Ever since Microsoft announced in early October its intention to let more folks work from home post-pandemic, “hybrid workplace” has become a business buzzword. Hybrid workplace policies allow for a more flexible work arrangement, with some employees working from home, others in an office and perhaps some coming in for specific situations and/or a designated percentage of the time. Companies are realizing the lower real estate costs and productivity benefits of remote employees and wanting to capitalize on the trend but without fully ditching in-person interactions.
This shift isn’t as simple as tossing employees laptops and setting up a few virtual happy hours. It will require changing how companies think about employee performance, culture, connection, hiring and skills. To explore these effects, Brainyard reached out to Bradley Killinger, CEO of Sapience Analytics, an analytics company that provides real-time workforce insights, to get the lowdown on the hybrid workplace — and how data is destined to play a big role in it.
Brainyard: Can you explain how the hybrid workplace has evolved to this point and where you see it going?
Bradley Killinger: So I think of a hybrid workplace in two phases. First, there was life before COVID-19. You had companies like [Sapience] that were out trying to pitch a proposition to companies that they could lower their real estate costs and drive higher employee engagement by moving several different types of roles to work from home. And we often got a lot of resistance with companies saying, “No, we’ve made all these investments [in our office]” or, “If we can’t see our employees, we have to assume they’re probably not working.”
And then COVID happened. Over a billion knowledge workers were shifted from their office to their homes. Our original hypothesis was really put to the test, but at scale.
I think we’re going to come out of a pandemic with something completely different where companies are going to divest out of [much of their] real estate. You’re going to have a lot of employees that are going to demand that they can work from wherever they want to. And I think that’s going to be a winning proposition for both sides. I think the million dollar question is, how do you actually pull that off?
The software management systems you have currently set up in most companies have a lot of big gaps that are going to make fulfilling that reality a challenge, but it’s absolutely doable. This hybrid model, or new way of working, is going to emerge [on a larger scale] 6 to nine months from now. Frankly, across our client base, we’re seeing pretty dramatic moves where companies are really starting to take action, and that will have long-term impact as they go forward.
BY: What are the pros and cons of the hybrid model?
BK: I think the pros start at the massive opportunity for companies to reshape their cost model. If you look at most companies, real estate is going to be their second or third biggest cost item. On the pro side for employees, as they become more comfortable with working remotely, that obviously offers a lifestyle where they aren’t commuting and have more time with family.
I think the negative of this is that we’re seeing across the board in our global customer set that the managers of the past are not necessarily equipped to manage in this world. Work traditionally has been the idea that workers congregate in a centralized location. You have a handful of managers that might peek out their doorway and manually verify that an employee is in their cubicle and getting work done. I think the managers of tomorrow will require a much different skill set.
BY: In terms of employee management, are there considerations for companies debating the move to a permanent hybrid model?
BK: I know we are seeing the question around culture in our business right now. How do you maintain whatever your culture is in your company when everyone is at home? People are losing that personal connection. And this mixes in to employee engagement and employee morale. So how do you unite and get people into a common mission when they feel isolated?
We’re trying a whole assortment of things. We’ve hosted virtual wine tastings and are doing a monthly little television series called “Coffee With Killinger” where we bring in one to two employees to talk about non- work-related topics. I think there are new ways [to foster culture and engagement] that are going to emerge from the hybrid model, but it is something for companies to plan for.
In the same vein as culture comes the question of hiring and onboarding. It’s going to involve getting many more levels of engagement in the hiring process to really be able to vet candidates. Our company has hired 12 people through the pandemic. Our struggle has not been finding the right talent, but actually how to get them onboarded. And just as much as managers are unsure about team performance, I think employees right now are just as concerned considering the state of the economy and unemployment.
|How do you get new employees trained?|
|How do you help them feel like they’re part of your culture and the vision you’re trying to build?|
|How will you communicate with them?|
|How will you explain their role and tasks to them?|
|How will you validate that they’re doing their assigned tasks?|
|Do you have a data- or fact-driven methodology to ensure they’re doing the right task at the right time?|
|Do you have a way to facilitate continuous, two-way feedback?|
The biggest issue right now that we see with our customers has been around employee burnouts in remote work. That is where we are spending a lot of time. We have almost a trillion hours of data with information by location, by industry, etc., and when we analyze these anonymous work patterns, we’re seeing that there is over an hour of extra work a day being applied by employees [than before the pandemic]. So if you think about it, the hidden capacity that has been found in the system is tremendous — but what it really means is that companies are doing a very poor job of delineating or building walls between personal time and work time. And so that issue of burnout right now has been top of mind because there’s zero question that people are working far more hours right now and producing far more than they did in the pre-pandemic world, which is extraordinarily problematic if it pushes employees out of the company.
