The debate on whether to embrace a hybrid working model is one that comes with a sea of strong opinions. It’s a decision being debated by executives across the nation as workspaces reopen and companies struggle with sometimes conflicting recommendations from government agencies. There are certainly both risks and advantages to such a model, but a one-size-fits-all approach it is not, and the advantages are hardly universal. A hybrid situation excludes a large pool of workers, such as factory employees, those in the service industry, and medical professionals, to name a few. Employees in these sectors don’t have a choice about hybrid work—they must be physically on site to do their jobs.
Still, many knowledge workers have grown accustomed to working remotely over the last 18 months, leaving business leaders with a choice to make about in-office versus remote work policies. Respondents to a January 2021 Fortune/Deloitte CEO Survey noted that more than one-third of employees will continue to work from home well into 2022. Add to that a recent Global Work From Home Experience Survey, in which 82% of respondents said they want to work from home at least some of the time when the pandemic is over, compared with just 8% who said they would not want to work from home at any frequency. While some companies have been quick to embrace this shift, there’s still no standard approach when it comes to hybrid work. And even if it were that simple, there are several crucial factors to consider first.
Immediate access to a global talent pool
Without the constraints of needing to hire locally, organizations can now pursue and attract talent on a global scale. This ability to recruit workers from anywhere means access to a much larger talent pool, especially in industries like technology, where many professionals note a strong preference for remote work. Even before the pandemic, in a 2017 Developer Survey, more than half of developers said that being able to work remotely was a priority when looking for a job. What happens if that preference isn’t met? A significant portion of workers are willing to seek employment somewhere else; 46% of workers said they would look for another job if they were not given the option to work remotely at least some of the time, per Global Workplace Analytics. Additionally, the flexibility of remote work could improve the employee experience for workers by saving them time and money on commuting, and, in turn, can bring increased levels of productivity to the business.
Takeaway: Hybrid work is a reality that almost all executives must face. Retaining top talent means making a compromise where it’s necessary. For employees who are able to work remotely—and insist on it—business leaders should consider a hybrid schedule that provides flexibility with regularly scheduled days in the office.
The collaboration conundrum
Imagine taking a baseball bat to a system that’s been in place for the last century…things are going to break. One of the first items on that list is inarguably collaboration. Brainstorming sessions on Zoom have a time and a place, but their rigid parameters are, in fact, a part of the problem. There are many organic conversations and ideas that happen before and after in-person meetings. Employees who continue to work remotely will not have the added benefit of grabbing coffee with a coworker or having spontaneous side conversations that often occur in the office environment.
On the other hand, the office environment itself can be costly, especially for business owners renting space. As the same Deloitte survey points out, real estate alone typically falls within an organization’s top three expenses (comprising anywhere between 2% and 5% of organizational revenue). The survey found that 76% of CEOs indicated that their organizations would need less space moving forward, which could drive significant cost savings. In this light, a hybrid working model could help reduce big ticket items like operating costs and capital expenditures.
Takeaway: Real estate costs can take a big bite out of the organization’s budget, but dedicated office space will not become a thing of the past. Executives will still need to allocate a portion of the budget to shared spaces where employees can collaborate in person. When possible, plan for important meetings on days when required attendees will all be on site, and set the precedent that “collaboration days” will be mandatory as part of the company’s hybrid work strategy.
Increased cloud costs
Cutting costs on office space may not be worth the hype when considering non-negotiable increases in spending in other areas like security. It’s no secret that many mid-market and enterprise businesses have spent small fortunes on cybersecurity protection, and for good reason. But as portions of the workforce continue to perform their responsibilities remotely, all this effort and budget spent on defense could turn into a loss. That’s because the newly created architecture is distributed externally and not within a company’s network.
Generally speaking, devices that are now distributed to personal home networks are less secure and more susceptible to threats. Between February and April 2020, cyberattacks jumped an estimated 238% globally, according to the 2021 Global Technology Governance Report, putting greater pressure on security teams to protect the remote workforce. To combat this issue, many companies are now increasing spending on the cloud with a focus on cloud security and governance tools. In recent efforts to support a remote workforce, cloud costs have already increased by 11% in Q4 2020 and 30% from the same period in 2019.
Of course, an increase in spending on security is not a negative, as long as the tools and solutions have been incorporated with a holistic approach and not as a quick fix to temporarily protect remote workers. The fact that executives outside of the IT department are now working directly with their CIOs to improve the organization’s digital experience is also a silver lining. A recent IDC report predicts that by 2024, 50% of CIOs will accelerate robotization, automation, and augmentation. All of this will be done in an effort to support safe, distributed work environments.
Takeaway: Avoid adding tools before fully understanding how they will integrate with the organization’s current system. Instead, invest in security solutions that take a holistic approach to threat detection and response, which includes providing protection for hybrid cloud and work-from-home environments.
Balancing the scale
Hybrid work is here to stay, but taking a cookie-cutter approach creates additional risk that can impact crucial factors such as culture, collaboration, and security. To strike a balance between remote and in-office work, executives should take time to create a strategy that aligns with the organization’s mission and objectives. Like any successful strategy, this living document should be built to evolve with a rapidly changing market, employee expectations, and unexpected disruptions.
Ascension Group International is a technology-led equity investment firm that takes mid-market organizations to the next level. As operators at heart, we practice proactive ownership, and we believe together is the best way to make big things happen. Learn more about Ascension Group International here.