Here is an excerpt from an article written by Brian Elliott  for the MIT Sloan Management Review. To read the complete article, check out others,  sign up for email alerts, and obtain subscription information, please click here.

Illustration Credit:  Carolyn Geason-Beissel/MIT SMR | Getty Images

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What hybrid work trends should be on every leader’s radar screen in the new year? As debate heats up, Brian Elliott explains how to navigate turbulence and come out ahead.

It’s doubtful that the issue of what’s “right” when it comes to workplace flexibility will get settled anytime soon. While the latest research shows that RTO mandates often backfire, the hybrid work debates will continue. As we look forward to 2025, leaders can also expect continued evolution and refinement of hybrid work

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Just a few months ago, many people thought the battles over the value of the hybrid work model — and, on the flip side, return-to-office (RTO) mandates — were finally dying down. Two-thirds of U.S. companies had settled into a flexible work policy, according to Flex Index data on 13,000 companies. Office attendance, measured by building occupancy data, had stabilized at around 50% of pre-pandemic norms for almost two years. Then Amazon CEO Andy Jassy pushed the topic of RTO mandates back into prominence, pressing the company’s workers to get back to their offices five days a week.

Next, Elon Musk, CEO of Tesla and SpaceX and coleader of a proposed Dmodels. Here are the hybrid work trends that I’ll be watching — and you should too.

[Here are the first two.]

1. Organizations that embrace flexible work will steal talent from organizations that impose harsh return-to-office mandates.

Headlines continue to be dominated by extremes, like the RTO pressure coming from Jassy and Musk. But there are a number of CEOs in the background who are silently (or not so silently) cheering. I see them as the quiet magnets happily plucking talent from the loud voices who are braying that employees “aren’t really working.”

Losing people is openly part of the intention behind Musk and DOGE coleader Vivek Ramaswamy’s vision; the mandate “would result in a wave of voluntary terminations that we welcome,” they wrote last month. Their clear statements match the trendlines seen in big technology companies, where harsher RTO mandates tend to follow sizable layoffs. It’s clear that many companies want to shed workers, but they’re likely losing the wrong ones. Sometimes real estate costs figure into CEOs’ return-to-office decisions — an example of the sunk cost fallacy.

I’ve talked with a number of leaders who set their hybrid policies two or three years ago, haven’t changed their minds, and are happily recruiting talented people from Amazon, Dell, and other businesses that have shifted the ground beneath their workers’ feet. Research over the past year shows that RTO mandates lead to brain drain, driving out top talent, and particularly women, given high childcare costs in the U.S. Talented women who are just as ambitious as their male counterparts but need flexibility are ripe for the picking by organizations looking to bring in high performers.

If the economy continues to improve, the battle for strong employees will resume again. Demographic trends aren’t in companies’ favor as populations continue to age and immigration gets stifled. Organizations that take flexible hybrid work approaches will get better access to more talent.

2. Forward-looking organizations will shift toward measuring performance based on results, not attendance.

As London Business School’s Lynda Gratton noted earlier this year, executives’ perception of productivity can vary widely, and measurement is extremely complex. Too often, flexible work policies are set without first deeply analyzing any of the indicators of productivity or outcomes. The internal data that’s needed is siloed off across real estate and within groups as varied as workplace teams (which hold attendance data), human resources (whose systems track performance ratings, promotions, and attrition), and functional systems (which store elements such as sales team performance). Increasingly, organizations that want to get the balance right will need to invest in tools that drive insights into specific functions, levels, and locations.

The bigger shift many are making is one that should have happened decades ago: the move to managing performance based on results. Whether it’s KPIs, MBOs or OKRs (that is, key performance indicators, management by objectives, or objectives and key results), systems that articulate and measure performance at the organization, function, and team level create a massive opportunity. Leaders can step back from “management by walking around” as the default. They can stop monitoring computer activity, a practice that can lead employees to try to game the system (and to wasteful battles, like Wells Fargo’s fight against mouse jigglers).

Businesses like financial services company Synchrony are showing the path forward: moving away from the annual review process to continual coaching and management on the basis of measurable results. The shift to results-driven performance assessment is a massive lever to improve organizational outcomes and to level the playing field for diverse talent.

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