The excitement around remote and hybrid work over the past four years has prompted us to examine the real impact on productivity, individual growth (or lack thereof), equity across roles, and company profits. As we explore new work realities with our clients, we’ve observed that office trends fall into four broad categories—and each has its own pros and cons. Our research and analysis have revealed some connections between these evolving work models. Here’s what we’ve learned.

The flexible hybrid model

This model allows employees to choose their preferred work location (home or office) and their working hours, with no fixed office days. This method theoretically creates a high degree of flexibility, which should lead to higher employee satisfaction and a better work-life balance. It promotes trust and autonomy, which in turn can increase productivity and job satisfaction.

However, with independence and flexibility come significant coordination challenges for management as they must keep track of employee schedules and integrations. Not only does this create logistical challenges, but we have also found that it limits spontaneous collaboration and conversations.

Additionally, it is difficult to manage and assess a company’s need for office space with varying working hours, which can prove costly to the bottom line. We have observed in some organizations that this negatively impacts employee equity (i.e. who can work from home and who can’t and why). This impacts resources and, depending on where the work is located, can affect employee advancement opportunities.

The fixed hybrid model

In this model, employees work in the office on certain days and at home on certain days. Despite arguments to the contrary, people instinctively like routines and structure. This model provides a fixed schedule that can help balance collaboration and individual work. It reduces logistical coordination and ensures regular face-to-face interaction, which can have a positive impact on team coordination and company culture.

On the other hand, however, this method generates a certain level of dissatisfaction among employees due to its rigidity. Especially with fixed working hours, employee flexibility is limited, which often leads to employees feeling like they are losing their autonomy over their work environment. In addition, when employees are not in the office, the space is underused or simply not used at all, calling into question profitability.

Office-first hybrid model

In this model, the office is the primary place of work, but employees have the option to work from home one or more days per week. We have found that this more traditional model is more likely to foster a strong office culture while providing opportunities for casual encounters, creativity and business integration, while still allowing the employee some flexibility to take care of personal or family matters.

Of course, this model also tends to favour the way we worked before COVID-19. This can be a disincentive for some of the younger generations, as they may feel that the model does not offer enough flexibility and autonomy, impacting morale and productivity.

Remote-first hybrid model

In this model, remote work is the norm, but employees can come to the office for specific occasions, such as team meetings, project launches, or company events.

As commute times and housing costs increase and it becomes increasingly difficult for employees to find housing in the city, this model offers maximum flexibility for employees and allows the company to draw from a larger pool of talent across a larger geographic area. Depending on management’s stance on telecommuting, overhead costs may be reduced.

However, with this model, we have found a sense of isolation and lack of employee engagement, leading to a lack of loyalty to the company. This model tends towards employee mobility and a perspective of “who can pay the most” and “offer the most flexibility?” There seems to be little attention to the qualitative elements of an organization that can influence company culture. Onboarding, onboarding and training new employees in a fully remote environment also proves to be challenging.

Communication can also prove difficult as it is an art to convey different messages effectively and clearly and to conduct training on leadership development and mentoring of new employees. This ineffective communication can lead to misunderstandings and dissatisfaction among the new employees.

Analysis of costs and impacts

Each work style has its advantages and disadvantages and can impact a company’s bottom line differently. In the flexible hybrid model, poorly managed schedules lead to inefficiencies and potentially higher costs due to unused space and missed schedules or critical deadlines.

In the Fixed Hybrid Model, we have seen higher employee turnover due to rigid schedules and workflows. This impacts the final product and employee turnover, which in turn results in higher recruitment and training costs. The company culture also suffers from the revolving door. In addition, we still have underutilized real estate, which incurs maintenance and operational costs for unused facilities.

In the Office First model, the facilities are in place, so the operational and maintenance costs are high. There is debate that this model offers less flexibility, resulting in lack of employee engagement and lower productivity. We have seen overall positive results in terms of employee engagement and collaboration, provided the company offers employees the flexibility to manage personal matters. We have seen higher equipment and technology costs in this model, as companies provide tools to employees both in the office and at remote locations.

And then there’s the remote-first model. We’ve seen examples where a spontaneous business issue requires attention, but the inability to coordinate schedules not only results in lower productivity, but also slower resolutions than other models. Technology costs are higher in this model than other models, and we’ve seen a greater lack of engagement and loyalty that impacts company culture. Subsequently, this creates more cost and time for the management team to resolve these areas of dissatisfaction or communication issues.

We have clients using each of these methods with varying degrees of success. The success of these alternative work models depends on several factors, including whether a company is publicly traded or private, where it is headquartered, the industry it operates in, and the leadership perspective of the management team.

The Fixed Hybrid Model appears to be the most common practice. We have seen an acceptance from employees who like the adaptability and flexibility of this model. Although this model is still under development, we are monitoring the ultimate impact on profits and culture, which has yet to be quantified.

As telecommuting and the flexible workplace continue to mature and evolve, we believe CEOs and other leaders must consider their options from the perspective of individual company performance and their strategy, culture/brand, HR, operations, finances and other business drivers.

Scott Morse, editor at D CEO Real Estate, is co-founder and managing partner of Citadel Partners.