What you need to know: 

• The work from home debate has hit boiling point as private and public employers call time on Covid era flexibility.
• Coles, Woolworths, ANZ, Commonwealth Bank, Tabcorp, AGL and Flight Centre are among those that are cracking down – with some linking executive KPIs and bonuses to physically being at work.
• Others are using location data to track staff.
• WPP's four-day mandate has left agency staffers anxious their employer will be next.
• The benefits of a hybrid approach are well articulated: Flexibility to work as best fits the task and desired outputs; reduced commuting time and costs; the ability to live in less expensive towns and suburbs given the affordability crisis in many metro areas; the ability to juggle childcare and the realities of modern life; and the resulting reduced financial stress and risk of burnout and churn. Plus, the flexibility to come to the office when required for meetings and teamwork that requires and benefits from face to face interaction.
• Some data suggests more than half the workforce prize that flexibility: A recent survey from HR platform HiBob found 54 per cent of workers would delay career progression in exchange for better work-life balance. Meanwhile, three quarters of respondents in the latest National Working Families Survey said they would not apply for job without flexible arrangements. 
• A shorter working week could sway that stance, suggesting that work-life balance is at the crux of the issue. In a poll Mi3 ran onsite and on LinkedIn in February, more than seven in ten respondents said they'd swap WFH in exchange for a four-day in-office week at full pay. 
• Indie shop Claxon takes that approach, but staff are still allowed to work two days remote if they want to. CEO Daniel Willis says it works – claiming productivity is up and staff and clients are happy. 
• But former STW operations chief turned adland advisor Chris Savage reckons the time is ticking for WFH: "The reality is that our industry has never been in a tougher commercial situation that it's in now" he says.
• He also suggests indie agencies are effectively a "lifestyle" choice but that even for them, getting staff back to the office at least four days a week will be critical to establishing the kind of performance culture required to keep their heads above water amid incoming structural disruption.

Since late 2021, employers have walked a delicate line in their efforts to lure staffers back into the office without upsetting a workforce keen to keep newfound flexibility. Issuing diktats during peak work from home (WFH) would have almost inevitably seen talent defect to a more accommodating competitor.

But the tides have been turning, first slowly, and now fast. Big business is getting tough on return to office (RTO) as patience for the hybrid work debate runs dry and productivity pressures soar. 

Meanwhile, AI is stalking every digital industry, pressuring business models while making some reconsider 'right-sizing' following a post pandemic boom and an efficiency drive that has taken root in the US, first in tech, and then in government, and is spreading outward fast.

For ad agencies, tensions came to a head in January when WPP informed its 114,000 employees they’d be expected to come back four days a week starting April.

The policy made WPP the first of the major holdcos to push the hybrid model beyond the default three days of office attendance, leaving many agency staffers nervous their employer will be the next domino to fall.

Back to the future

For all the merits of hybrid work, private and public employers want more bums on seats – where they can see them.

The NSW Government was one of the first to signal the wind of change last August, when it told workers they would be expected in the office at least three days a week. The likes of Coles, Woolworths, and AGL followed with similar three-day mandates, while ANZ and Commonwealth Bank require at least 50 per cent office attendance. Some, including CommBank and ANZ, have tied office attendance to annual performance reviews and bonuses.

While the current consensus seems to favour three days face-to-face, it’s looking unlikely the RTO mandates will end there – particularly if the US is any example to go by.

Donald Trump then made the precedent clear on his first day in office last month – two million federal workers were ordered to return to the office full time with immediate effect. 

Private American firms have been headed that way for months, with Tesla, Amazon, Dell, and Goldman Sachs having already faced fierce employee backlash for scrapping work-from-home entirely.

The mood shift is already live in the local market, with Tabcorp and Flight Centre among the Australian companies to have scrapped WFH entirely.

Equally telling is that the percentage of the Australian workforce working from home last year dipped for the first time since 2020 – though only marginally.  The latest ABS data on working arrangements found 36.3 per cent of employed people ‘usually worked from home’ as of August 2024 – compared to 37.4 per cent a year prior. It's worth noting the majority of RTO mandates have come into effect since that cutoff. 

Employee holdout

For many, switching back to pre-pandemic regimes is painful – and unions have been pushing to expand workers’ rights to challenge employers who refuse requests for flexible arrangements.

It's no surprise. The benefits of a hybrid approach are well articulated: Flexibility to work as best fits the task and desired outputs; reduced commuting time and costs; the ability to live in less expensive towns and suburbs given the affordability crisis in many metro areas; the ability to juggle childcare and the realities of modern life; and the resulting reduced financial stress and risk of burnout and churn. Plus, the flexibility to come to the office when required for meetings and teamwork that requires and benefits from face-to-face interaction.