Ultimately, I think there are several things that companies need to focus on to be successful in the new hybrid model:
I think companies that handle those five things are going to gain a huge competitive advantage and really be able to excel in this new hybrid model, because ultimately it comes back to happy employees.
BY: From an infrastructure perspective, are there things that companies need to consider?
BK: There is a whole rethink of the infrastructure required to send employees to work from home. How do you arm them with the actual machines they need, with the software builds they need, with the right equipment to be productive at home on a permanent basis? But that doesn’t necessarily mean it’s going to be more investment.
We’re working with our clients to look at their data of their software asset utilization and hardware utilizations. For instance, one of our largest client’s top five software costs made up 80% of their software spend and had a 90% usage rate in the office environment. With employees working remotely, those costs were still making up 80% of the software spend — but only had 7% utilization.
Analyzing the data allows businesses to create a picture of how the work gets done and determine the investments they need to make in order to get that work done in the most efficient manner. It is definitely going to be a reallocation. Every customer we’re working with right now is going through some degree of analysis to try to understand what infrastructure they will need to be successful in this new hybrid model.
Assessing the Business Tax Implications of Having Your Workforce at Home: Aside from employees’ locations, also consider the potential implications of sales and use taxes, tangible personal property taxes and credits and incentives.
BY: Which skills do you think managers in the hybrid workplace will need?
BK: I believe that, first and foremost, managers will need to be open to analyzing and accepting data. It’s kind of a new human capital currency. I think companies used to pick managers that had some of the ability to understand the numbers and operations, but a lot of those management decisions were made upon their ability to have the right gut instinct or to maybe be an in-person persuader. And if you take that out of the equation and take the fact that they might not be in front of large amounts of people in-person for extended periods of time, then you have to get to where you have more operationally-thinking people that are able to analyze and apply the data across the business in a very humane, practical way.
“I think companies used to pick managers based on ability to have the right gut instinct or be an in-person persuader. But if managers aren’t in front of people for extended periods of time, then you have to have more operationally-thinking people who are able to analyze and apply data across the business in a very humane, practical way.”
I think management at companies used to be decided upon tenure. I think in the hybrid workplace of tomorrow, it will be based on a little different of a skill set and those who are comfortable working in a truly digital, transformed world [will land management roles].
I think [the transition in management style] is going to be a difficult road for companies because you’re not going to have the old tools available. Report #1 was always swipe in, swipe out data. Report #2 was a manually-created timesheet where an employee reported what they claimed to have done the last week. And then managers would get a gut feeling from being in the office if everything seemed right to them. But in the hybrid workplace, you’re going to be flying with quite a bit of blindness through the organization because you can’t physically verify. But, at the same time, just because someone is on conference calls doesn’t mean they’re driving productive values for your business.
Lastly, we did a survey across our customers and, by the end of this year, 32% of their workforce is going to be coming from a contingent workforce. In the last eight months, companies haven’t been able to get into things like their production studios, and so they are tapping into gig workers who can create the content — and the product coming back is phenomenal. So it’s changing the way they view the alternative workforce. Thus, a third of pretty much every organization is going to be made up already of a disparate workforce around the globe. And if that trending continues, as we expect it to and as our customers are saying, that adds another layer of complexity. I’m not sure that current managers have experience dealing with it. And it becomes a very big question in this hybrid model.
So, I do think that the managers of tomorrow that are successful in the hybrid model are going to be quite a bit different than those who were strong managers in the old way of working.
|Manager of the Past||Manager of the Future|
|Determined by tenure||Determined by proficiency in a specific skill set|
|Managing employees in an office||Managing a dispersed workforce|
|Strong in-person communication skills||Strong digital, operational and analytical skills|
|Gut instinct||Analyzing data like output and utilization|
BY: How can a company determine who should be in an office and who should be remote in the new workplace?
