A previous version of this article was published in June 2021 by the Portland Business Journal.

The hybrid model will likely replace conventional workplace norms, evolving how companies manage business operations, employees, and the client experience.

Before the COVID-19 pandemic, many companies had limited work-from-home policies. However, the remote workplace has uncovered unexpected operating efficiencies—and many businesses want to retain and improve upon them to attract talent and boost financial results.

What’s a Hybrid Workplace?

A hybrid workplace is a developing norm that combines in-office and remote work, letting employees manage their own workflow while having opportunities for in-person collaboration.

Hybrid workplaces also offer greater cloud-services adoption, stronger security infrastructures, and enhanced collaboration tools. This makes them better equipped to be on-demand and provide employees greater flexibility to work based on their availability.

More importantly, they allow offices to become collaboration sites that are solely intended for team building and innovation.

Did COVID-19 Accelerate the Transition to a Hybrid Workplace?

COVID-19 forced many businesses to rethink their strategies. Most companies weren’t prepared to be fully remote in March 2020, but the pandemic required they adopt new business approaches, leverage new technologies, and enhance their cybersecurity infrastructures.

The good news is that many companies did this successfully. Now, they can more easily transform their remote offices into strategic hybrid workplaces by retaining the successful parts of remote work while incorporating in-person interactions.

The pandemic also changed the perception of remote work; it’s no longer a privilege, and it’s built into many job descriptions. This creates a new level of employee engagement and expands the pool of potential employees and employers.

What Are the Pros and Cons of a Hybrid Workplace?

A hybrid model provides clear benefits and challenges for employers and employees alike.

Benefits

Convenience and flexibility. Employers can offer flexible working options, providing their employees with the perks of remote and in-office work settings.

Cost effectiveness. If fewer people use the office on a regular basis, companies can cut back on office size and accommodations. This can greatly impact financial results over time.

Efficiency. Employees can go into the office for meetings and stay home to complete work or meet family or personal needs.

Increased options. Companies have a larger hiring pool; however, remote employees also have more options, so companies must have competitive offerings.

Productivity. Employees are often more productive when working remotely—they can focus in their own space without being interrupted by colleagues dropping by their desk.

Consequences

Creativity and collaboration. In-office environments enable on-demand collaboration, impromptu interactions, and quick decision-making.

Equipment and comfort. Equipping employees to work from home can be difficult. Having the right computers, desks, and internet accessibility is key for productivity.

Site visits and client interactions. A remote model can inhibit effective interactions, which can impact client relationships, team building, and productivity.

Training. Apprenticeship models are more difficult without side-by-side learning and collaboration. This can extend the onboarding process and potentially slow career progression.

Does a Hybrid Workplace Impact Cybersecurity?

The hybrid workplace’s work-from-anywhere model adds new complexities for companies that need to securely maintain and access employee, customer, and supplier data while remote. To make this possible, companies need to adopt more stringent cybersecurity practices by:

• Providing employee fraud-awareness trainings
• Performing more regular penetration testing
• Increasing robotics and automation adoption

How Can Employers Improve Staff Experience in a Hybrid Workplace?

Finding ways to build relationships, mentor and coach employees, and train new hires is key to employee satisfaction within a hybrid model. Team leaders will need to find creative ways to connect with and support remote employees, such as:

• Holding consistent team check-ins and career progress meetings
• Offering continuous education opportunities
• Promoting no-camera days to limit video-meeting fatigue
• Providing management trainings on how to support a remote workforce

On a broader scale, companies will need to revisit their total rewards programs, outlining the health and wellness benefits a remote workforce offers. They can also provide subsidies for  proper office setups that include docking stations and ergonomic desks and chairs.

How Does Remote Work Impact Compensation and Taxes?

Remote work creates new challenges around compensation and taxes. For companies located in cities with a higher cost of living, paying a high salary to an employee who relocates to a low-cost geography can lead to inequitable compensation.

Tax Considerations

With local governments needing to sustain tax revenue, personal taxes are under heavy scrutiny—employees may take on more tax liability than they realize.

Also, following South Dakota v. Wayfair, Inc., companies must be aware of state legislation that leads to unforeseen income, payroll, sales, and personal property taxes. These include:

• State nexus and foreign-permanent establishment. Employers often must file additional tax returns and make US foreign-activity disclosures for employees in foreign jurisdictions.
• Employee multistate filings. Out-of-state employees may need to file personal income tax returns in multiple states. 
• Home-office programs. Employers that subsidize employees’ home-office equipment may need to pay personal property taxes in various states and counties. 

While these considerations can create liability and compliance challenges, employers can limit tax complications by preparing in advance.

Next Steps

When implemented strategically, hybrid workforce models introduce new, cost-effective ways for companies to boost employee engagement and productivity. To learn more about how your company can successfully adopt a hybrid workforce model, contact a consulting professional.