In our barometer, the US, Australia, Germany and the UK are all upbeat about the prospects of a transformed future workplace. However, unsurprisingly, Japan performs poorly on the barometer owing to a strong and rigid workplace culture.³

Our survey also finds that larger companies are faring better because of having greater resources to put into transforming their workplaces. The retail, media and information technology, and financials and insurance industries will also cope better in the workplace of the future. While technologies such as virtual reality will help teams bridge physical distances and raise productivity, companies must pair these investments with a focus on human-centric policies that consider individual employees’ needs and limitations.

Our 2021 report, A changed workplace after covid-19, revealed how remote work and work-from-home (WFH) models would become the norm in the post-pandemic era. While it was clear that technology has a pivotal role in enabling productivity gains, the human element is proving just as important. A workforce that feels supported and satisfied will produce their best work, and that entails companies refocusing to meet everyone’s unique needs for the collective good.

The 2022 report considers how experimenting with people-centric strategies, such as workplace flexibility, employee engagement and an identifiable culture, can help companies establish sustainable business growth. As evidenced by the barometer and survey results, forming a magnetic workplace will be crucial to the next step in organisations’ evolutions.

This report was written by Shivaji Bagchi and Siddharth Poddar and edited by Naka Kondo. The development of the Magnetic Workplace Barometer framework was led by Sumer Sharma and Bilge Arslan.

Organisations from the US (5.64) and Australia (5.48) displayed much more confidence that their technology adoption strategies had kept pace with innovation. In particular, US organisations (5.92, compared with the global average of 5.33) demonstrated a strong sense of confidence that they were maximising the productivity opportunities offered by digital technologies.

In comparison, organisations in Japan appeared to be laggards in terms of digitalisation, reflecting long-standing trends in the nation.⁴ The barometer reveals that, generally, Japanese companies demonstrate less confidence in their ability to adopt and provide the latest digital tools. Nearly a quarter (24%) of Japanese respondents expressed a lack of confidence that their organisations have provided the necessary digital tools to enhance individuals’ productivity.

According to Clemens Philippi, CEO at MSIG Asia, rapid and relevant technological adoption will be essential for facilitating a necessary mindset change that organisations will inevitably undergo as they move into a new digitalised culture. “The overarching topic is always culture. Everything else stems from culture. This mindset change brought about by technology is essential to move in alignment with the new digitised culture,” he says.

A shift in mindset is a key component of the success of a digitalised magnetic workplace, which is why it is unsurprising that industries like media and IT (5.73), which are perceived as being more progressive and digitally native, are more confident in their ability to update and adopt the latest digital tools. Given how the internet has changed the media and IT landscape over the last decade, these firms have established a culture in which upgrading tech is the norm.

Despite the strong gains made by the edutech industry during the pandemic, educational organisations scored below average across all three sub-categories, especially with respect to staying abreast of the latest digital tools and implementing technology infrastructure. Among surveyed respondents, more than a third (35.7%) of education organisations lacked confidence that their organisations had provided the right infrastructure to facilitate productivity, despite the growth of the edutech industry.

Our survey backs up their comments, especially in light of growing demand from employees for more flexible work options and stiff competition in a digitalising economy.⁵ The majority of surveyed organisations (74.8%) express confidence that they have successfully provided the technology infrastructure needed to facilitate productivity, which includes not just internet connectivity but also secure systems. Increasingly, there have been examples of companies like Twitter and Basecamp that have allocated significant budgets to support remote workers, including help setting up functional home offices or covering internet bills.⁶ “What I see a lot of teams doing now is even letting go of their office and using a co-working space for just a few days of a week that people want to actually work in [the] office together,” says Brittnee Bond, founder of Remote Collective.

Globally, tech spend has risen rapidly as organisations react to everything from the ongoing health crisis to geopolitical fallouts and supply chain disruptions. In 2022, global spending on IT is projected to reach US$4.4trn growing at 4% per annum from US$4.26trn in 2021,⁷ and IT budgets are expected to expand by 13% year-onyear in 2023 with 51% organisations planning on increasing their IT spend in 2023.⁸

While not all companies will invest in precisely the same types of technologies, remote communication and collaboration tools have become a staple of organisational digitalisation efforts. These tools make it easy for teams to connect with one another while opening companies up to untapped pools of skilled talent.

A magnetic workplace is not only characterised by its technology, but also a changed mindset that prioritises more efficient ways of working. As Darren Murph, head of remote at Gitlab, explains, adopting digitally mediated remote work models can accelerate organisational productivity by forcing teams to be more “intentional” about how their operations are run.

“Remote work is more durable and flexible by allowing individuals to be productive at their peak hours,” he says.

Mr Murph adds that digital tools can also break down information silos between teams and departments, leading to greater “awareness of information” that is a hallmark of a magnetic workplace. To explain, he gives the example of how technology can enable effective document management and information scaling in a manufacturing company in order to introduce transparency and productivity across departments.

“Imagine you need to learn a new policy or gather new information to do your job better— because your colleagues have done a good job of documenting, it’s easier for you to retrieve information instead of having to tap someone on the shoulder or wait for them to come into the office,” he says.

