Hybrid work outperforms full-time remote as Australian employers resist blanket office mandates

Australian employers are taking a more measured approach to return-to-office policies, even as evidence mounts that hybrid work delivers better outcomes than fully remote arrangements.

According to HRD, Australia's largest organisations are avoiding the blanket office mandates seen in the United States and Canada. Instead, they are favouring hybrid models that balance flexibility with face-to-face collaboration.

Research increasingly shows that hybrid work and fully remote work produce different outcomes.

A landmark study led by Stanford economist Nicholas Bloom and published in Nature followed more than 1,600 employees at Trip.com. Employees working from home two days a week were just as productive as office-based colleagues and were promoted at similar rates. Resignations among hybrid workers also fell by 33%.

"The results are clear: hybrid work is a win-win-win for employee productivity, performance, and retention," Bloom said of the findings, which Trip.com credited with saving the company millions of dollars in reduced turnover.

Bloom said the evidence for fully remote work tells a different story.

"There definitely are studies, there's one in Nature Human Behavior, there's a bunch of stuff showing that is damaging for innovation, that's damaging for mentoring, for connectivity," Bloom said in a Stanford Engineering interview, describing fully remote work specifically, not hybrid.

His earlier research also found that fully remote employees were less likely to leave their jobs but were promoted far less often.

"The one big sting in the tail is their promotion rates were almost half of the ones at the office," Bloom told the American Enterprise Institute. "So it's a bit of a mixed blessing."

Other studies have also linked fully remote work with higher levels of employee isolation.

Unlike many employers in North America, Australian organisations are largely avoiding rigid office attendance rules.

Commonwealth Bank requires employees to spend at least 50% of their working time in the office. Westpac and NAB generally expect staff to attend two or three days each week, although NAB has directed senior leaders back full time.

ANZ has taken a different approach. Employees who attend the office less than 40% of the time could lose up to half of their variable pay, depending on seniority.

Bendigo Bank has eased its attendance requirements, while Woolworths has gradually increased office expectations through a phased rollout.

Jayne Clow, Head of People and Culture ANZ at NTT Data, said strict mandates may do more harm than good.

"Return-to-work mandates may achieve short-term compliance, but they are unlikely to deliver sustainable engagement or performance," Jayne Clow, head of people and culture ANZ at NTT Data, has told HRD.

"From a people leadership perspective, mandates can undermine trust and increase attrition risk in competitive talent markets," she said, part of a broader argument that flexibility is becoming the baseline employees expect, not a perk employers can withdraw at will.

Victoria is set to introduce new workplace rights from September 2026.

Eligible employees whose roles can reasonably be performed remotely will gain a legal right to work from home at least two days a week.

The Business Council of Australia has opposed the move, arguing it could reduce workplace flexibility rather than improve it.

Whether other states adopt similar legislation remains uncertain.

Australia's graduate labour market has remained more resilient than that of the United States.

According to Indeed Hiring Lab Australia, graduate job postings fell nearly 15% in 2025 and remained 35% below their 2023 peak. However, vacancies began recovering in early 2026.

Hiring declined more sharply in AI-exposed occupations, but the report found it is unlikely that AI is the primary reason. Graduate job searches have also remained relatively stable.

The findings suggest that while AI is changing the workplace, employers still face an important challenge: ensuring graduates receive the mentoring, coaching and in-person support needed to build long-term careers.