Ask people on either side of the return to work debate and you’ll hear them warn of severe consequences if your organization makes the wrong call. 

Remote work boosts productivity and curbs burnout’, shout some studies. But ‘innovation and productivity will suffer if remote work becomes permanent’, cry others.  

But there’s far less consensus about what the right call looks like.

Should your people continue working from home? Or should they be returning to the office?  Does hybrid work for everyone, or no one?

Let’s untangle some of the arguments.

Most employees don’t want to come back to the office

Flexibility at work has been an increasingly important priority for employees in the UK, long before the pandemic. It makes sense, then, that employees’ experience of remote work has been predominantly positive.

That’s reflected in the number of workers choosing to continue working remotely even once COVID-19 guidance was lifted. Data from the Office of National Statistics shows that 38% of UK adults were working from home at least sometimes after restrictions eased.

This ‘at least sometimes’ approach is winning right now. The same ONS data shows that the proportion of employees working exclusively from home decreased between January 2021 and May 2022, while the proportion hybrid working has increased.

These figures show the office definitely continues to have its place – but mandating an en-masse return to the office is not what most employees want.

Forcing a return that employees don’t want could be a recipe for disaster, especially given the current employee engagement delima. Only 11% of UK workers are engaged, impacting the likes of retention, productivity and profitability.

Not accommodating your people’s needs – especially when other organisations will – risks your fundamental ability to compete. Not only for talent but also commercially, when you lack the workforce to deliver on your strategic goals.

That’s especially true given rampant talent shortages. For example, Manpower Group finds that UK talent shortages have hit a 16-year high, with 78% of UK employers reporting difficulty finding the talent they need. This compares to only 9% of businesses saying the same in 2010 – an extraordinary change.

But of course, the situation is much more complex than this. Employee engagement is multi-faceted: whether employees work from home or in-person isn’t the only factor influencing engagement.

In particular, diversity, equality and inclusion are critical – and both sides are concerned how remote working will affect this. For example, the CIPD find that 48% of UK organisations are concerned about the impact of remote working on inclusion. And 24% of employees are concerned they’ll be treated less favourably than colleagues who have returned to the office.

Or take work/life balance. Burnout among UK employees has hit a record high, with average working hours increasing by 22% thanks to remote working.

The upshot is, there’s no definitive answer to whether returning to the office is good or bad for employee engagement. It’s both. It’s neither. It’s complicated.

And it’s not only employee engagement that’s at stake.

Is returning to the office essential for productivity?

Pushing employees to reenter the workspace despite their preferences is a risky business. But what’s the cost of not doing so?

Savills Research analysed office occupancy rates across Europe, finding that average European occupancy rates in June 2022 were 43%. London had the lowest occupancy of all European cities in the study, with office occupancy at only 38% in the West End and 32% in the City.

That means the City of London has 41% less office occupancy than Paris, which enjoys office occupancy of 54%. And 38% less than Madrid, which has 52% occupancy.

This disparity in the number of employees returning to the office raises concerns for UK employers, especially concerning the potential impact on productivity.

The UK’s productivity rate is already among the lowest in Europe – 102 points compared to 106 across the European Union, for instance. For context, Ireland tops the list with 137 points.

Increasing productivity means increasing your output (goods and services) for the same input (people and time), powering profitability and wage increases. But UK productivity growth has been ‘flatlining’ since 2010.

(Use this productivity calculator from the Office for National Statistics to compare your business to others across the UK).

There’s more nuance to the talent attraction and retention conversation. Hard factors like compensation are unquestionably critical to your employer brand.

Office-based work: how productivity impacts compensation

Although the return to the office debate has a direct impact on employee engagement, it also has an indirect impact on compensation. That’s an indirect impact worth considering, as finances are climbing up many employees’ agenda right now.

Recent research shows that more than three in five UK workers are looking for a new job, for example – 49% specifically mention the cost of living crisis. Given that 60% of employees who switched jobs from April 2021 to March 2022 and saw their real earnings jump by 10%, this tactic makes sense.

But it’s not good news for employers, who are now facing ever-increasing recruitment and compensation costs while also battling the impact of inflation.

If remote working has a negative impact on productivity, it could also have a negative impact on organisations’ ability to compete for talent. Productivity increase is a major mechanism for freeing capital for wage increases.

The opposite is also true, then. Stagnating productivity puts more pressure on already-tight budgets.

Ultimately, this means the consequence of delaying your return to the office could be an inability to increase wages competitively – driving the best talent towards businesses with bigger budgets. 

The impact of remote or office-based work on productivity is far from established though. There were many early concerns about the impact of remote working on productivity but there’s been little conclusive evidence either way. Employees’ self-reported productivity levels reflect this, according to a comprehensive study of UK homeworking:

  • 41% say they were equally productive at home as in the office.
  • 30% say their productivity fell working from home.
  • 29% say their productivity rose working from home.

With inconclusive evidence either way, a cautious approach that continues to support hybrid working could be a better bet than mandating returning to the office.

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There’s no simple resolution to the back-to-office debate: every organisation is different, as is every employee within that organisation.

Hybrid working remains largely popular right now so there are major employee engagement considerations if you plan to encourage people to come into the office before they’re ready. But at the same time, the situation might change quickly as financial concerns become increasingly prevalent and energy bills rise.  

Maintaining close visibility over your workforce and their evolving needs is vital, to react fast to provide the right support.