Bosses raise the pressure as work-from-home tension reaches ‘pivotal point’

Some of the country’s biggest employers are turning to an old tool to bring staff back to the office: bonuses.

As many large corporations sought to get more workers into city office towers in 2023, banking giant ANZ Bank, financial conglomerate Suncorp, and electricity retailer Origin Energy all said they would tie remuneration to office attendance for some staff. But some experts say the trend is risky.

John Hopkins, associate professor of supply chain management at Swinburne University of Technology, worries that linking remuneration to office attendance is rewarding the wrong thing.

Some companies are linking remuneration to office attendance for staff.Credit: iStock

“It does worry me a lot,” he says. “What’s the impact on an employee who’s working really well and hitting all their targets, but only averaging two days a week in the office, and therefore not getting a bonus? From an equity perspective, I think it’s very dangerous.”

While the hybrid work model has become a common feature in most office-based workplaces, there are signs of increasing forcefulness from companies looking to draw employees into the office including mandated time in the office and linking attendance to promotions.

ANZ, Origin Energy and Suncorp are among the first majors to tie remuneration to office attendance, although they say there are exceptions.

Team leaders at Suncorp develop “hybrid work plans” for their teams which reflect varying degrees of face-to-face interaction required by different roles. While there is flexibility for individual cases such as those who have moved out of town, performance reviews take into consideration whether employees have followed their hybrid work plan.

A Suncorp spokesperson said the move was intended to provide clarity and wasn’t specifically put in place to mandate office attendance.

“Our hybrid work plans only represent a very small percentage of an overall performance rating,” they said. “Where an employee isn’t able to meet the expectations of their team, leaders can work with them to develop alternate flexible work arrangements.”

Team leaders at Suncorp develop “hybrid work plans” for their teams which reflect varying degrees of face-to-face interaction required by different roles.Credit: FFX

In October, Origin also linked office attendance to its annual performance review process. A company spokesperson said that included “the modest expectation that our people spend a minimum of 40 per cent of their working month in an Origin office”.

Most staff at ANZ can work up to half of their time – averaged over a calendar month – remotely. If hybrid working expectations are not met, this may be taken into consideration in performance and remuneration reviews at the end of the next year.

“If you are one of our people who are yet to be spending more than half your time in the workplace, we need you to adjust your patterns unless you have a formal exception in place,” ANZ said in an internal email to staff.

ANZ employees with “exceptional circumstances” may be considered for a temporary period of greater flexibility of up to two months. Longer periods of flexibility require a formal exception signed off by several leaders.

Tech firms backtrack on working from home

These large ASX-listed companies aren’t the only ones ramping up the pressure on staff who prefer to work from home.

Many big employers in the technology sector – which embraced work from home during the pandemic – are now quickly and aggressively shifting their workers back into the office. Australian fintech start-up Futurerent is one tech company to have bucked the remote-first trend. Its staff is back in the office four days a week, a move that chief executive Godfrey Dinh says is about prioritising collaboration gains over potentially losing talent.

The default position for Futurerent chief Godfrey Dinh is for staff to come into the office.Credit: AFR

“Our team works together in the office four days per week, with most people working from home on Fridays,” Dinh says. “They can always choose to work from home whenever they need, but the default is to come into the office.”

Dinh says that most companies are still trying to find the balance that works for them, but given his start-up is relatively new – and still a small team – being in the office together is the best option.

“I don’t buy the idea that unless WFH [work from home] is your default workplace policy, you won’t attract top talent,” he says. “I’ve found an incredible team that thrives on each other’s energy and wants to win together. But by the same token, as the business grows and you need to hire remotely, you need to enable workplace flexibility and find ways to spend time together physically where there are team members who are remote.

Airbnb lets its employees effectively live and work from anywhere in the world for up to 90 days a year per country.Credit: Getty

“I do think you need to provide a nice environment with small conveniences like coffee and soft drinks. You only need to offer incentives when your office culture has gone too far one way or you have the wrong people on board and you need to correct it.”

Many of the US-headquartered global tech giants are also winding back their pandemic work-from-home policies. Amazon, which employs about 7000 Australians, has mandated that its employees spend at least three days a week in the office. It has also barred workers who work from home more than twice a week from getting a promotion unless they have further leadership approval. Facebook parent company Meta, Google parent company Alphabet and collaboration software maker Zoom have also asked employees to return to the office.

