21 min read
Jun 21, 2021
Trends

Despite the Challenges, Small Businesses Are Embracing Hybrid Work

Many companies see a hybrid approach blending in-office and remote work as the way forward after COVID-19. But new GetApp research reveals that small businesses need to commit to major changes and avoid misconceptions for this model to actually succeed.

B.W.
Brian WestfallPrincipal Analyst

In 2020, small businesses made a rapid shift to remote work out of necessity due to the COVID-19 pandemic. With an end to the crisis in the U.S. seemingly in sight, and a newfound fondness for working from home, where are small business employees going to work in 2021 and beyond?

Now we know. Following the likes of Google and Deutsche Bank, many small businesses are pivoting to the much-hyped hybrid work model: an approach that allows employees to split their time between working on-site and working remotely (usually from home).

That’s according to our GetApp Hybrid Work Survey*, where 70% of decision-makers at small businesses currently using a hybrid work model say they plan to remain hybrid when the pandemic is over. 29% that are currently working remotely and 12% that are currently working on-site will join them—marking a shift to hybrid work the likes of which we’ve never seen before.

Small business work model plans after COVID-19 pandemic

The benefits of hybrid work are clear: It gives employees the flexibility they exceedingly crave and allows businesses to literally get the best of both worlds when done right. But can it be done right? What results can hybrid small businesses expect to achieve, and what challenges will they face in getting them? 

In this report, we’ll analyze the findings from our survey of hybrid small businesses to find out. If you’re a small business leader planning on going hybrid, keep reading to learn how you can make this new way of working work for you (spoiler: it’s not as easy as it may seem).

Key takeaways from GetApp's hybrid work survey

Small businesses face significant challenges with hybrid work

Key finding #1: Small businesses say going hybrid has been beneficial, but their results say otherwise

The excitement surrounding hybrid work is warranted. We know from our survey data that small business employees don’t prefer to do all of their work in the same place. Employees prefer to do some activities (such as attending a company meeting) remotely, and other activities (such as doing group work) on-site. For other activities—such as giving a presentation—employee preference is practically split down the middle between on-site and remote.

Where small business employees prefer to do critical work activities

Instead of forcing employees to choose one location or the other, the hybrid work model gives each employee the freedom to pick the location that best aligns with their preferences and job requirements. Employers, in turn, get a happier workforce, a less costly and crowded office space, and the ability to recruit top remote talent from anywhere. 

Again, hybrid work makes a lot of sense, and those that have already gone hybrid claim they are reaping the rewards. In our survey, a majority of both decision-makers and staff employees at hybrid small businesses say that hybrid work has had a positive impact on the organization.

Impact of hybrid work model on small businesses

But this perception of success doesn’t tell the whole story. As exciting as the hybrid work trend is right now, small businesses are reluctant to commit to the model long-term unless it produces similar or better talent management results compared to them being 100% on-site or 100% remote—regardless of what employees prefer. 

And it’s here where the cracks in the facade of hybrid work start to appear. When we asked small business decision-makers to rate their company’s performance on a scale of one (poor) to seven (excellent), those at hybrid businesses rated their company slightly worse on average than those at 100% in-office or 100% remote across a variety of important success metrics.

Average rating of talent management performance (by work model)

Though this dip in performance can be small in some cases (as little as 7% in the case of learning and development), the fact that hybrid work didn’t win out in a single metric in our survey is concerning. Instead of getting the best of both worlds, are hybrid businesses getting neither from either? 

Some of this we can blame on inexperience: Nearly three-quarters (74%) of hybrid small businesses in our survey say they switched to the hybrid model due to the COVID-19 pandemic. With less than a year of this new work model under their belt, it makes sense that many small businesses haven’t unlocked its full potential. But it also means small businesses have their work cut out for them if they want hybrid work to succeed.

Key finding #2: Top challenges of hybrid work are maintaining productivity and collaboration

To understand what obstacles are getting in the way of hybrid work success, we asked decision-makers and staff members at these organizations to tell us the top challenges they were experiencing with hybrid work. Two complaints rose to the top from both groups: Maintaining productivity and having effective communication and collaboration.

Top small business challenges with hybrid work model

Increasing productivity is a key motivator for small businesses to go hybrid—it was the top cited reason small businesses in our survey switched to the hybrid model aside from COVID-19. So the fact that hybrid businesses are running into challenges with productivity is a huge red flag.

Gartner research supports this finding though and puts the blame on companies taking shortcuts in their shift to hybrid work. Instead of creating new practices from scratch, Gartner found that hybrid businesses tend to “virtualize” their existing on-site practices in an attempt to bring the visibility and serendipity of office life to remote workers. As a result, these businesses put a heavy emphasis on things such as employee monitoring and endless video meetings, which means that workers quickly become fatigued, and productivity declines.

