which success metrics are important in the transition to the hybrid world of work?
Based on my clients’ experiences, companies focus on a variety of success metrics, each of which can be more or less important. Each of these metrics should be measured before establishing a permanent hybrid work policy to establish a baseline. The metrics must then be evaluated quarterly to assess the impact of refinements on the hybrid work policy.
Customer retention provides a clearly measurable measure of hard success that is both quantitative and objective. A related metric, Recruitment, is a softer metric: it’s harder to measure and more qualitative. External benchmarks definitely show that offering more remote work makes both retention and hiring easier. For example, a survey of 1,000 HR leaders found that 95% of respondents believe offering hybrid work is important for recruiting, and 60% believe hybrid work drives employee retention. And in a report by Owl Labs that surveyed 2,300 full-time workers in the US, 52% said they would be willing to take a pay cut of 5% or more to choose where to work.
Therefore, if the C-Suite decides to adopt a more flexible policy, I encourage my clients to post it on their Join Us website, as does one of my clients, the University of Southern California Information Sciences Institute. Human resources will inevitably find themselves receiving an increase in inquiries from job applicants relating to this policy, as well as from potential employees who show enthusiasm for it in interviews. This enthusiasm is something that can be measured.
A key metric, performance, can be harder or easier to measure depending on the nature of the work. For example, a study published in the National Bureau of Economic Review reported a randomized control study that compared the performance of software developers assigned to a hybrid schedule versus an office-centric schedule. Engineers working in a hybrid model wrote 8% more code over a six-month period. Writing code is a standardized and objective measure of productivity, and provides strong evidence of higher productivity when working remotely, at least partially. If such a clear measurement of performance is not possible, use regular weekly performance reviews by managers. However, avoid software tracking programs because the Owl Labs report finds that 45% of employees feel stressed by them.
Collaboration and innovation are critical metrics for effective team performance, but measuring them is not easy. To evaluate them, you need to rely on more qualitative assessments from team leaders and team members. Additionally, you can improve these metrics by training teams in effective hybrid innovation and collaboration techniques.
Several hard-to-measure metrics are important to an organization’s culture and talent management: Morale, Engagement, Wellbeing, Happiness, Burnout, Quit Propensity, and Quiet Quiet. For example, the Owl Labs report shows that 46% of employees would quit if forced to go back to the office full-time, meaning they would do whatever it takes to avoid being fired. To arrive at these metrics, more qualitative and subjective approaches must be used, e.g. B. Custom surveys specifically adapted to hybrid and remote work policies. As part of the survey, it is helpful to ask respondents to choose to participate in focus groups on these topics. Then, in the focus groups, you can delve deeper into the survey questions and examine people’s underlying feelings and motivations.
One way to get to wellness and burnout involves a hard metric: employees who are ill. By measuring how that changes over time – seasonally adjusted – you can assess the impact of your policies on the mental and physical health of your employees.
Diversity, equity and inclusion represents an often overlooked but extremely important metric influenced by hybrid work. We know underrepresented groups prefer more remote work. As a result, my clients who opted for a primarily office-centric schedule have had to invest significant resources in improving their DEI to offset the inevitable loss of underrepresented talent.
Measuring DEI is quite easy and objective: look at the retention of underrepresented humble workers and executives while implementing the hybrid work strategy. Also, make sure your surveys allow employees to self-identify relevant demographic categories so you can measure DEI in terms of engagement, morale, etc.
Last but not least, my clients also consider professional and leadership development, as well as the onboarding and integration of junior team members. A Conference Board survey found that 58% of employees would leave the company without adequate professional development, and this is even more true for underrepresented groups. Leadership development is critical to the long-term survival of any organization. And the onboarding and integration of junior staff is a prerequisite for success. However, most organizations struggle to figure out how to do them well in a hybrid environment.
Measuring professional development is best done with more subjective tools such as surveys and focus groups. They can also assess how much employees are improving in the areas in which they have received professional training and compare modalities for delivering on-site versus remote learning. Assessing leadership development is simpler and more quantitative and objective. Measure the success of your newly promoted leaders with performance appraisals and 360 degree reviews. Onboarding and onboarding new employees includes performance reviews by managers and measurements of their productivity.
Conclusion
Once you have the baseline data from these various metrics, the C-suite needs to externally determine which metrics are most important to your business. Select the three to five most important metrics and weight their importance in relation to each other. Using these metrics, the C-suite can then decide on an approach to hybrid work that is best optimized for the desired outcomes. Next, establish an action plan to implement this new policy, including using appropriate metrics to measure success. When implementing the policy, if you find that the metrics aren’t performing as well as you would like, revise the policy and see how this revision affects your metrics. Also, consider running experiments to compare alternative versions of the hybrid policy. For example, you can spend one day a week in one place and two days another in the office and assess how that affects your metrics. Review and revise your approach monthly for the first three months and quarterly thereafter. My clients have found this approach to be the most effective in achieving the metrics they have set for their permanent hybrid model.
