For whom does hybrid working really work: the individual or the organization?

Hybrid working has become the standard in Dutch offices in the space of a few years. Employees typically have the flexibility to work wherever they want, often splitting their time between two to three days in the office and the rest at home. This is a positive development for individual employees, as the opportunity to work from home has become an important employment condition. However, both employers and employees are increasingly facing the disadvantages of this strategy. Companies and teams are no longer innovative, productive, and cohesive collectives, but rather a collection of individuals. Therefore, CBRE calls for a subtle but crucial adjustment to hybrid working policies. By shifting the focus within the hybrid working policy and restricting flexibility slightly, organizations can stimulate workplace cohesion, ultimately benefiting employers, teams, and individual employees.

For this publication, we interviewed CBRE's office occupier panel, consisting of more than hundred office occupiers, from corporates to SMEs. Together, these occupiers use 2.5 million square meters of office space, accounting for about 6% of the office stock in use in the Netherlands. We asked them questions about their housing strategies, and particularly the impact of hybrid working on these strategies. Three-quarters of the respondents currently have a hybrid working policy, approximately 15% do not, and a small minority are still in the exploratory phase.

Hybride working: in theory…

Since the COVID-19 pandemic, most office jobs have been redefined. Hybrid working has become the norm, allowing employees the freedom to work in the office, at home, or elsewhere. The exact split between working remotely or from the office varies by organization.

Working in the office as the primary workplace

In this model, organizations view the office as the primary workplace. Companies adopting this model provide employees the opportunity to work remotely part of the time, but indicate that more than half of their workdays should be spent in the office.

Blended

Most organizations choose a balanced mix of remote and physical presence. Companies in this category give employees the flexibility to work remotely but expect them to spend an equal amount of time in the office for shared activities.

Remote first

Some organizations discovered remote work to be so effective during the pandemic that they have established it as the standard practice. In these companies, more than half of the work is done remotely, with office space available when needing to team up but with limited individual workspaces.

...and in practice

Now, four years and much experimentation later, three-quarters of the organizations in our office occupier panel have established hybrid policies, with most choosing for an equal split between office and remote work—the blended approach. Notably, most corporates require or ask their employees to be in the office at least two days, while SMEs often ask for three or four days of presence. The remainder of the week, employees work from home or elsewhere. However, policies often play out differently in practice; when half of the time in the office is the norm, actual occupancy is frequently lower.

In consultation with their teams, employees are given a degree of freedom in choosing their workplace. They get to formulate their own answer to the guiding question: when or for what reasons do I need to be in the office, and what can be done elsewhere?

Development of occupancy rates

While many companies have established policies, they still seem to be searching for the right balance between working from home and working in the office. A long-term analysis of the development of occupancy rates reveals two notable trends.

1. Gradual increase in office presence

In 2019, the average office occupancy rate was 65%. This percentage dropped significantly the following year as nearly everyone worked remotely due to the COVID-19 pandemic. In 2022, occupancy was even lower than it was before the pandemic, but in 2023, the average rose again: from 51% to 56%. Nearly three-quarters of the surveyed organizations do not expect any further occupancy increase in the near future, while about 25% anticipate a fuller office. This suggests a cautious return to pre-pandemic occupancy levels.

2. Shift in weekly distribution

Tuesday and Thursday are the busiest office days of the week—almost every organization is familiar with the so-called "camel week." On these two peak days, the occupancy rate is nearly the same as it was before the pandemic, while the other days are significantly less busy. This is partly due to many people having Monday, Wednesday, or Friday as a fixed day off. Employees who do work on those days are less likely to come to the office, as they do not find what they are looking for: colleagues.

When we also consider the type of organization, it is noticeable that the weekly distribution of SMEs is flatter than that of corporates. On Tuesdays and Thursdays, the occupancy rate is approximately the same, but throughout the rest of the week, employees from SMEs come to the office more frequently on average. This difference can have various causes, including company culture, work schedules, smaller teams, and commuting patterns.