It’s particularly true of those with parental or caring responsibilities – 76 per cent of respondents to the 2024 National Working Families Survey said they would not apply to a job without flexible working arrangements.

It could make for a precarious transition for employers where retention is concerned. A recent survey by HR platform HiBob found that 43 per cent of Australians were ready to leave their jobs the moment economic conditions eased, with greater flexibility high on the wish-list for most – 54 per cent said they would delay career progression in exchange for better work-life balance.

HiBob's research found 33 per cent of women and 43 per cent of men said remote or hybrid work opportunities would entice them to move to a new company.

Importantly, getting to work from home isn’t the be all and end all for most hybrid fans. Mi3 ran a poll onsite and on LinkedIn earlier this month to test the waters. The results were essentially the same: 71 per cent of the 347 LinkedIn users who responded said they would happily ditch work from home in exchange for a four-day week at full pay. Most respondents worked within media and marketing – and many were at senior or executive levels.

The onsite poll (n=61) split 75:25 along the same lines. (Mi3 doesn't have visibility on people's votes, as polls are anonymous, but that they work in marketing, media or tech is a reasonable assumption.)

Carrot vs. stick

Some firms have taken a hard line despite worker sentiment – sceptics argue the risk of churn is just the point. 

Locally, Tabcorp’s September RTO mandate preceded a round of cuts that saw the wagering business’ headcount reduced by 10 per cent as of December. Others, like Amazon, have been accused of ‘backdoor layoffs’ with commentators suggesting strict mandates are intended to cut headcounts via natural attrition. (Similarly but separately, mandates in the US by tech firms and the government to make workers justify their performance and productivity have been viewed in the same vein.)

Other employers have taken more creative – and in cases questionable – approaches to incentivise staff to come into the office more frequently.

As the Financial Times reported, companies have more data than ever to help them keep track of staff activities – employees can be tracked via swipe pass access, computer monitor activity, desk utilisation, human resources technologies, and more. PwC UK, for example, is monitoring attendance via location data, which is sent off to staff and their career coaches each month. Lloyd's Banking Group, meanwhile, has maintained a hybrid work policy with the caveat that it will consider senior executive's office attendance when awarding their bonuses.

Similar approaches are growing popular locally, with Commonwealth Bank, Suncorp, Origin Energy and ANZ each having linked office attendance to renumeration – with bonuses potentially on the  block for those who fail to adhere to the guidelines.

Lay of the (ad)land

In adland, the big end of town is playing catchup with their corporate contemporaries. Indie firms have been more willing – and have the autonomy – to stay flexible.

WPP’s four-day office mandate is the toughest of the bunch, requiring its circa 100,000 staff to attend the office an average of four days a week. Despite global CEO Mark Read’s promise of carve-outs for those in extenuating circumstances, the policy has met strong pushback from the group’s employees.

The rest of the networks have for now settled around the three-day mark, though some with more conviction than others.

The return to office notice issued by Publicis Groupe boss Arthur Sadoun in 2023 still stands, stipulating staff attend at least three days a week, including every Monday, and with no consecutive days at home. That policy has been enforced, with the group reportedly laying off dozens of US staff late last year for return to office policy violations.

Similar, though less stringent, three-day office mandates have been in place at Havas since 2021 and Omnicom since 2023 – though it’s understood the latter is not actively enforcing the policy locally, with specific arrangements and set-office days decided at the team level.

Globally, Interpublic Group’s hybrid policy stands at 50 per cent office attendance per fortnight, including at least one Monday or Friday each week. The local approach appears a little more flexible. Per a spokesperson: “IPG Mediabrands fully supports hybrid working and the value it brings to its people. We ask our people to come into the office for two to three days a week minimum, subject to their role and their agency.”

Dentsu offers the most flexibility. The Japanese advertising group is understood to have retained its Covid-era ‘Be the best you’ policy. The approach, formalised mid-2020, enables talent to decide their hybrid model for themselves, based on their needs and preferences. Most Dentsu staff are said to have voluntary settled at three days in the office, though there are some agency and team-level mandates based on client needs.

The independent agencies have more flexibility on flexibility policies.

Bench Media and Orange Line have settled on two set days in the office per week, and the same is true for Claxon – even with its newly condensed four-day work week.

Bench also gives eligible employees the opportunity to work from any remote location for a stint, while maintaining their outputs, via a ‘Working for Away’ program reminiscent of the ‘Work Your World’ program introduced by Publicis Groupe several years ago.

Others, like Atomic 212, are back three days, though with flex for individual needs, while creative shop Akcelo, like WPP, has settled on four-days back in the office via its 2-1-2 model, though boss Aden Hepburn says it's not iron-clad.

He told Mi3 last year staff had willingly following the guidance, which first debuted in 2022, without the need for an official mandate.

