More workers are being forced back to the office – yet a new study shows flexibility is the best way to keep employees

Less than a month after Amazon announced employees would need to give up their flexible work arrangements and return to the office full-time, new research has reinforced the value of a flexible work culture.

The 2024 Employee Benefits Review, by consultancy firm Mercer, found 89% of Australian organisations still offer the option of working from home, with the average number of mandated office days stable at about three a week, the same as last year.

In this era of limited pay growth, businesses are also increasingly leveraging flexible work arrangements to attract and retain top talent, enhance employee engagement and foster a positive workplace culture.

The research shows some Australian workers are even prepared to take a pay cut for the sake of a more flexible work life. This and other findings conflict with a renewed push by some big businesses to get employees back to the office.

Businesses at odds with the research

Three weeks ago, Amazon CEO Andy Jassy issued a memo calling all employees back to the office five days a week.

Up to this point, the return to office (RTO) conversation had largely fallen silent for most of this year. Hybrid work arrangements were generally being accepted as the norm for office workers.

Amazon’s move has reignited the topic. Shortly after the Amazon announcement, Tabcorp CEO Gillon McLachlan ordered workers back to the office to improve performance and create “a winning culture”.

However, not everybody supports the idea, here or overseas. Senior executives at Google and Microsoft were quick to distance themselves. They reassured workers hybrid arrangements would stay as long as productivity levels didn’t fall.

What a new national survey found

Mercer’s report, released on October 2, is based on data from 502 Australian organisations across all major industry groups and sectors. It found flexible work – when managed well – can contribute to a positive workplace culture. It can also improve diversity and inclusion, while broadening the potential talent pool.

As well as letting people work from home, the report found 77% of participating firms allow staff to adjust their start and finish times. And 5% let their employees work four days instead of five at the same pay. This is commonly referred to as the 100:80:100 model of a four day work week.

Four per cent of businesses offered a “compressed working year” – the ability to work the equivalent of 48 weeks in just 40 weeks. Another business was experimenting with letting staff work four years at 80% of salary, and take the fifth year as leave.

Mercer’s client engagement manager Don Barrera said

employers need to find the balance between the needs of their employees and the overall business objectives in order to create a benefits strategy that delivers value to all.

Changing culture

With flexible work now firmly embedded in many Australian companies, work culture is changing too.

Just under 60% now define their culture around “work-life balance.” This places greater emphasis on people, but not at the expense of performance.

This fits with 2021 research identifying positive links between flexibility, employee engagement, productivity and overall performance.

Workplace Gender Equality Agency research released earlier this year describes flexible work as “the key to workplace gender equality”.

Other studies have found flexible work increased potential employment opportunities for people with disabilities.

Flexibility also now extends beyond simply work arrangements. According to the Mercer research, it can include career development, training opportunities, parental leave, part-time work, annual leave, and support for financial wellbeing.

In recognition of cost-of-living pressures, 65% of organisations now offer health and wellbeing classes and 29% offer financial wellness programs. By broadening the scope of flexibility, businesses can better respond to their workforce’s evolving needs.

Everyone benefits

Both employers and employees can benefit from flexibility. For employees, it’s about improving work-life balance, with one-third now willing to forgo a 10% pay rise in favour of flexible, reduced hours, or a compressed work schedule.

For employers, the benefits are attracting and retaining top talent, fostering a positive workplace culture, and being able to adapt to changing market conditions with a skilled and engaged workforce.

By understanding the interconnection between these needs, firms can create a work culture that recognises employees have commitments and interests outside work. This can help employees achieve better work-life balance.