Great Expectations: Making hybrid work work

The experiences of the past two years have profoundly reshaped our priorities, identities, and worldview, drawing a clear line between what truly matters. This shift has altered employees' “worth it” equation—what they want from work and what they are willing to give in return. The power dynamic in the workplace is evolving, and traditional perks like free food and corner offices are no longer what people value most.

Microsoft's study reveals that 47% of respondents are now more likely to prioritise family and personal life over work than they were before the pandemic. Additionally, 53% are more inclined to prioritise their health and wellbeing over work.

In 2020, 17% of people left their jobs, and this trend continued in 2021, reaching 18%. The top five reasons employees cited for quitting were personal wellbeing or mental health (24%), work-life balance (24%), the risk of getting COVID-19 (21%), lack of confidence in senior management or leadership (21%), and the lack of flexible work hours or location (21%). Interestingly, “not receiving promotions or raises I deserved” was only the seventh reason at 19%, underscoring the shift in priorities.

As companies like Microsoft explore the future of work through innovations like Mesh, the focus is on creating digital experiences that align with these evolving employee values. Mesh for Microsoft Teams, for instance, aims to provide more immersive and flexible collaboration tools, allowing employees to maintain connections and productivity while honouring their newfound priorities. 

The data indicates that the Great Reshuffle is far from over. In the coming year, many hybrid employees (51%) are considering a switch to fully remote work, while an even higher percentage of remote employees (57%) are contemplating a transition to hybrid work. Meanwhile, 43% of all employees are somewhat or extremely likely to consider changing jobs within the next year, a slight increase from 41% last year. This trend is even more pronounced among younger generations—over half (52%) of Gen Z and Millennials are considering a job change, a 3-percentage point rise from last year. In contrast, only 35% of Gen X and Boomers are thinking about switching employers.

The desire for flexibility isn’t limited to employees; it extends to leadership as well. Nearly half (47%) of leaders are likely to explore job opportunities that are not geographically close to their homes in the next year.

Microsoft Mesh is poised to transform how teams collaborate, offering new ways to connect and work together in hybrid and remote settings. By embracing such advancements, Microsoft can help both employees and leaders adapt to the evolving demands for flexibility and mobility in the workplace, ensuring they remain engaged and productive no matter where they choose to work.

The past two years have underscored that a company's culture will thrive or falter based on the actions of its managers. However, many managers feel caught between the demands of leadership and the evolving expectations of employees. Over half of managers (54%) believe that their company’s leadership is out of touch with employee expectations, and a significant 74% say they lack the influence or resources needed to make meaningful changes for their teams.

50% of leaders report that their companies either require or plan to require full-time, in-person work in the coming year. This percentage is even higher in specific sectors, such as manufacturing (55%), retail (54%), and consumer goods (53%).

This approach sharply contrasts with the growing importance of flexible work to employees. More than half of respondents (52%) are likely to consider transitioning to hybrid or remote work in the near future. Additionally, the demand for remote and hybrid roles continues to rise. In March 2020, only 1 in 67 U.S. jobs on LinkedIn offered a remote work option, but today, that number has surged to about 1 in 7. Remote jobs on LinkedIn now attract 2.6 times more views and nearly 3 times more applicants compared to on-site roles.

Over the past two years, leaders have faced immense pressure, guiding their teams and organisations through uncertainty and unprecedented economic challenges. It's understandable why many might view a return to the office as a straightforward solution. However, in today’s uncertain economy and shifting labor market, leaders face a new and urgent challenge: establishing a standard for flexible work that balances business outcomes with evolving employee expectations.

Key takeaway: A crucial lesson from the past two years is that managers are the embodiment of an organisation’s culture. They serve as a vital link between shifting employee expectations and leadership priorities. If given the right tools and authority, managers hold the key to unlocking the full potential of hybrid work. To make this transition successful, it is essential to equip them with the necessary resources and training. While overarching policies are determined by leadership, it’s critical for leaders to decentralize decision-making, empowering managers to address their employees’ unique needs effectively.

