Hybrid work: Employers see benefits, workers accept tradeoffs

The future of hybrid work depends in part on who is being asked.

In late 2024, eight in 10 CEOs believed that most workers would be back in the physical workplace in the next three years, 17 percent envisioned a world where most roles were hybrid and only 4 percent expected workers to be remote. By contrast, six in 10 workers surveyed believed a hybrid model will become more common than other models.

“The truth is, most organizations today are somewhere in the middle,” according to a report from the HR Executive Board. “Eighty-eight percent of U.S. employers provide at least some hybrid work options. Employees are also on board with hybrid work: Six in 10 employees with remote-capable jobs want a hybrid work arrangement, and more than half of current job seekers also prefer a hybrid role.”

See also: Why your hybrid work strategy may actually be hurting productivity

Report shows how flexibility, hybrid work can drive hiring, retention

The research identified several trends that employers can consider when determining work arrangements.

• Flexibility boosts hiring: Flexibility is now the number-one factor job seekers consider when choosing a job, even above compensation. Similarly, 70 percent of job seekers say they are most interested in positions that offer hybrid work arrangements. All recruiters agree that hybrid and remote work options make filling positions easier. Even more importantly, 83 percent say it leads to better candidate quality.
• Hybrid work is a significant retention and engagement driver: Among existing employees, flexibility is a top factor for staying in a job, close behind compensation. Further upstream, employee engagement varies significantly by work arrangements. Only three in 10 of all on-site staff, including those in roles that can’t be done remotely, report feeling engaged at work, compared with 38 percent of remote workers and the same percentage of hybrid workers. Among remote-capable workers—those whose jobs can be done remotely but who are working onsite—34 percent feel engaged. In a climate of lagging employee engagement, hybrid work can be a critical advantage.
• Employees are willing to trade compensation for flexibility: Another mechanism through which flexibility can drive hiring and retention is by mediating the impact of compensation. Stanford researchers who analyzed job postings found that employees will accept 8 percent lower pay on average in exchange for greater flexibility. In other words, employers seeking a full return to office should expect to pay an 8 percent premium.

Part of the reason why employees are willing to trade off on salary is that they are able to make up the lost compensation by reducing commuting costs. Factoring in the costs of transportation, food and professional attire, employees save an average of $30,322 annually by working locally four days a week rather than daily commuting.

“Employers are starting to accept their employees’ logic,” the report said. “Fifty-nine percent of organizations say they’re willing to pay a premium of up to a 20 percent salary increase in exchange for staff spending four to five days in the office.”