Employers at McKinsey are concentrating on the incorrect aspects as they contemplate a return to the office.
Companies worldwide are pushing for "work from office" policies, requiring employees to commute at least four days a week. However, recent research from McKinsey & Company suggests that this tactic might not be the best choice for business. Despite the varying work arrangements – remote, hybrid, or in-person – employee satisfaction remains consistent. The real issue lies in the work experience. Burnout is rife, intent to quit is rising, and leaders and employees have different views on organizational effectiveness. To fix this, leaders must cease preoccupying themselves with where work is done and focus on improving how it's conducted.
McKinsey's latest study, based on surveys of 8,426 employees and 3,531 executives, reveals that while employees who work from home or in hybrid models are open to workplace flexibility, leaders often lack a clear vision or plan for making hybrid work sustainably successful.
The findings solidify larger trends in the future of work, as revealed by five previous McKinsey studies conducted since 2021. These studies found that organizations have been grappling with balancing flexibility with performance, with a clear tension between where employees work and the effectiveness of their work.
McKinsey on Flexible Work: The Evolution
McKinsey's research has consistently shown that the rigid divide between where employees work and the efficiency of the tasks at hand has been widening.
- Great Attrition' or 'Great Attraction'? The choice is yours. (2021): McKinsey's initial post-pandemic report revealed that 40% of employees were considering quitting, despite not having another job lined up. Many leaders focused on transactional fixes rather than addressing the deeper human needs.
- Americans are embracing flexible work—and they want more of it. (2022): Nearly 90% of 25,000 working Americans said they would use workplace flexibility when offered. Meeting the need for balance between flexibility and financial commitment is challenging for some organizations.
- Flexible work survey: Is your organization ready? (2023): A study of 50 workplace executives found that many leaders were preoccupied with debating the number of days required in the office rather than focusing on their strategies and capabilities.
- Some employees are destroying value. Others are building it. (2023): Employee disengagement and attrition could cost a median-sized S&P 500 company between $228 million and $355 million annually. "Thriving stars" – the most engaged and high-performing employees – excel in hybrid and remote models.
- Hybrid can be healthy for your organization—when done right. (2024): Completely remote companies like GitLab demonstrate exceptional organizational health with clear values, transparent decision making, and intentional ways of working. Effective leadership commitment to work practices is a necessity for any workplace arrangement.
As a whole, these studies point to the ongoing challenge organizations face in improving work effectiveness and reducing burnout across all workplace models.
McKinsey's Latest Report: More Office, Same Problems
McKinsey's most recent report suggests that policies requiring employees to work together more often – in the office – have not resulted in significant gains in workplace effectiveness.
Even though the percentage of employees working 4+ days in the office has doubled since 2023, nearly 39% still intend to quit, particularly Gen Z employees. Burnout remains a concern, with Gen Z workers reporting higher rates.
Contrary to popular belief, employees across all work models report similar satisfaction levels, proving that bringing people back in person doesn't necessarily enhance engagement or retention.
However, leaders consistently overestimate the maturity of their organizations regarding essential workplace practices, resulting in a disconnect between leaders' views and their employees' evaluated expectations.
A Blueprint for High Performance
McKinsey's report highlights five key practices that drive productivity and engagement in all workplace models:
- Collaboration: Effective teamwork requires intentional structures, not just physical presence. Employees ranked goal alignment as the most critical factor for role and strategic clarity.
- Connectivity: Meaningful interactions, especially with leaders, are essential. Unfortunately, leaders often underestimate its maturity, while employees want more positive interactions.
- Innovation: To achieve a competitive advantage, companies must foster a culture of knowledge sharing, rapid iteration, and permission to fail.
- Mentorship: Effective mentorship requires both formal and informal interactions, but on-site employees expect more immediate and direct mentoring relationships.
- Skill Development: A culture of continuous learning involves formal training but needs to progress to comprehensive reskilling and upskilling to support flexible career paths and digital transformation.
Leaders and Their Responsibilities
No matter the workplace model, employees have become accustomed to the power and flexibility of choice. Leaders must now shoulder responsibility for providing a positive work experience that advances employees' wellbeing and development.
Investing in collaboration, connectivity, innovation, mentorship, and skill development is essential – regardless of the location. By prioritizing a healthy work environment that supports high-performing teams, leaders can mitigate risks of burnout and employee dissatisfaction.
- The McKinsey & Company study suggests that leaders need a clear vision for making hybrid work sustainably successful, as employees in remote and hybrid models are open to workplace flexibility.
- The ongoing challenge for organizations, as highlighted by McKinsey's research, is improving work effectiveness and reducing burnout across all workplace models, including hybrid and remote.
- McKinsey's latest report suggests that office mandates, requiring employees to work together more often, have not led to significant gains in workplace effectiveness, with nearly 39% still intending to quit, particularly Gen Z employees.
- Effective teamwork, as highlighted by McKinsey, requires intentional structures, not just physical presence, with goal alignment being the most critical factor for role and strategic clarity.
- To foster a culture of innovation, companies must encourage knowledge sharing, rapid iteration, and permission to fail, as suggested by McKinsey in their report on driving productivity and engagement in all workplace models.
- Leaders need to invest in collaboration, connectivity, innovation, mentorship, and skill development, regardless of the location, to provide a positive work experience and advance employees' wellbeing and development.
- Despite leaders consistently overestimating the maturity of their organizations regarding essential workplace practices, a healthy work environment that supports high-performing teams can help mitigate risks of burnout and employee dissatisfaction.
