Aspiring to evidence-based policy: The curious case of hybrid working
A question for leaders: What poses a greater threat to productivity, hybrid working or reduced workforce capacity and capability?
Business and government leaders claim to be evidence-based decision-makers, except when it comes to hybrid work. Will the evidence that remote and hybrid working benefits employees and organisations ever be sufficient?
First published in The Mandarin.
Eliminating remote work is a theme of leadership among business leaders. Amazon’s chief executive, Andy Jassy, sent a message that delightfully begins, ‘Hey team’, but goes on to demand that all employees return to the office five days a week.
Jassy’s directive is in line with those of Jamie Dimon of JPMorgan Chase and David Solomon of Goldman Sachs. The supporting argument is that it’s all about ‘culture’ and increasing the opportunities for ‘spontaneous idea generation’ (no doubt emerging from ‘water cooler’ conversations).
Following a similar pattern, NSW Premier Chris Minns also puts himself at the leading edge of international workforce management. However, the argument in Australia includes the additional thread of critical economic support that public servants provide to inner-city coffee shops.
All these leaders would no doubt describe themselves as data-driven decision-makers who listen attentively to differing opinions and make evidence-based decisions.
It seems that remote work is the exception, where the opinion of the most senior person is the only evidence required.
Aspiring to evidence-based policy
In 2010, Professor Brian Head referred to evidence-based government policy as an ‘aspiration rather than an accomplished outcome’.
Evidence-based policy is straightforward in theory but troublesome in practice. It seems a ‘no-brainer’ that policy decisions should be informed by rigorous research and evaluation and not on ideology, gut feelings, or anecdotes.
Problems that are messy, social, and interdependent can be troublesome. The question, ‘What is evidence?’ becomes interesting quickly. Accordingly, the language has shifted from evidence-based to evidence-informed to accommodate the diversity of evidence and interpretations better.
Evaluation at the heart of policy design
In July 2023, the government established the Australian Centre for Evaluation to ‘put evaluation evidence at the heart of policy design and decision-making’.
RCT is seen as the gold standard for measuring effectiveness. Unfortunately, zealous advocates tend to see opportunities to apply RCT designs to all policy problems without considering the limitations of the evidence they provide.
Nevertheless, RCT evaluations provide the advantage of randomisation. This allows the results to be directly linked to the experimental intervention, enables comparison between groups to assess efficacy, and can clarify cause-and-effect relationships.
Back to remote working
This brings us back to remote working, where the evidence of ‘normal science’ has not produced enough evidence to convince government and business leaders of the benefits of remote work.
A meta-analysis of 108 studies found that ‘higher levels of remote work are associated with several upsides for employees with no major downsides except for perceived isolation’. The authors concluded that these findings ‘cut against narratives for a return to the office as a means to enhance employee morale and productivity’.
Stanford University Professor and economist Nicholas Bloom and his colleagues Ruobing Han and James Liang presented the first randomised control trial to investigate the benefits of hybrid working published in the scientific journal Nature. The clue to the findings is in the paper's title, ‘Hybrid working from home improves retention without damaging performance’.
The study examined the experiences of 1,612 Trip.com graduate employees who were randomly assigned to one of two groups for six months. Based on even or odd birthdays, participants were assigned to work from home on Wednesdays and Fridays while coming into the office for the remaining three days or to a group that went to the office all five days. The participants came from backgrounds in software engineering, marketing, accounting, and finance.
The hybrid group indicated significantly higher job satisfaction, improved work-life balance, and greater overall life satisfaction. Importantly, their attrition rates were one-third lower, especially among those with longer commutes and women.
Despite the frequently expressed concerns that those working away from the office are less productive, those in the hybrid group demonstrated the same productivity levels as those working on-site.
The number of workers promoted in each group showed no significant differences during the two years following the study, addressing concerns that those who work in the office have an advantage arising from being present.
Will it ever be enough?
There is considerable evidence that remote and hybrid working is good for both the employee and the organisation. Yet, even with the gold standard of an RCT, the opinions of government and business leaders pushing hard for a full return to the office will likely remain the same. For some, evidence is optional for decision-making.
In 2013, Professor Peter Shergold, then Chancellor of the University of Western Sydney, in a speech titled, ‘My Hopes for the Public Service of the Future’ wrote:
Too much innovation remains at the margin of public administration. Opportunities are only half-seized; new modes of service delivery begin and end their working lives as ‘demonstration projects’ or ‘pilots’; and creative solutions become progressively undermined by risk aversion and a plethora of bureaucratic guidelines.
The pandemic created the conditions for a natural workforce experiment on remote and hybrid working. A great deal has been learned that benefits both employees and organisations.
It is troubling that leaders and managers who purport to be evidence-based in other aspects of their roles are unwilling to concede to the evidence of hybrid working and learn from the many natural experiments run in their organisations over the past few years.
Peter Shergold’s observation remains valid for business and government alike, with the possible addition of unimaginative leadership.
Recruiting agencies report increased employee turnover as workers depart from companies that mandate five days in the office. Meanwhile, candidates are turning down roles that do not offer hybrid work arrangements. Talent is highly mobile, and skill shortages are widespread in business and government sectors.
What is the more significant threat to productivity, hybrid working or reduced workforce capacity and capability?