Current balance causes friction

Looking solely at individual employees, the common standard of two days in the office works. They appreciate having some choice in their workplace location part of the week. Working from home is often quieter, they have shorter commutes, and their work-life balance is better. This makes it easier to combine sports, household duties, or time with their children and work.

However, we also encounter shortcomings, which may explain the gradual return to the office. Teams working remotely risk falling apart due to unclear role definition and task distribution, less communication, and poorer coordination. Furthermore, young employees find it harder to observe and learn from their older colleagues when those colleagues are not in the office. Additionally, it is much more difficult to find one’s place within a close-knit, social team when you’re not physically together for at least half of the week. The result is a loss of team bonding and less cohesion.

Ultimately, everyone suffers from these downsides. Employees feel less connected to their colleagues, team, and organization. Employers are also affected: a lack of remote oversight can lead to decreased employee productivity. This is detrimental to results—and thus to corporate interests. The office remains the place where colleagues meet, exchange ideas, learn from each other, build relationships, and ultimately maintain connections with one another and the collective. The less employees come to that valuable space, the greater the risk of organizational damage.

Belonging as a foundation for progress

That the office is indispensable for teams and organizations has a logical explanation: a company is not a random collection of individuals, but a carefully assembled team with shared tasks and responsibilities. When we described the new way of working, we often talked about the terms bricks, bytes, and behavior. Since the pandemic, a fourth important "B" has emerged: belonging. Companies are more than the sum of their parts; a collective of people who uphold the same culture, and who together have more intelligence, productivity and innovation to offer than on their own.

Of course, employees can perform a lot of work online. However, the remote work environment supports the values mentioned above much less effectively than the physical one. This is also related to everyone’s search for a sense of belonging—not without reason one of the important human needs in Maslow's hierarchy. Everyone seeks connection and wants to belong somewhere. Colleagues who feel connected can collaborate more effectively and are more willing to support each other, which enhances the effectiveness, productivity, and success of the group as a whole—and thus of the company.

Individual versus collective interests

Being a physical part of the larger whole not only provides benefits for individual colleagues but ultimately also benefits the collective. Yet, workplace strategies are still approached too much from an individual perspective; that is, what do employees, job seekers, and the outside world expect from us? While this is important, this individual approach overlooks the collective interest.

To move forward as an organization, a more group-oriented approach is necessary. The office does not need to be the only workplace, but it should be the primary one, with people being physically present more often than remotely. This does not mean that you should discard your entire hybrid workplace strategy. Even within the blended approach—the middle of the spectrum—it is possible to shift the focus towards more physical presence. If you explore what you’d ideally want to do together in the office, you are more likely to spend three days in the office rather than two, which is currently the average in many corporate organizations.

Adjust the guiding principle slightly:

Not
Which work activities must be done in the office, and what can be done at home or elsewhere?

But
Which work activities are more efficient at home or elsewhere, and what works better collaboratively in the office?

Attracting or mandating

The freedom to choose your own workplace is a compelling advantage in recruitment. In fact, job applicants expect it from employers these days. And even the public opinion sees the ability to choose one’s workspace as a modern, progressive view of work. This suggests that it is better to entice employees to be in the office more often than to oblige them.

Still, our call is: don’t be afraid to require your people to come to the office more often. In doing so, it is crucial, however, to include employees in the added value this brings to individuals, teams and the organization. The flexibility to work where you want may be an important employment benefit, but it is not the only one. There are many other aspects that make a company attractive.

By shifting the focus within the hybrid policy and restricting flexibility slightly, you make the collective more cohesive. And ultimately, employers, teams, and individual employees all benefit from this, thanks to numerous positive effects: from a boost in productivity, innovation, collegiality and learning ability to lower turnover, higher revenue, and better financial rewards.

This does not mean that there is no individual flexibility for the employee: within a future-proof hybrid workplace strategy, the need of the individual must be considered. However, to achieve the optimal balance, it's essential to see the employee as a member of a larger team or organizational collective. By focusing on the positive effects of more connection within that collective, we ensure that hybrid working is effective at all levels.