What you need to know:

• The shift to flexible, hybrid working model may be here to stay, but embracing such models can’t be a one-size-fits-all approach, leaders from across the marketing, media and agency ecosystem say.
• From 4-day working weeks to 3-day in-office rules, 9-day working fortnights and work from anywhere policies, there’s an array of approaches in play right now. And for every business holding firm to these policies, there’s an equally firm belief it’s critical to driving the right culture.
• Yet according to surveys, there are plenty of agency leaders who see the balance between work/life balance is out of whack. According to Chris Savage, more needs to be done to get people back into the office if agencies are to improve productivity and profitability. Savage believes at least two out of six agencies are struggling commercially, with little visibility on revenue three months out, project-based client scenarios and uncertainty on spend. Three out of six are making ends meet but “with sweat dripping down their brows and facing constant pressure”, and only one in six could be describes as doing really well.
• Even as flexible work persists as the norm, there’s growing consensus more must be done to manage the knowledge gap plus attitudinal distinctions of generational shift as 20%+ of the workforce becomes Gen Z, a generation that’s lived their lives behind the screen.
• A big part of that is getting these employees back into the office, learning by osmosis. But don’t assume they won’t come, says Pedestrian Group’s Matt Rowley. A counter trend being driven by professional ambition and human economics is seeing more Gen Zs willing to be onsite – even if they fear face-to-face engagement.

Keeping up appearances?

Unless you’ve been living under a rock, you’ll be aware there’s ongoing and often heated debate around what’s commonly labelled ‘the future of work’. For many Mi3 spoke with, the hybrid, more flexible working environments on show today across agencies, tech companies, brands and media companies – whether these companies wanted them or not – are an inevitable evolution in the way we work.

The necessity of remote working during the Covid pandemic set a precedent – and it’s persisted. One cornerstone of this post-Covid operating model – and one that’s highly contested – is employees don’t need to be back under strip lights to work efficiently and productively. Another is it leans towards more flexibility for the employee, giving them time back to enjoy passions (and dog walking) outside professional remits. It also recognises people may be more creative or complete tasks more effectively when they don’t have to work set hours or go to a million meetings. There are also significant cost implications, both commuting and housing.

Examples of flexible working models in our space abound. Take 72andSunny, which has stuck firmly to a ‘work from anywhere’ model and advocates organic in-person meetings over enforcing face-to-face rules. Or House of Brand, which whole-heartedly embraced the four-day working week – agency CEO Nick Palmer is such a convert, he’s doing a podcast encouraging others to follow suit.

At Publicis Groupe, guardrails state staff should be working more in the office than less, but there’s no longer set working hours in contracts and there’s been a resolute shift towards empowered work choices under its future work approach, ‘Publicis Liberté ’. Indy agency, This is Flow, has successfully adopted a nine-day working fortnight over the last year for its 40+ staff, alongside a mandatory three-day in-office approach. The result is a 2 per cent attrition rate – a far cry from the 26 per cent attrition rate the MFA reported across the media industry this past year (and 32 per cent the year prior).

Many corporates are in on hybrid too. Despite a recent KPMG CEO Outlook suggesting CEOs are all looking to have people back at their desks and in the office five days a week by 2025, flexible work models do persist across the corporate sphere. At Reckitt Benckiser, staff are encouraged to come in 50 per cent of the time, to benefit collaboration and exchanges, but flexibility is otherwise solidly supported.

“The whole notion of bringing your full self to work is about you finding the best way for you to deliver your best work,” says RB Hygiene marketing director, ANZ, Florence Paoli. “It’s not about you showing your face in the office, it’s about being able to do your best work, whatever that is for you. This belief is very prevalent in the way we run the business.

“We have all had that experience where explaining something on email becomes quite complicated and no one is coming to a decision. Suddenly, when you sit next to that person, you find a solution. So it’s what we’re encouraging. But we’re not forcing it. We’re super mindful people often do their best work when they’ve had the space to do other things in their day. It’s that sense of flexibility, with the guiding line being what we call internally ‘freedom to succeed’.”