“Force-fitting a design created for a different environment exacerbates fatigue, and fatigue impacts many talent outcomes. When employees experience high levels of fatigue, employee performance decreases by up to 33%, feelings of inclusion decrease by up to 44% and employees are up to 54% less likely to remain with their employer.”

Gartner, Press Release

In a similar way, companies that rely solely on their existing video conferencing tools are finding that these products lack the features to support good hybrid collaboration by themselves. Peer-reviewed research published in March 2021 found that these tools can promote speaking inequity (where collaborators don’t speak as frequently or for as long as they would naturally), which reduces the collective knowledge and collaborative capacity of the group

Overall, we see a pattern emerge: Hybrid businesses struggle when they bend existing practices and technology to the hybrid work model, rather than creating new policies and implementing new technology that’s catered to it.

Key finding #3: Leaders and staff don’t see eye to eye on best hybrid policy

Though small business employees at the top and bottom of the org chart agree on common hybrid work challenges, we found they disagree on the best approach to hybrid work. We presented the decision-makers and staff employees in our survey with five common hybrid work setups:

  1. At will: Every employee can choose where they work during the week.

  2. Work-based: Employees either work on-site full time or work remotely full time (based on job requirements).

  3. Split-week: All employees work on-site part of the week and remotely part of the week.

  4. Remote first: Remote work is the default option aside from a handful of selected employees that work on-site.

  5. On-site first: On-site work is the default option aside from a handful of selected employees that work remotely.

When asked which one they preferred, staff employees most often picked the at will model. Decision-makers, on the other hand, picked the at will model the least. Instead, they preferred the work-based model.

Most preferred hybrid work model (decision-makers vs. staff)

While the at will model gives employees the most freedom and flexibility, it also requires an immense amount of trust from leadership —trust they might not be able to give so easily, especially in the case of new hires. This approach can also create an “in-group” of employees that prefer to work mostly on-site and an “out-group” of employees that prefer to work mostly from home, which raises concerns about visibility and inclusion

The more rigid work-based model has its disadvantages too. Not only can it force employees to spend all of their time in an environment that doesn’t work best with their preferences and needs, but employees may grow resentful of co-workers in other roles or departments that get to work in their ideal location. 

A mix of on-site and remote work strikes a better balance between these two extremes, but even here, decision-makers and staff employees disagree on the best solution. When asked how many days per week they’d prefer employees to work on-site, 69% of decision-makers said they prefer workers to be on-site at least three days or more. Meanwhile, 76% of staff employees say they’d prefer to be on-site three days a week at most.

Leaders and staff disagree on ideal hybrid work mix

Whatever hybrid direction small businesses decide to go in, effective communication from leadership regarding how employees benefit from the shift will be needed to prevent backlash or high voluntary turnover.

Five tips for hybrid work success

When some of the most well-established and beloved businesses in the world announce they’re going hybrid, it’s not hard to understand why small businesses want to follow in their footsteps. However, just because enterprises are finding success with hybrid work doesn’t mean small businesses will automatically succeed as well. Lacking the resources and expertise of bigger businesses, our survey results show that small businesses can run into real challenges with hybrid work that can impact employee and business performance.

To help ensure your company’s transition to hybrid work is a successful one, here are five tips:

1. Tailor your hybrid work policy to your company’s unique needs and priorities

Your small business will need to account for a variety of factors when deciding who will work where, and how often. When we asked small business decision-makers that are planning to go hybrid after the pandemic is over how they are making these decisions, a variety of factors were mentioned including job responsibilities, employee preferences, and even space limitations.

Top factors influencing small business hybrid work decisions

There is no one-size-fits-all hybrid work policy that will work best for everyone. If you want to dangle working from home as an incentive to boost productivity, you may decide to look at an employee’s performance. If you’re trying to downsize your office and save money, you may base your decisions on peak capacity. And if you’re trying to woo top talent away from competitors, you may let every worker decide where they work themselves (with some limitations).

Working with leaders in IT, HR, finance, and other important stakeholders, you should create a hybrid work policy that best balances the outcomes you’re seeking—then communicate your reasoning to your workforce when you announce the change.

2. Implement targeted technology upgrades

It’s no secret that technology makes the hybrid world go round, and our survey results confirm as such. Nearly three-quarters (71%) of employees at hybrid small businesses say they are moderately or extremely reliant on software and technology to do their job.