“When more people are aware of information, you can make productivity gains even in a combined hybrid-onsite operation.”

It is no secret that data is the new oil, and the already-massive volumes of data companies have access to are set to continue increasing exponentially. It is critical that organisations use these data efficiently to both reduce workloads as well as enhance productivity.

However, not all companies will be able to implement this aspect of a magnetic workplace, given resource and cultural limitations. For instance, larger firms (those with annual revenue of more than US$500m) were likelier to express more confidence in their technology infrastructure than their smaller counterparts. This result is naturally due to larger firms’ greater access to resources, which enables them to invest in more sophisticated and effective digital tools.

There are some signs that these realities could change given enough time. The majority of surveyed respondents (70.8%) say that within the next five years their organisations will successfully provide the tech infrastructure needed to facilitate greater productivity. Similarly, most organisations, regardless of geography, signalled confidence that they will see improvements in their efforts to update and adopt the latest digital tools within the next five years.

“As organisations’ workforces begin to decentralise away from the office space, there has been a concurrent shift in thinking around how productivity is measured and assessed,” says Darren Thayre, head of innovation for the Global Strategic Initiatives team at Google.

In a magnetic workplace, organisations should adopt a new approach to performance management—one that is more collaborative, agile and responsive to rapid changes in circumstances. This might look like running more frequent performance assessments or offering continuous feedback. In recent years, firms like Google have found success in replacing key performance indicators (KPIs) with OKR (objectives and key results) management systems¹⁰ that assess employees on project outcomes and how they’ve contributed to the company’s business goals.¹¹ Others are attempting to integrate personal and professional goals to create more empathetic performance ratings.¹²

The barometer reveals that, over time, the majority of organisations are moving towards assessing productivity based on outcomes and value addition. In this regard, the global average rises from 5.21 to 5.37 over the course of five years, with the US ranking first both today (5.84) and in the future (5.96). These results suggest that US employees have a high level of confidence in their organisations’ efforts to transform their performance management criteria. Japan is on the other end of the spectrum, with a score of 3.80 today and 4.02 in the future thus reflecting that the Japanese expect positive changes over five years.

Industries like logistics, education and healthcare are quite confident about adopting new methods of assessing productivity based on outcomes and value addition. The logistics industry, in particular, appeared to have wholly embraced this, ranking first with a score of 5.90. These results come as no surprise considering the upheavals that have rocked supply chains and transport providers, forcing the industry to reconsider measures of success.¹³

Some firms, such as Allcargo Logistics, are experimenting with digital platforms to facilitate ongoing performance evaluations that are better suited to meet the demands of the ever-changing business landscape. Employee engagement should become crucial to any business strategy, as engaged teams have less absenteeism and better overall results.¹⁴ Continuous performance evaluations can facilitate better communication between managers and employees, allowing managers to make changes to team goals to suit timely changes in company strategy or needs.

Studies have shown that focusing more on outcomes can positively impact a company’s bottom line, as more aligned employees are demonstrably more motivated.¹⁵ An outcomes focused approach also introduces a level of transparency into performance management, which can help boost worker trust and satisfaction, leading to a more magnetic workplace.

In order to facilitate these new performance management strategies, companies will need to adopt new technological solutions, hence reinforcing the close relationship between technology and productivity in building a more magnetic workplace.

One element used to assess this sub-pillar is the degree to which flexible working arrangements (in terms of location and working hours) are made available to employees. The barometer reveals that organisations in most geographies are very forthcoming with respect to providing flexibility and better working conditions for their employees, with the highest scores garnered by companies in the US (5.77) and UK (5.73), followed by Australia (5.64) and Germany (5.62).

In comparison, Japanese organisations were less likely to offer flexible working arrangements. According to Ms Bond, the Japanese are plagued with a lack of a work-life balance. “The culture of why people are not allowing others to work remotely within teams is because of this old paradigm that I need to see my employer, or my employees, in order to know that they are working.” However, there is some suggestion this will change within the next five years. According to the survey, 52% of Japanese respondents expressed confidence that flexible working hours will become available in the near future.

However, both Mr Philippi and Lauren Howe, assistant professor of management at the University of Zürich, stress that the concept of “flexibility” should also be adaptable to specific industries and circumstances.

Unsurprisingly, those in media and IT (5.76), finance and insurance (5.57), and retail (5.56) were more likely to offer flexible working arrangements, as they may not necessarily rely on a physical space to carry out their work. More “traditional” industries like manufacturing (5.07) and education (4.75), where physical presence is a necessity, see lower scores.

Mr Murph concurs with these findings, adding that even highly regulated fields like medicine and finance were making strong pivots to remote work in an attempt to achieve maximum efficiencies.

The barometer indicates that optimism remains. Flexible working arrangements, a key hallmark of a magnetic workplace, look likely to gain traction in these industries within the next half-decade.