ING, Telstra and TPG have all adopted flexible work policies and maintain them. Unilever went for a four-day working week pilot, and Medibank is set to do the same. Tech players such as Canva and Atlassian proudly tout work from anywhere policies – and commercial figures suggest successful approaches in both cases.

But it’s equally apparent there’s nuance in the way hybrid and flexible work policies are implemented. While plenty see two or three days a week in the office as the ideal, there are examples where in-office preferences are more pronounced. Akcelo is one: The fast-growing agency has a ‘2-1-2’ policy where staff spend Monday and Tuesday in the office; Wednesday as a work from home day; and Thursday and Friday back onsite. This is complemented by a shorter Friday every fortnight and a 4-week work from anywhere allowance each year.

According to CEO, Aden Hepburn, 95 per cent of staff show up on those four in-office days, and more than half even come in on Wednesdays. Akcelo details guardrails upfront with potential employees and while not mandatory, would expect candidates to justify why they wouldn’t work more in-office than not before they’re hired.

Non-binary arguments

Mi3 found agency leaders and business executives claiming models to be working exceptionally well for them in every one of these examples. All believe they’re fuelling the culture required to be distinctive while maintaining the human connection necessary in a service-led, more creative-oriented industry. Nor are they compromising productivity or more flexible employee rights. Benefits cited stretch from lifting energy levels and passion to wellbeing, to helping agencies attract and retain the best talent.

What many in the industry also believe is work is no longer a one-way street of employer dictating to employee. In the words of Publicis Groupe chief people officer, Pauly Grant, the “great evaluation” during Covid of what’s important to us personally, the growing desire for purpose, and an eagerness to strike a better work/life balance is an evolution we simply can’t – or should – ignore. Nor will it disappear even if the power balance between supply and demand shifts back to employers thanks to tough economic conditions, a recalibration of salaries post-Covid (because we all heard of someone promoted too early or compensated too highly where they probably shouldn’t have been) and quiet redundancies across agencies.

“People speak about it being the employee’s power now going back to the employer, but it’s two-way,” Grant says. “We need to have one eye on creating a sustainable business – because if we don’t, there are no jobs. But we also need to look the other way: How do people have the best work environment and live their lives to the fullest when they work? Having focus in an equal sense is really important.”

Numbers certainly make it clear workers want flexibility. Seek confirms ‘work from home’ remains the top search term on the jobs platform, superseding specific job titles or locations. The company’s 2022 report also showed among workers who already have a job, 61 per cent would resign if remote work allowances were revoked. Fresher research from Seek from December 2023 showed ‘flexible working’, incorporating WFH, flexible work hours or four-day work weeks, make up the most valuable work perks people want in a new job. Notably, 54 per cent would actively look for flexible working hours if they were to look for a new job.

Then marry this up with research by the University of Pittsburgh that found return to work mandates upset employees but did not result in a significant improvement in firm performance. For Seek chief economist, Matt Cowgill, such research tells us what many in Australia already know: Hybrid work works, at least for many workers and businesses.

“Employers that don’t offer WFH are likely to be at a disadvantage in the labour market, meaning they may either find it harder to attract and retain quality staff, or they may have to improve their offering in other ways such as higher salaries,” he says.

Why we're still fighting hybrid work

So why is it we continue to hear of huge tension around the need to return to office? Because tension is definitely there – just look at those CEOs KPMG surveyed in its report last October.

“For a lot of organisations, it’s the first time they ever attempted to work this way,” says Grant, noting it’s only three years – the average tenure of a CMO in Australia – since we ushered in this new way of work en masse.

“The way we worked previously is the way we worked for a century. It was ingrained – we went to work at certain times, there was no question about whether you went into offices in 99 per cent of cases. The reason we’re still talking about it is because we’re not well versed in it. It’s new for everyone, a new journey for every organisation. It's also different depending on type of organisation.

“All this means we have to be open-minded in a time where for some, this is a really significant shift. To lock something in I believe would be the wrong thing to do. To analyse, evolve, shift, pivot and not be scared of it is the wisest thing to do because it’s a totally new world for some people.”

