A Tale of Two Companies
Examining two scenarios featuring companies from the financial services sector, we observe that both encounter comparable challenges concerning hybrid work; however, their divergent responses lead to distinct outcomes.
While the companies themselves are fictional, the challenges, strategies, and outcomes discussed in this article are grounded in extensive research conducted in recent years.
Company One – “Not the results we were hoping for”
Two months into the global pandemic, the company is pleased that their business continuity plan has been very successful. They have sent their workers home, equipped with laptops and a VPN connection, where they have been able to carry on business as usual.
Soon though, customer complaints begin to rise, and a quick look at metrics indicates that fulfillment times are up significantly.
Concluding that productivity is dropping because remote workers are not being supervised, the company selects and deploys ‘productivity monitoring software’. In accordance with legislation, the company informs workers that productivity monitoring software is in use.
Initially customer complaints level off, perhaps even improving slightly; however, before long customer complaints are again increasing – and to make matters worse, attrition is also up.
Attributing the decline in performance to a combination of company culture being eroded and workers taking their foot off the gas, the company decides to implement a return to office policy. After internal discussions, they agree that a three day per week mandate would be appropriate.
Unfortunately, attrition continues to rise, and key positions are now vacant. The company is not alarmed though, as they are aware of various reports indicating that unemployment is on the rise and the economy is slowing – they should have little difficulty replacing departing workers; they post the open positions on several job boards, anticipating a good field of candidates to choose from.
A few weeks pass and the company is surprised to find that very few candidates have applied for the senior roles they have posted. Meanwhile, more senior staff have resigned, and the Director of HR sounds the alarm.
The senior leadership team agree that perhaps the company has not kept pace with salary expectations and update the job postings, increasing the salary range significantly.
Eventually several candidates apply for the vacant roles, but they don’t really have the level of experience the company had hoped for.
Several months later, service delivery teams are voicing frustration. The newly hired leaders are not equipped to deal with the challenges they are facing.
Most concerning though are the latest market survey results that show the company is beginning to lose market share. Just yesterday, the CEO made the tough decision to dismiss the Director of HR, seeing the need for a new hybrid work strategy.
Company Two – “What hybrid work should be like”
Two months into the global pandemic, the company is pleased that their business continuity plan has been very successful. They have sent their workers home, equipped with laptops and a VPN connection, where they have been able to carry on business as usual.
Soon though, customer complaints begin to rise, and a quick look at metrics indicates that fulfillment times are up significantly.
The company deploys tools to measure employee engagement and establishes a baseline level. Meanwhile, they also implement a new way of measuring employee performance called ‘Objectives and Key Results’. They are betting that measuring outcomes is a better approach than measuring attendance and keystrokes.
This new approach to performance measurement proved to be quite difficult and the company considered abandoning the initiative; in the end though, they persevered. Thanks to strong organizational change management, most employees are excited about the direction the company is taking and employee engagement improves measurably.
Customer experience, which had declined initially, is now better than pre-pandemic levels.
A few months later, employee engagement begins to drop again. Analysis of the data the company has been gathering reveals clearly that workers are beginning to burn out. Further analysis points to long hours – workers are not ‘shutting off’ at the end of the day. There are also indications that the stress of the pandemic itself is beginning to weigh heavily.
The company makes specialized counselling services available to its workers.
Unsure that this alone will be enough to support their employees, and understanding that some are feeling isolated, the company implements a return to office policy. Knowing that a blanket ‘days in the office’ approach is not effective, the senior leadership team instead decides on a role-based policy designed to bring teams together for specific tasks that work better in person, while allowing their people to work from home when they need to be creative, have some ‘think time’, or just focus on the task at hand.
Employee engagement is now well above the baseline established several months ago and customer service metrics are higher than they have been in many years. Although the company pays slightly below average for their industry, they have no trouble filling vacant positions with experienced people. Just yesterday, the CEO was delighted to inform the Director of HR that they would receive a substantial bonus in recognition of their effective hybrid work strategy.
Summary
While Company One did many things right with their hybrid work strategy, they fell short on a few important practices. Their initial reaction to declining customer service was to implement performance tracking. Rather than achieving the desired result of improving employee performance, this has been shown to destroy trust and erode employee engagement. Making matters worse, the company did not implement any measurement plan to allow them to make evidence-based decisions.
Lacking data to help them understand the cause of increasing attrition – which was actually the result of performance tracking – the company assumed it was due to workers feeling disconnected.
While a typical response, implementing a blanket return to office policy simply resulted in workers putting up with a long commute, increased personal cost, and additional demands on their time to join conference calls in a noisy environment at the office.
Next, the company banked on rising unemployment to help them fill vacancies. They failed to ‘drill into’ the unemployment statistics; had they done so they may have concluded that unemployment in the specific skills and experience levels they needed was actually quite low. Their competitors differentiated themselves by offering flexible work arrangements.
For Company One, the new normal is increased attrition, lower profit, and a slow but steady erosion of market share.
Company Two on the other hand realized early on that they needed to measure employee engagement so they could diagnose, respond, and test various aspects of their strategy. This allowed them to determine root causes and react appropriately.
The company also invested in more effective leadership practices such as OKR, which have been shown empirically to have better outcomes.
Finally, they managed to ‘get the best of both worlds’ by implementing a tailored return to work mandate that was more effective than the simpler ‘days in office’ approach.
For Company Two, hybrid work has meant low attrition, higher profit, and growing market share.