“If there are some people who will say, I won’t do four days in the office. We’ll say that’s totally cool, we aren’t mandating or forcing it. But these are our guardrails and we think that’s the best combination for the people that work at Akcelo plus our clients, and what our collaboration model needs,” he said at the time.

“The measurement for us is the happiness of the agency, retention of the staff, energy in the business every day when people are in the office, and the volume of people who come in…We're very fortunate: on Monday, Tuesday, Thursday, Friday, we get 95 per cent of people in the office, almost guaranteed. On the Wednesday, we typically get 50 to 60 per cent of the office coming in on that day.”

Get back maxi

Chris Savage is a big fan of Akcelo’s approach. The former holdco executive turned business advisor is of the strong view that four days in the office is where the market is headed. He gives a thumbs up to WPP’s new policy too – though says, somewhat ironically, the business completely “blew the communications around it”.

“My strong instinct is that it is heading absolutely to a return to the office for more than three days a week. I doubt it's going to head to five days in the next two or three years – even though many businesses, corporate enterprises, governments and other organisations are back five days a week, and have been for a while,” he tells Mi3.

“I think that we're going to get to four as a benchmark, and I hope we do within the next 18 months.”

Savage was an outspoken advocate of returning to the office even before the mandates began to land. He claims that over the last three or four years, productivity has “dropped significantly across agencies”.

That sentiment appears to be reflected in data across the economy – the latest bulletin published by the Australian Productivity Commission in December suggests that Australia’s labour market remains in a productivity trough at the levels of pre-pandemic stagnation. But you can cut data both ways and some would argue there’s little evidence that hybrid work is the culprit, given 2021-2022 saw the highest productivity levels of the last decade.

Either way, Savage isn’t advocating a full return to the pre-Covid norms, with agency leaders needing to approach the return to the office with “humanity” and “practical common sense” – exceptions will need to be made for certain people.

But those are exceptions – and he’s adamant that getting most people working together in the office most of the time is critical for establishing the high-performance culture agencies will need to keep their head above water as the sector tightens.

“The reality is that our industry has never been in a tougher commercial situation that it's in now – whether it's holdcos or whether it's indies it is tough. We have our backs to the wall.

“There is significant structural change underway, so that even when, in a year to 18 months’ time, the economy hopefully begins to improve, our industry [will have to] to evolve quickly and work harder than ever to create a new, relevant, sustainable future," per Savage.

"Make no mistake, there will be significant numbers of extinction events for agencies that don't work with focus to evolve change and remain relevant.”

He says the impetus to change should ring especially true for indie agencies, despite the tendency for them to go the other way.

“Many of the indies ... they're running lifestyle businesses. One of the reasons they are an indie is that they are in charge of their own destiny, and if they can have a business that's delivering a reasonable return but gives them also the balance of the other things they want to do in their lives, then they will keep doing it,” says Savage.

“But the water is warming up, and like the frog in the boiling water, it's going to be too late for them to climb out and to actually fix their businesses unless we start making some harder decisions around how to make our businesses commercially viable.”

WFH can work

As momentum against work from home grows, some pushing the other way for greater flexibility.

Brisbane-based integrated agency Claxon has recently introduced a four-day work week that gives its circa 30 staff Fridays off in addition to two days of remote work – meaning staff are only expected to show face at the office twice a week.

The deal, according to the agency’s co-founder and CEO Daniel Willis, is that staff condense their 38-hour work weeks into four days, though accepting that they might have to pick up occasional call or urgent task on their extra day off.

“The reality is that it’s not really any different from the weekend,” explains Willis. “A lot of CMOs tend to work seven days a week, so to speak, so it's not abnormal for high priority client requests to come through every weekend – and we just treat them the same on Friday.”

Willis first started investigating the prospect of a four-day week last year, but with few case studies from the local industry – aside from a few who have opted for a nine-day week – he decided to test the waters via a three-month trial.  

He said the feedback from staff has been “amazing”, and clients were happy too. But the new arrangement also drove productivity gains – staff completed their reoccurring tasks 18 per cent faster in a four-day week than they were over five days.

“Clients are demanding – they will let you know very quickly if they're even marginally unhappy with something. [But] there was no negative feedback at all from clients, only positive feedback.”

While he admits that the four-day model might not be a fit for all – i.e. “some holdco's large tier one clients would probably just say 'absolutely not'” – he reckons hybrid work should be possible for firms at every level.

“I think it's a shame that a lot of companies are mandating full time back to office. They're only doing it because they believe that's going to improve output for their business, but there is a way to genuinely achieve that same level of output and results [while keeping] hybrid working, if done properly.”

Ultimately, he reckons agencies that don’t try to make hybrid work will shed “top talent” to those “that are more flexible in their approach”.

Or maybe seed the next crop of competitive indies. Call it a lifestyle choice.