Agency balance 'out of whack' and hurting profitability

But it’s a world some don’t see working for client-led, service-oriented agencies. They claim it’s reducing productivity – and profitability – as a result.

Former Ogilvy and STW Group leader and business and leadership advisor, Chris Savage, has surveyed 23 agency leaders in Australia and overwhelmingly found the belief is work/life balance is out of whack. He correlates this to wider fears of a profitability crisis facing the creative, marketing and communications industry.

“I really encourage dialogue and cooperation between employees and employers in the agency world to build a more viable model, build commercial muscle, for the agency business. I do see 2024 as a real crunch time for the industry. Trading conditions will be tough. But it's also a perfect opportunity to get the post-Covid balance right, for a new world of working. And to get it right, it's got to work for businesses, and it's got to work for employees,” Savage says.

“At the moment, I think the balance is out of whack. It leans too far towards employees and it needs to reach a more equal balance between employees and companies. Agency leaders… are saying to me, it's about evolving work from the office to represent the majority of the time. They’re not looking for a revolution on what's happening right now, but a very strong evolution towards that.”

Savage believes at least two out of six agencies are struggling commercially, with little visibility on revenue three months out, project-based client scenarios and uncertainty on spend. Three out of six are making ends meet but “with sweat dripping down their brows and facing constant pressure”, and only one in six could be describes as doing really well, he argues. He cites margin drops from 17 per cent to 11 per cent across PR agencies in the Registered Consultancy group’s 2023 benchmark study, for instance. As long as interest rates stay high, and there’s cost-of-living pressures, he also sees the silent redundancies occurring across the industry continuing.

A major reason for this profitability problem is productivity falling. “People say, oh, no, the reports say work from home increases productivity. I think it did during the early days of Covid – we were all petrified, it was a completely different world, and everyone threw themselves at it,” Savage says.

“We’re now in a post-Covid world. There is no reason from a safety or health perspective to be working from home except when there are clear benefits for certain and disenfranchised elements, or people that have other family responsibilities. But now we're into 2024 and agency productivity numbers are dropping overall," he suggests.

“Of the top three barriers to growth in 2024 in the eyes of the agency leaders I surveyed is productivity – getting teams back together, working together in the office more. For some, a very much work from home, hybrid model works brilliantly… but our model is under pressure and we’re boiling.”

According to Savage, agency leaders recognise work from the office must become the default position rather than the exception, and several plan to mandate three days office time. Even if it suits more than a few holdco leaders to work from home, he adds. And they probably won’t go far as to sack staff who don’t adhere.

“For a lot of them, it’s going to take courage to do it, because it’s not what they’re doing now,” Savage says. It’s worth noting Savage himself isn’t advocating five days back in the office – he sees three days per week as a good start towards “prudent, practical flexibility”.

“It’s not a revolution, but an evolution. And remember in some markets it’s happening already. I do a fair amount of work in Brisbane, and when I walk into those agencies at 8.30am on a Monday morning, everyone’s there.”

Choose your way of working, stick to it

Savage’s point about business leaders deciding on the balance of flexible work right for their organisations, then sticking to it, is something others believe will become the natural order. We’re just not there yet.

Partner at Johnson Partners, Kate Ferguson, says ‘progressive’ boards and CEOs recognise the environment has changed. These companies are asking for senior leaders who are agile thinkers, who can respond to a distributed workforce and who can manage and motivate them in a way “that ultimately delivers excellent customer experiences and drives shareholder return”.

“But there is this real dichotomy in market dependent on organisation. Some of Australia’s largest banks are demanding employees return to work; they have tried a softer approach that hasn’t worked and now they’re making it more specific through KPIs. On the flip side, Australia’s most progressive tech firms, like Canva and Atlassian, are proudly and openly talking about – and promoting – a distributed workforce that’s here to stay,” she says.  

“I think the trend that will continue is companies will choose a path that’s right for their business. That doesn’t mean it’s right or wrong. That’s the important thing – it’s just different. They might have a different style of business – that is, they require people to be together in-person because they truly value human interaction and continuous collaboration. If companies are asking people to come into the office, it doesn’t mean it’s a bad company, it just means their vision is different for the culture of their organisation.