In this context, innovations like Microsoft Mesh can play a transformative role. By enabling immersive, flexible collaboration in hybrid and remote settings, Mesh can empower managers to foster a culture that aligns with both company goals and employee needs. Microsoft’s focus on equipping managers with advanced tools like Mesh can bridge the gap between leadership and the workforce, ensuring a successful transition to the future of work.

As the world embraces hybrid work more fully, the biggest opportunity for business leaders is to redefine the role of the office and establish clear guidelines on why, when, and how often teams should meet in person. Over a third (38%) of hybrid employees report that their primary challenge is understanding the purpose and timing for coming into the office. Yet, only 28% of companies have developed team agreements to establish these new norms.

Creating an effective office environment for all employees will require deliberate and innovative strategies. There isn’t a one-size-fits-all solution: try initiatives like "Team Tuesdays" or designate specific office hours, such as between 12 p.m. and 2 p.m., on certain days of the week. Additionally, consider organising quarterly off-sites to bring together geographically dispersed team members. The crucial element is for managers to offer clear guidance and support as they experiment with different approaches to find what works best for their teams.

The trillions of anonymised productivity signals across Microsoft 365 illustrate the practical implementation of flexible work. However, as employees adapt to this new work style, addressing digital fatigue remains crucial.

The data reveals that, on the surface, for the average Teams user, there has been a notable increase in meetings, chats, workday duration, and after-hours and weekend work over the past two years.

Meetings continue to dominate our schedules. Since February 2020, the average Teams user has experienced a 252% increase in weekly meeting time, and the number of weekly meetings has surged by 153%. Additionally, weekly chat volume has risen by 32% from February 2022 compared to March 2020, with this trend showing no signs of slowing. The average Teams user's workday has extended by over 13% (46 minutes) since March 2020, while work done after hours and on weekends has grown even more significantly, at 28% and 14%, respectively.

Despite the challenges of digital overload, individuals are taking charge of flexible work, actively managing their time and redefining their workdays. Productivity trends in Outlook reflect a growing intentionality: employees are increasingly incorporating breaks, avoiding scheduling conflicts, and setting aside meeting-free work periods. Between March 2021 and February 2022, anonymised Outlook calendar data reveals a 44% reduction in the average number of overlapping meetings per person per month. Teams are now starting meetings later on Mondays and finishing earlier on Fridays, with fewer meetings scheduled at noon, possibly indicating midday breaks. Additionally, there has been a 10% increase in out-of-office time blocks on calendars, suggesting that more employees are taking their vacation time.

Although overall meeting frequency has risen, meetings are becoming shorter and more spontaneous. Employees are adapting digital tools to replicate informal “drive by” or “hallway” conversations, with ad hoc calls increasing by 8% over the past two years and now constituting 64% of all Teams meetings. Meetings lasting under 15 minutes have become the majority (60%) and are growing faster than longer meetings, with a 39% increase between February 2021 and 2022.

Jaime Teevan, Chief Scientist at Microsoft, emphasises the importance of adapting to these changes: “With everyone working at different times and from various locations, it's crucial to move as much work as possible to asynchronous formats and be intentional with the synchronous time you have together.”

Innovations from Microsoft, like Microsoft Mesh, and strategies from Meta are pivotal in supporting these evolving work patterns, helping organisations and individuals navigate the complexities of flexible work effectively.

Taken together, the data reveals that employees are actively adapting to flexible work, but ensuring its long-term sustainability will require establishing new team norms to prevent an "always on" mentality.

Key takeaway: To make flexible work truly sustainable, teams need to develop new norms that minimise time spent in meetings and encourage employees to disconnect. This effort should not be left to individuals alone but should be a collective initiative, driven by the team, to create more sustainable hybrid work practices. By leveraging tools from Microsoft, such as Microsoft Mesh, and incorporating strategies from Meta, organisations can better support this transition and foster a healthier work environment.