BK: In the short term, I think most everybody is going to be governed by whatever the local laws or ordinances are. However, in the long term, one of the things we’re seeing and are seeing through our customers is there are certain segments of jobs — like finance, accounting, sales, HR, public relations, call centers and some operations — that are going to be working from home 90% of the time, if not more, on a permanent basis going forward.
I think the one area where we’ve struggled and our customers are struggling are the jobs I call “maximum creativity.” So for those writing software, creating different design items, or things like that, how can we provide an office experience where they can still collaborate and do those innovative, big things that seem to only happen when you have a group in a room bouncing ideas off each other? So you can assume that there are huge chunks of the business that may work from home indefinitely, but you’ll likely still have to have some places where you can bring together parts of the business that still need to be extremely creative and collaborative.
BY: Does employee sentiment play a role in who works from home and who comes in?
BK: Yes, across the HR spectrum right now, they’re constantly running questionnaires or surveys about employee comfort level. For instance, offices opened again recently, and I think the worst case scenario is losing a great talent because someone wasn’t comfortable returning. So we are taking a big cue from the employees themselves.
Post-pandemic, we are going to keep running not only those surveys but also our mood pulse offering, which captures sentiment and engagement on a daily basis and correlates it to productivity. Not everybody is equipped to work from home, and not everyone has the right mindset, as it can be lonely and isolating. Companies have to invest in technology to capture those engagement levels and sentiment consistently, not just in a quarterly check-in.
BY: How does analytics and data play a role in the hybrid workplace?
BK: The hybrid workplace is going to be a complete rethink. Number one for me is companies having a common and transparent set of data and analytics from which new performance measurements can be performed. Since you can’t have manual verification [of productivity], you better have hard data that allows you to fully understand your distributed workforce. You need to have this both ways though, not just for the employer. The employee needs the same transparency and access to data.
If we look at our customer set, we’re seeing a move toward the concept of, “All the data the manager gets, the employee gets.’ And I think over the next year, that trend is going to become very prevalent in the hybrid workplace. And when you start thinking in those terms, the employee is going to be as armed as a manager. This idea means total transparency.
“We’re seeing a move toward the concept of, ‘All the data the manager gets, the employee gets.’ And I think over the next year, that trend is going to become very prevalent. And when you start thinking in those terms, the employee is going to be as armed as a manager. This idea means total transparency.”
So, for instance, let’s say an employee is told at the end of the year that they were ranked a “3.” If the employee questions that rating, the response they would get is usually rooted in gut instinct and not backed up by the data. They might get a vague, “Oh, you fell short here and you might’ve done things differently here.” That way won’t fly in the hybrid model when you might see some workers every day in the office and rarely see other ones. Using a data-based approach instead of an instinctual one, the employee could say, “Here is my utilization. Here are my output numbers. Here are the exact contributions I made by week, by month, by year, etc.” Or, vice-versa, the manager could do the same and point towards the data to validate their rating.
Taking the “gut instinct” out is one of the biggest shifts in the workplace. I’ve been working for almost a quarter of a century, and it has always been this gut instinct model. And what we are doing here to change that is a really big deal.
Brad Killinger is CEO of Sapience Analytics, a leader in the people analytics space. His leadership expertise has helped propel Sapience Analytics to achieve its growth goals of 500% in 20 months. He is passionate about continuing to promote Sapience Analytics’ disruptive technology within the marketplace by communicating its unique value proposition.
Brad prides himself on being a great listener who truly hears people. Prior to joining Sapience Analytics, he served in several key global leadership roles at major technology companies, including IBM, Oracle and Unisys. He holds a bachelor of arts degree in economic geography from the University of Washington College of Arts and Sciences.
He is strongly committed to philanthropy in both his personal and professional life. Brad is active in community service through youth sports organizations and is an ardent supporter of charitable groups that help U.S. veterans and active military members. He also is proud that the Sapience Analytics team has been dedicated to helping enrich the local community and environment by planting hundreds of trees in the Dallas metro area as part of one of the world’s largest conservation projects. Brad lives with his wife and six children in Plano, Texas.