“Leaders are going to put a stake in the ground and employees will choose to opt in or not. Workforces will be attracted to one or the other, and I don’t think one will win out. What we do need is leaders to take a stand on it, then put frameworks in place based on what their stand is. They then need to empower and motivate staff around that.”

This is Flow CEO, Jimmy Hyett, is another who believes working models haven’t yet normalised. Attrition and shifting of workforces to organisations offering the best model for them will come. What’s holding this normality is constant shapeshifting, he suggests.

“From early in Covid, we [This is Flow] had three days mandated in the office and optional work from home on Monday or Friday. We haven’t changed in the last four years. Whereas I know many have tried to find the right model,” he says. “This whole flexibility thing just got blown up. You have businesses and agencies that have changed models four or five times already. It's hard for people to move when no one can get settled… That creates inconsistency in the work and productivity because no one can actually meld into it.

“Picking your model and saying that’s right for your business, then holding on to that, means you do have that consistency.”

Lost productivity: A myth?

Hyett and Ferguson aren’t swayed by arguments suggesting a more flexible working model ultimately reduces productivity either.

“Productivity is not solely about an individual effort, it’s influenced by context and leadership at an organisational, cultural level. Those leaders inspiring and motivating their teams will foster a work environment that is high performance, whether it’s traditional or not,” Ferguson argues.

Publicis Groupe's Grant also dismisses the lost productivity myth. “People are probably seeing that through the perspective of how they looked at things before – are people putting their hours in. I think staff are working as hard as before to be honest, but they’re not working as efficiently as they could because they don’t know how,” she says, adding no one should be setting staff policies around the 2 per cent who are going to do the wrong thing.

“As organisations, we need to quick smart get together how we’re creating learnings and opportunities in a hybrid world – that’s what we should be focusing on more.”

Hyett cites increased productivity off the back of This is Flow’s nine-day fortnight, and without staff having to pick up extra hours on other days of the week. He uses performance and data to gauge this and says “feedback has been incredible”. Helping this is a shift from hour-based to value-based remuneration based on outcomes.

“We only have two goals in this agency. One is the attracting and retaining staff. The other is attracting retaining clients. If we don't do one of them, we can't do the other,” Hyett says. “There are a lot of agencies that do one and not the other.

“It's hard. It costs money to invest into people and these initiatives. It takes some balls too, to go in your own direction and innovate how you should be working with teams. Just feel confident to do it the right way. That’s just what you have to do.”

The Gen Z factor: Teaching young dogs new tricks

While the jury is out on ‘optimum’ mainstream models for in office, out, or thereabout, where there’s growing consensus is the value of in-person exchanges to build the capabilities of younger, newer staff.

Yet this is another tension point. Why? Gen Z, the generation who’ve lived behind a screen and who navigated their way through the last years of school or university via remote learning, are reportedly reluctant to learn by osmosis and don’t cope so well with in-person exchanges.

Pedestrian Group CEO, Matt Rowley, is a vocal advocate for people getting back into the office more than less, and believes lost in-person time has detrimentally impacted younger generations in the workforce. Pedestrian Group was quick to bring people back and insists on commercial teams being onsite four days a week, and editorial teams three days per week.

“We made an extra push a few months ago in terms of making those days firmer. We got very little pushback. There’s a mix of people realising it’s important,” he says.

In fact, Rowley disagrees with assumptions younger generations are avoiding face-to-face, in-office interaction. He spies a counter trend emerging, driven by the very strong ambitions Gen Z workers possess.

“Gen Z are fiercely ambitious, both personally and professionally. It’s different for everyone, but as many realise their professional goals are being limited by remote working, they’ll make their own choice on the balance between the two and gravitate back to the office,” Rowley says. “It'll be different for different people. But we are seeing that. This isn't about discriminating against people, for example, or those who want more flexibility than not. It's natural rules playing out you can't avoid.

“First, you develop faster when you’re around people to learn from. Second, in a multifunctional creative business like ours, you get better outcomes, so you perform better. Third, the right people see it because you’re physically in front of them. The upshot of all of these on average is you progress faster and get paid more the more you’re in the office.”

