Nation-wide acceptance of hybrid working is driving productivity rates

 Australian employers are increasingly comfortable with hybrid working.

New research from the Australian Human Resources Institute (AHRI) reveals a significant reduction in the perceived challenges of hybrid work. Between 2023–25, concerns around creating connections between colleagues dropped sharply from 75 to 57 per cent, while worries about staff collaboration fell from 58 to 38 per cent. Employers finding performance monitoring challenging also decreased from 43 to 35 per cent, suggesting that organisations are adapting to hybrid working.

Despite these improvements, AHRI researchers said concerns about disconnectedness persisted among employers. “This featured in many of the case studies, including one employer who cited this as the main reason for tightening their return to the office mandate.”

According to AHRI, nearly half (44 per cent) of employers still require full-time staff to attend the workplace between three and five days weekly, down slightly from 48 per cent in 2023. The most popular arrangement remains three days per week (30 per cent), with 28 per cent encouraging attendance without making it mandatory.

Productivity remains a key benefit of hybrid working, with 45 per cent of employers reporting positive impacts. Other significant advantages highlighted include better work-life balance (65 per cent), improved employee retention (44 per cent), enhanced candidate attraction (41 per cent), and increased health and wellbeing among employees (41 per cent).

One group HR officer told researchers, “Hybrid opportunity or flexible work is almost like a hygiene factor for many people in the market. They won’t consider an opportunity if there isn’t some level of ability to work flexibly or work in a hybrid arrangement. So if you want to have access to the best talent, hybrid working is a must.”

Cultural considerations have become central. AHRI research shows 57 per cent of employers mandating increased office attendance cite improving organisational culture as a primary reason, while 75 per cent aim to foster better connection among colleagues. Additionally, 65 per cent highlight improved staff collaboration and cooperation as motivators behind stricter attendance policies.

AHRI findings also highlight the importance of staff consultation, with nearly one-third of organisations yet to consult employees on hybrid arrangements. This is despite evidence suggesting employee involvement significantly enhances organisational performance.

Meanwhile, Culture Amp research highlights the corporate shift towards dedicated people and culture committees. Among the top 50 ASX-listed companies, 70 per cent have established such committees — 26 per cent specifically branded as “people and culture”.

These committees primarily focus on securing and supporting high-quality talent and ensuring competitive remuneration.

Yet, nine ASX top 50 companies retain a narrower “nominations committee”, risking competitive disadvantage by not visibly demonstrating a commitment to improved people and culture practices.

Gaining momentum

The “culture and talent agenda” continues to increase in importance among company boards, says Anne Chow, currently on the boards of three listed US companies — 3M, transport company CSX and leadership development firm FranklinCovey.

The human capital agenda is gaining momentum and its board focus is becoming more pronounced in the US and globally. Chow says this is true of the boards on which she serves, as well as among her director peers.

Chow’s executive career was honed as CEO at AT&T Business, leading the US$35b, 35,000-employee global business solutions unit from 2019–22. The executive role marked a culmination of 32 years at the company — a period witnessing exponential technological change and organisational transformation.

At a global level, the swing towards improving culture was triggered by the pandemic and is being driven by generational changes, according to Chow.

“The pandemic accelerated different factors of change about what the future of work looks like. The younger generations in the workforce, Gen Z especially, but also some of the millennials, who now represent at least 50 per cent of the workforce and growing, have fundamentally pushed us to think differently about work. All across the world, the importance of culture in successfully executing a strategy is paramount.”

At US companies like Boeing and Starbucks, adds Chow, there’s a growing recognition of how critical culture is and also the evolution of the workforce and competition for talent.

This article first appeared under the headline 'Flexible work acceptance' in the May 2025 issue of Company Director magazine.