Firms enforcing office-only work face higher staff turnover

New research from the International Workplace Group indicates that companies reducing workplace flexibility are experiencing higher employee turnover.

A study by the group, involving over 500 in-house and agency recruiters, has shown a significant increase in job searches among employees in companies that mandate a weekly five-day office return. As a result, two-thirds (67%) of recruiters have observed more candidates seeking new positions away from such companies.

The study further reveals that three-quarters (75%) of recruiters have had candidates decline job offers that do not provide hybrid working options. This suggests a clear preference for flexible working arrangements among job seekers today.

Employees seem to favour working arrangements that allow them to operate from local flexible workspaces or satellite offices, with 55% feeling more empowered under such schemes. The increase in demand for flexible work options is also reflected in the comments of Dom Ashfield, an SAP Specialist Recruiter at bluewaveSELECT, who said: "Jobseekers are no longer just looking for a paycheck; they want the freedom to shape their work environment. The demand for flexible and hybrid work models is growing rapidly, and employers who don't adjust their policies risk falling behind in the talent race."

Separate research among white-collar workers facing daily commutes to city-centre offices highlights further potential issues for employers enforcing rigid attendance policies. Nearly half of these employees are actively seeking jobs not demanding such commutes, and 63% believe their current employers risk losing their best staff due to inflexibility.

Mark Dixon, CEO and Founder of International Workplace Group, addressed these concerns, stating, "Flexibility is no longer a nice to have for employees. Many will not consider new roles that require long daily commutes, they want access to workspaces closer to where they live in an environment that allows them to remain motivated and productive."

The study underscores the negative effects that long commutes and lack of flexibility have on employees' mental health, financial wellbeing, productivity, and relationships. It also demonstrates a greater inclination among employees to work nearer to home, with 77% indicating that proximity is a crucial factor in considering job changes.

Despite these preferences, a minority (25%) of employees felt the need to be in a central location five days a week to perform their roles effectively. A further 55% said they would feel more empowered if allowed to work from various locations, reflecting significant frustration over perceived lack of trust from employers.

This issue of inflexibility is not confined to Australia. Research by Stanford academic Professor Nicholas Bloom indicates that companies mandating rigid attendance could experience increased quitting rates by as much as 35%. He predicts potential policy reversals by some organisations, such as Amazon, by mid-2025.

Mark Dixon also highlighted productivity benefits linked with hybrid working, stating, "Flexible working offers benefits to businesses far beyond employee retention. The hybrid model is proven to boost workforce productivity and job satisfaction while also cutting costs significantly."

The overarching theme from both International Workplace Group's research and the commentary from industry leaders suggests a burgeoning preference for hybrid work models. Organisations may need to adapt to this growing demand for flexibility to stay competitive in attracting and retaining talent.