“Hybrid hangover” blamed for rising count of reduced productivity.

The number of New Zealand businesses with staff working from home is increasing, although more than a quarter of those companies say it is making them less productive, according to a new business study.

More than a third of those surveyed (38 per cent) in the 2degrees 2024 Shaping Business Study say they have developed a hybrid model with employees working both remotely and “in-person” – up on the 34 per cent who were doing so in 2023.

While 51 per cent of these businesses (unchanged from 2023) say this has made them more productive, there has been a significant increase in those who say it has reduced productivity. This number, which has jumped to 28 per cent from 17 per cent in 2023, raises the question whether businesses have now entered a “hybrid hangover”, according to 2degrees.

Similarly, those who said hybrid work does not affect the business’s productivity fell from 32 per cent in 2023 to 21 per cent this year.

These are among the key findings in the study which sought the views of 704 business decision makers ranging from companies with one employee to those with more than 51. The survey, which took place between April 3-16, was conducted on behalf of 2degrees by research agency Perceptive who spoke to business owners, CEOs, directors, general managers and others in C-Suite roles.

Researchers found that businesses with a hybrid working model (fully or mostly in person attendance in the office) are more common among those based in Auckland. In contrast, those employing a fully or mostly in-person model are driven by older-tenure and “reviving” businesses (those said to be slowly getting things back on track after facing challenges).

The study shows 39 per cent of hybrid businesses have decreased the amount of time staff are required to be in the office, 17 per cent have increased this time, while 44 per cent have kept it the same as in 2023.

More than half of businesses (54 per cent) claim productivity levels are the same as last year, a third (34 per cent) say it has increased while 12 per cent say they are less productive (down from 16 per cent in 2023).

2degrees CEO Mark Callander says: “Talk to any business leader, or any office worker – and hybrid working is still a regular topic of discussion, which is amazing given we have been back in the office for a few years now.

“’At 2degrees we ask that people are back in the office 50 per cent of the time, but we are pragmatic – some roles require more, and some less. If you are a business development manager, you need to be physically present most of the time. If you are a coder, you are probably more productive working remotely – BUT you still need to connect with colleagues.

“It takes strong leadership and understanding how you get the most out of you teams to drive high performance.’’

Callander says he believes much time an employee should spend in the office to grow, learn, connect and ultimately progress their career is a great conversation for individual managers to have, and that office time is focused and beneficial to staff, the company, and ultimately customers.

‘It’s important that office time is used wisely – we have regular training seminars at lunch times, we have plenty of social groups, and team meetings that foster creativity, productivity and connection.

‘’We’ll be interested to see how this develops, and what business leaders tell us in next year’s survey.’’

Full report out 26 June. For more information: 2degrees.nz/business/shaping-business-study