Survey says: The future of work is hybrid

Mass. Business Roundtable survey finds more employers open to hiring out-of-state and that most will only require workers come back to the office a few days each week.

The office towers of downtown Boston will be full — sometimes — if a new survey of employers about the "future of work" is accurate.David L. Ryan/Globe Staff

When it was finally time to come back to the office at FirstLight Power, chief executive Alicia Barton thought for sure she would see her 45 colleagues in the company’s Burlington headquarters at least two days a week.

Then something happened over the winter that forced her to reconsider: She attempted to hire two energy traders. After two weeks, Barton hadn’t heard from any qualified applicants. So she tried something new. She begrudgingly changed the job description to allow FirstLight’s corporate positions to be fully remote. The next day, she received 30 qualified applications. (One likely factor: Energy traders tend to cluster in the industry hub of Houston, and many would prefer to stay there as a result.)

“It was a real wake-up call,” Barton said. “I had to really revisit my own assumptions about what is best for the business. It is not without some worry. I worry about what you lose without having as much of an office presence. I worry we just won’t have relationships that may last as long with employees over time if we’re not seeing each other. [But] I can’t run my business without energy traders.”

Barton’s decision highlights the balancing act that many Massachusetts chief executives face right now, amid a competitive labor market and a widespread embrace of remote work. It also underscores the possible threat to the local economy that these trends could pose as life with COVID-19 becomes a “new normal.”

FirstLight was one of 51 companies that participated in a Massachusetts Business Roundtable membership survey during the past two months, a poll that offers fresh evidence of the challenges facing local employers when it comes to hiring and retaining office workers post-pandemic. Executives know they need to be flexible, or they risk losing workers or struggling to hire. But they also want some in-office contact, in part to help foster the kind of teamwork and collaboration that helps employees feel connected to their companies.

The vast majority of Roundtable members have experienced increases in voluntary departures among entry-level staffers and lower-level managers since the pandemic began more than two years ago, and most are finding it tougher to fill those jobs than they did before COVID. (Turnover, however, among C-suite executives and other high-level posts apparently hasn’t changed that much.) Meanwhile, the number of members that expect at least one-tenth of their employees will live out of state has more than tripled, to 28 percent.

One-fifth, or 21 percent, said all or most of their workforces are still at home, or mostly remote, compared with four-fifths (81 percent) a year ago. Half are in a hybrid mode, and more than a quarter are mostly or fully in-person again.

“Employers are going right up to the line of requiring folks to come in,” said JD Chesloff, the Roundtable’s president. “They’re not quite there yet. ... Once you start crossing that line into mandating, you lose people.”

Still, only 6 percent of respondents said their company’s long-term plan is to go fully remote. Most companies — 68 percent — expect hybrid schedules will be the “new normal.”

This is the second time the Roundtable, working with consultancy McKinsey & Co., has conducted such a survey of its members. It took the first poll about a year ago amid the start of the vaccine rollout. Now, employers presumably have more clarity about long-term plans. One interesting comparison point: A year ago, 19 percent of respondents expected the new normal would involve being in person all or most of the time. Now that’s up to 26 percent, with the number of employers expecting a blend of in-person and remote work becoming the norm dropping from 79 percent, to this year’s 68 percent.

The vast majority of respondents said they plan to maintain or expand their headcount in Massachusetts, though one-third plan to reduce local office footprints. Chesloff said he found the stat showing the sharp increase in companies with at least 10 percent of employees in out-of-state locations to be alarming. To prevent a continued shift, Chesloff said, business leaders should work with state policymakers to provide more support for childcare, housing production, and workforce training.

The report also points to successful corporate strategies for retaining and attracting employees. They include flexible working hours, higher salaries, hybrid-work tools, and mental health and wellness programs.

Accounting and consulting giant KPMG, which employs about 1,300 people in Boston, has seen some success in curbing attrition in recent months, by bumping up pay, 401(k) benefits, and paid parental leave, as well as reducing healthcare premiums. John Capone, head of KPMG’s Boston operations, said the firm is still looking to grow its local workforce. Many employees will spend a few days a week either at KPMG’s downtown office or a client site. Some might only do so a few times a month. Almost nobody will be consistently back all five days.

“What we’re trying to say is, we will embrace the hybrid model, but we will encourage you to come together, from time to time,” Capone said. “We think [our] people and those connections they make [in person] are still very important to retention and maintaining our culture.”

Employer surveys in other locations also show a widespread embrace of hybrid work. For example, the Partnership for New York City reported on Monday that it found 78 percent of office employers in that city are planning for a hybrid model, with only 10 percent requiring daily attendance.

Cambridge-based Forrester Research, meanwhile, released a report last week that found half of surveyed employers nationwide plan to use a hybrid model, with 15 percent moving to a mostly or completely remote approach, and one-third requiring a return to prepandemic commuting habits.

J. P. Gownder, principal analyst on Forrester’s “Future of Work” team, said many bosses miss the camaraderie of office culture but also want to respect employees who have proven they can do their jobs remotely. But, he said, the “future of work” remains a moving target.

“We are still in a state of flux,” Gownder said. “We won’t always be in a tight talent market.”