Mitesh Mangaonkar is the lead data engineer for Airbnb’s global trust and safety unit, helping to mitigate fraud on the company’s platform. He says he’s been working remotely for the past five years – even before the pandemic – and that while Airbnb has long embraced the work-from-home model, the company’s approach runs deeper.

Airbnb lets its employees effectively live and work from anywhere in the world for up to 90 days a year per country.

“We are indeed reaching a pivotal point in the WFH debate. But it’s not just about location, it’s about rethinking work paradigms, emphasising outcomes over hours and fostering a culture of trust and autonomy,” Mangaonkar says.

“It’s time for companies to accept that full-time office work is a thing of the past for many employees. The future is hybrid … And businesses should focus on building systems and cultures that support this.

“While bonuses or incentives seem appealing, they are not a long-term solution to encourage office returns. The key lies in understanding employees’ preferences and concerns.

“At Airbnb, instead of incentives for returning to the office, we focus on creating an office environment conducive to collaboration, social interaction and innovation – things that are harder to replicate in a remote setting. We view our offices more as collaboration hubs rather than mandatory daily workspaces.”

National Australia Bank and Westpac have policies requiring most employees to be in the office for a minimum of two to three days a week but do not currently tie remuneration to office attendance. A NAB spokesperson said employees could apply for flexible working arrangements in accordance with the national employment standards.

In July, the Finance Sector Union filed a dispute in the Fair Work Commission against Commonwealth Bank, claiming the bank had failed to consult employees over their direction for employees to return to the office at least 50 per cent of the time each month. A CBA spokesperson said the bank gave office-based staff two months’ notice in May and, since July, the vast majority of its people now spent 50 per cent of their working month in the office.

“Our approach to hybrid working has always been about finding the right balance between our long-standing commitment to flexible working and ensuring we deliver the best outcomes for our customers,” the spokesperson said. “Research has shown that connection, innovation and the ability to build and strengthen relationships is absolutely fundamental to how we continue to work.”

Google parent company Meta has asked employees to return to the office.Credit: Bloomberg

CEO nostalgia for nine to five

Despite a survey in October suggesting most chief executives predict a full return to the office in three years, Hopkins says that’s highly unlikely to happen.

“If you look around the world at occupancy rates in commercial real estate, they really tell a story and they’re not heading north by any means,” he says. “I think CEOs might be a little bit far away from the coalface to know what’s happening on an operational level.”

PwC Future of Work leader Caitlin Guilfoyle says there has been a stronger pull to get workers back into the office in sectors such as financial services.

“I think there is some element of chief executives having nostalgia for what has worked previously,” she says. “We have a long history where people working Monday to Friday, nine to five, worked really well.”

Guilfoyle says while employers are increasingly mandating a return to the office, hybrid work is “definitely here to stay” and that organisations should not make any sudden moves or mandates if they haven’t walked the process through with employees and leaders to work out what is right for them.

Organisations should also be cautious about providing financial incentives for office attendance, Guildfoyle says, because it can create inequity within organisations.

“We know that more women, more parents and people with neurodiverse needs are more likely to have a high proportion of working from home,” she says.

Hopkins also cautions against tying office attendance to remuneration, saying it can weaken productivity and workplace diversity.

“Where the problems lie is when people are being forced into the office simply to meet quotas from a mandate and they end up doing work there that they would do better at home,” he says. “If you’re looking at having a diverse workforce, forcing people to come into the office who clearly don’t want to is a dangerous policy and you will end up with a lot less diversity.”

Instead, businesses looking to see increased office attendance, social connection and collaboration could consider personal and professional development and mentorship, mental health and wellbeing initiatives and workplace access to amenities such as cafes, gyms and childcare, Guilfoyle says.

While there are benefits to working from home, Hopkins says the office still has a role to play.

“A lot of individual, administrative and thinking work can actually work better at home or in locations where you can have a bit more space, time and flexibility,” he says. “But there are things that work well when we’re physically together, and if you’re working from home for long periods of time, it can become isolating, so it’s important to take breaks and maybe take your laptop along to a cafe for the social interaction.”

Hopkins says for the most part, companies seem to have struck a balance at two to three days of office attendance a week, with managers wanting employees in three days a week and employees enjoying the flexibility of being in the office two days a week.

“Only a very small number of employees, say less than 10 per cent, want to work remotely all the time and a similar number want to work in the office full time,” he says. “People like having some time in the office, seeing colleagues and catching up for collaboration events that might work better in the office, but at the same time maintaining that work-life balance. There’s been a lot of flux since the pandemic, but we seem to have settled on the hybrid work model which is very popular and seems to be a good compromise solution.”

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