Hybrid work is a win-win for employees and employers, with potentially massive productivity gains and improved retention coupled with wellbeing and lifestyle benefits, a new report has found.

The International Workplace Group and global engineering consultancy Arup have released a new report looking at how hybrid work – where employees are able to work from home and from another location such as an office or co-working space – can boost productivity and the wider economy.

International Workplace Group CEO and founder Mark Dixon said the research demonstrates the “compelling productivity gains of hybrid working”.

“When businesses give employees the freedom to work closer to home in well-equipped spaces without the need for longer daily commutes the results are clear: better focus, fewer distractions and improved work-life balance, all of which translate into meaningful productivity gains,” Dixon said.

“These benefits, when scaled, have the potential to deliver billions in value to economies around the world.

The report includes research from the National Bureau of Economic Research, which looked at how much time saved from reduced commuting is reallocated to work, and an Economic Impact study on how much time is lost to distractions when working from an office.

It found that contrary to some concerns that workers are less efficient when working from home, hybrid work actually brings with it major productivity gains.

“Put simply, it’s a win-win for both companies and their teams. Employees are more engaged with an improved work-life balance, while businesses benefit from higher productivity, lower real estate and recruitment costs and, ultimately, a happier workforce," Dixon said.

The study included a survey of Australian employers, with nearly half saying they had noted higher employee retention rates when flexible working arrangements were in place.

The employers also reported more than 40 per cent better wellbeing amongst workers who were able to work flexibly.

It found that hybrid work can reduce voluntary turnover rates by 15 per cent in Australia.

The productivity opportunity

Thanks to shorter commutes, fewer distractions and more time to focus, hybrid work can also boost productivity, the study found and could boost the Australian economy by up to $18 billion over the next decade.

It found that workers are spending up to 40 per cent of the time they’re saving on commuting on completing more work.

And workers who were allowed to work flexibly reported “excellent” productivity rates nearly 70 per cent higher than those just working from home.

The rise of the hybrid worker

Hybrid work has exploded in popularity following the COVID-19 pandemic, which saw many employees work entirely from home for extended periods of time.

Dividing work time between home and an office is a new approach trying to balance the benefits of working from home and a workplace in the interests of all parties.

A study from earlier this year found that more than 80 per cent of surveyed CEOs and CFOs believe hybrid work is an important cost-saving strategy, with more than three-quarters saying it has helped to reduce overheads and operational expenses.

It has also been found to have huge wellbeing benefits for workers.

Research has found that those able to work in a hybrid fashion take fewer sick days and are more able to access preventative healthcare treatments.

This is especially pronounced for younger workers, dubbed the “hybrid generation” who have reported that they would quit en masse if they are forced to return to the office full-time.

The Productivity Commission also released a report recently that found that working from home is not to blame for Australia’s persistent productivity woes.

It instead reported that working from home is often advantageous to productivity and cannot be blamed for any decline in it.