Hybrid employee reliance on software and technology

Retrofitting your current software stack for hybrid work is a poor solution though and will lead to employee fatigue and frustration. Instead, you should prioritize new technology implementations that are hyper-focused on the unique needs of the hybrid environment. Here are some examples:

  • Whiteboard software offers a step up over standard meeting or document platforms with features such as freehand drawing, project management support, and templated frameworks to aid in idea sharing between on-site and remote employees

  • Space management systems give facilities managers a birds-eye view of your company’s revolving-door workspace and allow employees to reserve limited desk and meeting spaces when they’re on-site

  • Cloud storage platforms are critical for hybrid employees, regardless of where they are, to be able to access, backup, and secure important data

Simply put, systems built for 100% on-site or 100% remote work won’t always suffice in a hybrid model. Replace or add-on to your existing software to ensure the needs of your hybrid workforce are more than met.

3. Rethink your current worksite

Hybrid work is presenting an ideal opportunity for small businesses to rethink their physical workspace. In our survey, nearly two-thirds (64%) of small business decision-makers that are going hybrid after the pandemic say they have already or will alter their current worksite.

How hybrid work plans impact current small business worksites

Besides the obvious cost savings that can be achieved by downsizing to a smaller space, you should use the shift to hybrid work to rethink both the setup and purpose of your space to drive better results. 

Activity-based working (ABW) is one way to drive innovation. In ABW, work spaces are designed specifically for different activities, and employees move around from space to space depending on what activity they’re doing. So-called “Zoom rooms”—small spaces equipped with A/V and sound-proofing equipment to improve the quality of video meetings—are a popular example, but you can design spaces for all types of work needs (e.g., head-down solo work, long-term group work, all-hands meetings). A 2020 study found that workplace satisfaction increased 17% on average after companies implemented ABW.

An example of an office layout using ABW

An example of an office layout using ABW (Source)

A more radical idea is to rethink your worksite as a place that’s barely about work at all. If your employees predominantly prefer to work from home, you can turn some spaces designed for work into areas where employees can attend training sessions, sit in on a guest lecture, watch a movie, do yoga, or have a drink with co-workers. Instead of increasing productivity, the goal of your worksite becomes creating an alluring space that promotes engagement, culture, and retention.

4. Address perceptions of inequality

If employees in your hybrid work setup spend disproportionate amounts of time on-site, there can be a perception that the more “visible” on-site employees are the ones more likely to get perks, desired work, and promotions. Research backs this claim: A 2019 study by the University of California, Santa Barbara found that being observed physically by others resulted in more positive outcomes for employees, even if those employees weren’t high performers.

Here are a few things you should do to quash any hint of impartiality between on-site and remote employees:

  • Promote remote work at the leadership level: If company leaders work remotely, it sends a strong signal that workers won’t be inadvertently punished for working remotely too.

  • Focus on outcomes of work rather than the work itself: With remote employees, you often only see the final product. On-site workers, on the other hand, benefit from visibly being seen working on projects throughout their lifecycle. By basing performance and promotion decisions on outcomes and data, instead of “how hard someone works,” you can avoid biased results.

  • Strike a balance with your perks and benefits: Surprise—remote workers want benefits too! If your perks and benefits are too office-centric, remote workers will feel like they’re missing out. (If you need help with this, check out “5 Great Perks You Should Offer to Remote Employees”).

5. Don’t fret about culture

In a recent survey from the HR Policy Association, 71% of HR leaders cited cultural transformation as a top concern in their post-pandemic work environment. Add in the fact that nearly one-third of hybrid workers (32%) in our own survey cite staying connected to the company culture as a top challenge of the hybrid model, and you might think you need to devote a ton of time and resources to maintain your culture when you go hybrid.

This is a misconception. In a survey of newly remote or hybrid employees, Gartner found that around one-third said their culture had changed due to the shift. More importantly, 76% of those who said their culture had changed believe it had changed for the better.

Instead of fretting about culture, focus on the technologies and policies that will best enable hybrid work at your organization.

Ready or not, here comes hybrid work

In 2020, small businesses had their hand forced on remote work due to a once-in-a-century pandemic. And in 2021, they may feel as though their hand is being forced once again. In our survey, a majority of small business employees (53%) say they are moderately or extremely likely to consider looking for a new job if they aren’t offered some sort of flexible work arrangement where they could work from home at least part of the time.

Likelihood to look for a new job if not offered location flexibility

It’s clear that if you don’t go hybrid or fully remote, the risk of top talent going elsewhere is very real. But even if your transition to hybrid work is employee-driven, that doesn’t mean your business can’t benefit long-term. Though there are unique challenges to going hybrid for small businesses, the payoff in engagement, retention, and simply embracing the future of work are worth it.

Survey methodology

*The GetApp Hybrid Work Survey was conducted in April 2021 among 503 decision-makers and 488 staff employees at small businesses in the U.S. with two to 250 employees. The goal of this survey was to learn about challenges, preferences, and outcomes related to the hybrid work model.

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