One of the most noticeable impacts of remote and hybrid work has been on our relationships. Last year’s Work Trend Index highlighted the increasing silo effect within teams, and this year’s study continues to reflect this trend.

Work Friends Matter, Too:

Microsoft's research delves into the significance of deeper workplace friendships, beyond just formal relationships. It reveals that 59% of hybrid employees and 56% of remote employees have fewer work “friendships” since transitioning to hybrid or remote work. This decline in connections may be contributing to increased feelings of loneliness: 55% of hybrid employees and 50% of remote employees report feeling lonelier at work compared to before.

66% of respondents feel that virtual coffee chats are perceived as “more of a chore” than in-person gatherings. Organisational psychologist Constance Noonan Hadley describes workplace loneliness as the feeling that “few people truly know me or would support me in my time of need.” Research shows that workplace loneliness can lead to health problems, decreased productivity, higher turnover, and burnout.

Hadley emphasises that without a new approach, employee isolation and disconnection will only worsen, regardless of office attendance. The post-pandemic transition is an ideal time to implement structures and incentives that promote a more connected workforce.

Managers should focus on providing opportunities for employees to build deeper and more authentic connections beyond mere task lists. Fostering a culture of psychological safety is crucial, enabling employees to be vulnerable and seek support from one another.

Although many hybrid employees are maintaining their work relationships, only half of remote workers report having strong relationships with their direct team, and even fewer feel connected to those outside their team.

In a digital-first work environment, where 51% of hybrid employees are considering switching to remote work in the upcoming year, relying solely on the office to rebuild lost social capital is no longer feasible. Leaders must be deliberate in reconnecting both hybrid and remote employees with the organisation's fabric.

This challenge is significant, with 43% of leaders identifying relationship-building as the greatest difficulty in hybrid and remote work. However, prioritising this is essential. Employees who have strong relationships with their immediate team report better wellbeing (76% versus 57%), higher productivity (50% versus 36%), and are less likely to change employers in the near future (61% versus 39%).

Building networks beyond the immediate team is also crucial. Employees with thriving relationships outside their direct team are more satisfied with their employer (76% versus 57%), more fulfilled by their work (79% versus 59%), and have a more positive outlook on workplace stress (40% versus 30%). Additionally, a broad network supports career growth within a company—LinkedIn data indicates that employees at organisations with high internal mobility tend to stay nearly twice as long.

Microsoft's research indicates that many hybrid employees have successfully maintained their workplace relationships. Over half (58%) report having a thriving relationship with their direct team, and 48% feel connected with colleagues outside their immediate team. However, these figures drop to 50% and 42%. For remote employees, underscoring the need for leaders to support fully remote workers in building robust and extensive networks.

Additionally, employees who joined the company in the past two years require extra support. Nearly two-thirds (62%) of leaders are concerned that new hires are not receiving the necessary support in the hybrid or remote work environment. This concern is well-founded, as the data reveals that employees hired since March 2020 feel less included (60% versus 64%), have weaker relationships with their direct team (51% versus 55%), and face a higher risk of attrition (56% versus 38% are likely to leave their employer in the coming year).

The data indicates that employees are eager to move beyond emails and focus on building connections. While 48% of employees wish to reduce time spent on tasks like answering emails and scheduling meetings in favour of networking, only 30% of leaders believe that networking-related activities contribute to business impact. To harness the benefits of social capital, leaders must create opportunities for employees to develop their networks and build deeper relationships in a hybrid work environment.

Constance Noonan Hadley, an organisational psychologist specialising in workplace relationships, notes, “When work-life balance is disrupted, many people prioritise urgent tasks over relationship-building. Regardless of remote status, relationship-building often feels like a luxury workers can't afford unless managers shift their focus on how time is prioritised and valued.”

Key takeaway: Leaders should not view a return to the office as the sole solution for restoring the social capital lost over the past two years. Instead, they should actively create and prioritise opportunities for relationship-building, recognising that remote and newly onboarded employees will require additional support. Managers are essential in fostering strong team bonds and serving as connectors to help employees expand their networks.