Job-crafting—defined as the ability of employees to have a hand in shaping their role—is another element used to assess whether a magnetic workplace has empowered their workers. It has been shown to increase job satisfaction among workers, leading to more initiative being taken, enthusiasm and wellbeing.¹⁷

The reasons are obvious: employees are far likelier to stay with a company if they feel they have a stake in the outcomes and that their actions and opinions can have a tangible effect on the business. The impact of enabling employees to job-craft alongside their managers gains even more cogency when considered in light of the shift in performance management towards outcomes and value creation as well as targets set by both employees and managers, as discussed in Pillar 1. More autonomy can instil in employees a sense of ownership of their work, leading to overall improvements in the quality of work and more sustainable business growth.

The US (5.80) and Germany (5.66) emerged as leaders in this area, but the biggest change in scores was registered in Australia, where more employees will be able to access job-crafting within the next five years. Despite a more manageable scale, smaller companies were found to be less likely to offer flexible work arrangements or access to job-crafting.

According to the barometer, companies in the US and Australia offer the best opportunities for employees to develop existing skills and acquire new ones. Germany, meanwhile, sees the biggest improvement in the score for this indicator over the course of the next five years.

It’s unsurprising that larger companies (5.54) scored higher in terms of providing avenues for professional development and clear trajectories for career growth compared with their smaller counterparts (5.01). Smaller firms tend to have flatter organisational structures than larger firms and more informal promotional structures. However, based on related survey, improvements are on the horizon for smaller companies, with 68% expressing confidence that their organisations will improve their employees’ career trajectories within the next five years.

Generally speaking, our barometer demonstrates that companies are performing well when it comes to establishing a workplace culture—this is a good thing, as the values formed amid that culture will serve as crucial touchstones while firms integrate new policies or technologies. For instance, even if a company is changing the metrics it uses to measure productivity, a clear understanding of its values around diversity and inclusion will help ensure fairness and employee satisfaction. Those qualities will translate into long-term, sustainable business growth.

Speaking of workplace culture, the gap between the retail (5.49) and construction and real estate industries is stark (4.82). When the pandemic broke out, retailers were forced to pivot to omnichannel selling to stay afloat. Customers rapidly adjusted, driving a boom in e-commerce, which is expected to stick beyond the pandemic. Many retailers and their employees were quick to adapt, work remotely and deliver. They experienced first-hand what it means to maintain workplace culture while going remote. The construction and real estate industry, meanwhile, did not have the experience of a remote shift. The industry only started up work once governments allowed on-site work with safety protocols. And with the real estate industry being hard hit, morale and workplace culture have taken a hit.

These sentiments were especially strong among US companies, where the scores are well above the global average (5.07). Organisations in both Australia and the US also reflected the highest levels of confidence that their efforts to create more diverse recruitment processes and safe environments will only improve with time. “From a diversity standpoint, it logically makes sense that if you are internationally pulling your talent, then you’re going to have a lot more access to the most amazing people. And I think that, culturally, Americans are a lot more open to whoever gets the job done the best way,” says Ms Bond.

This is in stark contrast to Japanese companies that tend to have more homogenous workforces and less diverse recruitment. There are signs that change is on the horizon in Japan: the barometer signals that organisations are confident that improvements will take place in the near future, especially as local initiatives to introduce more diversity into the public consciousness take root.²⁵

Technology can underscore firms’ diversity and inclusion efforts by making it easier for firms to access a more diverse pool of applicants and remove certain biases that might impede their success. According to Mr Philippi, investing in digital technologies can tangibly improve businesses’ workforce diversity and inclusivity by creating more opportunities to invite more diverse workers into the fold, such as those with disabilities, or women with care responsibilities.

Diversity and inclusion issues have also risen to the top of the priorities list for employees, thanks in part to events such as the protests in the wake of the death of George Floyd and the ensuing global conversation on race. A survey of US workers found that more than half were willing to take a pay cut to work with companies that share their values.²⁶ Therefore, it stands to reason that firms wanting to make their workplaces more magnetic would do well to consider introducing policies that encourage diversity and inclusion.

That being said, these initiatives can be challenging and resource-intensive, which is likely why larger companies have had more success than smaller firms in recruiting diverse workforces (5.28) and creating inclusive environments. Implementing diverse recruitment processes could require firms to reach out to large candidate pools, engage with recruitment agencies or leverage cutting-edge technology powered by artificial intelligence or machine learning—all of which smaller firms naturally struggle to access.²⁷

Conversations around burnout and mental health have become more commonplace in recent years, driving demand for workplaces that enable work-life balance. This has been shown to correlate with improvements in productivity, but also worker health and satisfaction, which have helped drive take-up of mechanisms by companies today. For instance, software developers Aloa have integrated mental health into their employees’ quarterly KPIs, while Jobot and Rsume.io offer allowances that enable their workforces to access mental health services.³⁰ According to Ms Bond, companies are now becoming more open to their employees taking a day off. “I think that’s a very healthy thing for everyone across the board because it also adds to the productivity. When people care about their teams, their teams are going to want to be more productive,” she adds.

Leadership efforts will be key to ensuring employees’ mental wellbeing by introducing the necessary infrastructure and processes to manage teams’ workloads, even when digital remote working tools make it easy to work all the time. Managers can help make their workplaces more attractive to employees by empowering them with more autonomy to set their own hours and boundaries.