As an example, Rowley points to a partnerships manager in Pedestrian’s sales team with great potential from the younger demographic cohort keen for a promotion.

“What we talked about about was that she needed to demonstrate and hit targets, and show how she was developing before we moved her into the senior position. Without anyone talking to her about it, she made the decision to be in from 8.30am on a Monday, all through the week, and leave 5.30pm on a Friday,” Rowley explains. “The reason she did that was she said, I know I will get face time with the more senior people in our business, who I can learn from. I also know by being in the office, the stuff I need to get done is more likely to get done. Then I'm going to perform.

“Surprise surprise, she hit her targets, and everyone saw her doing that. They also saw how she did it and how she evolved. And she got the promotion. There’s culture and there’s who she is at play here – but as other people see that, human economics play out.

“That's when you go back to the ambitious nature of Gen Z. In a lot of ways, I don't blame them. They get told on every social media platform they can have everything. You should be able to have as much flexibility as you want, and as much professional progression as you want. They've not seen it any other way in the last four years given what’s happened during the pandemic. But now, as they start to see others evolve, the light bulb goes on.”

Business owners are probably more interested in having those leaning to prioritising professional goals in their businesses, Rowley adds.

“Yes, I still want some flexibility and I'll try and make that balance, but they'll start to make these choices on their own. That's the thing will drive people back more than anything else,” he says.

Rowley also disagrees the necessity of learning via the screen during the pandemic set an expectation you can learn anything that way. “Time is proving the hypothesis wrong. I know how much in my career I learnt by osmosis. There are human truths that don’t change,” he says. 

In order to get a team that's going to perform, there are the many soft skills – what Rowley calls “core skills” – people need. And these are learnt from others.

“When you need something from somewhere else internally in your business, and they say no, what do you do next? There's no course for that. But it’s one of the most important skills you can have in your life, and in a business like ours. The way you learn that is by seeing other people having done it, see how people crash out, and see people succeed,” Rowley continues.

“We've seen people who've tried to learn everything remotely. And there are people who haven't. What you’re already starting to see is those people succeeding and learning faster, responding faster, progressing faster, are in the office. It's human economics.”

The capability gap

Publicis Groupe's Grant sees other things at play here. She should know – 20 per cent of Publicis’ staff are Gen Z, and this cohort is expected to make up 27 per cent of the total global workforce by 2025.

“These people have never worked any other way, and they still got through uni. You can’t ignore that, or the fact they don’t know any different. It’s how they lived their whole lives,” she says. “We can’t just expect them to understand why it’s important to come into the office. You have to give them a reason.

“It goes back to the knowledge gap. People are talking about productivity, but a lot of it is around the chasm of knowledge created over last three years.”

Publicis runs an accelerator program for employees with 0-2 years’ experience nationally and Grant witnessed how difficult it was for these staffers to feel comfortable in a face-to-face environment, or picking up the phone to a client.

“Having a conversation face-to-face with their manager is really scary for them. We have a whole shift of behaviours, expectations, skills and non-skills that is a huge eye-opener,” Grant says.

Then there’s the other fable about ‘younger’ workers that, let’s be frank, is largely upheld by Gen X bosses: Younger people feel entitled to moving up the ladder faster than we would have expected in our own careers. Rowley agrees people can have unrealistic expectations that don't necessarily match their experience or skill base and says it’s a hard skill as a manager to reality check this.

“Especially younger people have been drilled with the idea of you deserve this, just go and ask for it. There can be a little bit of inflation there. It's important a manager knows how to have that conversation in a way that doesn't shatter someone's confidence,” he says.

Grant blames a lot on the massive talent drain in 2021 as the industry starting coming back to life. “During that period, there was super inflation of roles, promotions without the experience – ridiculous counter offers from one agency to another. It was beyond anything I’ve seen before. We had people prematurely promoted,” she says.

“What we now have is people in managerial roles who don’t know how to manage or have those conversations; they don’t really know how to manage the client in the right way. Why? Firstly, because a lot of their lives have been behind a screen. Secondly, they haven’t sat next to someone in the office and understood how their manager handles a really difficult conversation. Any interaction is usually controlled, there’s a set period of time and agenda for the meeting. Unless they’re in a client meeting, they’re not watching how feedback is being given with certain clients and in situations. Yet there’s the typical 70/20/10 learning, and 70 per cent is experience and experiential. It’s part of the issue we have.”

The employer adaptability mandate

While there’s no doubt there’s got to be some movement towards accepting some office time, Grant and Rowley aren’t alone in believing there’s an onus on employers and managers to make sure the environment they’re getting people back to is actually worth being in. Every leader Mi3 spoke with agrees culture and vibe are critical to whatever model or rule employers insist staff adhere to.

It’s for this reason Akcelo spent significant dollars decking out its Sydney Design Award-winning offices, prioritising connectivity in all meetings rooms plus decently spaced-out breakout spaces, café and bar. Hepburn describes it as “Ace Hotel meets Qantas Lounge”.

“You can’t just create a model and expect it to do all the heavy lifting for you,” he says. “What we did is designed our offices, starting with Sydney HQ, to be so incredible, people wanted to be there. They self-elected it was a better environment for them to work in than the kitchen bench at home… This was about making sure we had a place that we could truly stand up and go, here’s our guardrails, but we’re also going to give you this amazing facility to complement your work/life balance in this post-Covid world.”

Over in the Publicis people and culture team, making in-office time meaningful means no meetings unless it’s internal between 10am – 2pm on the team’s ‘ritual’ day together.

“That’s our time to be having those five minute conversations where we get someone else’s opinion, or share what we came across and solve something together,” says Grant.

It’s also about a willingness to adapt to new ways as managers and leaders. A lot of Gen X expect people to come in because that’s what they know and did and insist it’s a better way, Grant agrees.

“It’s only going to work if we both do it,” she says. “That’s where perhaps we’re failing a bit – some of the older generation in leadership just expect staff to come in because that’s what you do and 'I know it’s a better way'. Okay, let’s take them on that journey, but how are we going to adapt to the new generation and manage, lead and provide so people do connect?

“Someone said to me the other day 'I was trying to give feedback to someone younger, it was really difficult, they broke down face to face, I don’t know where to go'. Think about this generation: They’re used to liaising with friends and break-ups over the screen. We have a system where you can give feedback online, maybe they need to adjust a bit as a manager to say I’ll give some feedback through online system, so it’s not as confronting, then work with them through that.”

It's not just constructive criticism. The broader shift towards holistic wellness of the employee – cross-generationally – is being exhibited here and it’s one we simply haven’t got a clear response to yet.

“There has been a massive shift in work is responsible for my wellbeing at work, to work is responsible for my wellbeing,” Pedestrian's Rowley comments. “It's one that's definitely started happening as far as expectations go.

"The pandemic has a lot to do with that. Suddenly, your physical wellness became reliant on the decisions the business was making, like whether you were in the office or not. We also – quite rightly – became concerned for the psychological and physical safety of our workforces being locked up at home while there's a pandemic going on. Boundaries got crossed. Whereas years before that, it was when you turned up in these four walls, I'm responsible for you, and when you're not, I’m not. That was shattered," he says.

“The outcomes and impact of what that's going to be is now playing out. It throws up a lot of challenges.”

But even while seeing power shift back into the hands of the employer to set the rules and expectations in 2024, Chris Savage says recognising employee wellness, or deciding on the level of flexibility on offer in your organisation, shouldn’t depend on supply versus demand.

“It’s not about where that power lies, it’s about cooperation and sensible thinking to ensure agencies can be sustainable and can keep the right level of profitability, because they need to make the right level of money,” he says.

At This is Flow, the ‘relaxing well’ part is as important to maintaining high energy and productivity in the business as being together in-person to collaborate.

“It sounds counterintuitive to give people an extra day off and get more work done, but that’s because the energy, focus and passion is higher – they know they’ve got a window to do it and they punch it out,” Hyett adds.

This is part one in a new series of features exploring the new way of working across the marketing, media and agency ecosystem. Keep your eyes peeled for part two next week, where we'll dive into the four-day working week model and speak to its converts.