The tricky balance of hybrid work policy 

“Returning to the office” has been a post-COVID slogan since 2022. But the prevalence of organizations calling employees back to the office in a more formal way has been on the rise starting in early 2025. Big names, from tech giants to Canada’s largest financial institutions, are mandating employees to work from the office. While the majority of Canadian organizations are maintaining a hybrid approach (some days in the office, some days at home), the message is clear: Organizations see the value of working together in-person.

Mercer research from March 2025 indicates that close to 70% of Canadian organizations are opting for a hybrid approach, with 3 days per week in-office being the most common policy. This shift reflects a careful balancing act for both employees and organizations as they navigate the complexities of returning to traditional office environments.

Balance #1: Employee engagement vs. Well-being  

Mercer research shows that employees in Canada who work full-time in the office (“on-site”) often exhibit higher engagement levels compared to their fully remote counterparts (with hybrid workers falling somewhere in between). While higher engagement is often correlated to higher employee and organizational productivity, the mental health implications of rigid work policies, particularly for younger generations who make up the largest proportion of today’s workforce, create a challenging equation. 

Source: 2023/2024 Mercer’s Inside Employees’ Minds Canada Research

Organizations should consider this tricky balance between engagement and well-being and find the right mix that works for them, both short and long term. While it appears that the market trend is still in-flux, no single strategy is going to work for all companies and it may take more time to find the right balance.

Balance #2: Short-term and long-term

The appeal of working from home (WFH) is undeniable, providing employees with the flexibility to manage their time and responsibilities. While short-term gains may be attractive, they may not contribute to sustainable organizational success.

The long-term benefits of in-office collaboration extend beyond just the day-to-day operations and organizations are now seeing the long-term pitfalls of exclusively remote policies, particularly concerning employees’ career development and the cultivation of a future-ready workforce. Striking a balance between short-term advantages and long-term objectives will be essential for organizational growth.

Balance #3: Elements of the total rewards package   

Flexibility is not merely a perk; it is a critical component of a total rewards strategy that can significantly impact employee attraction and retention. Along with other elements of the total rewards package (e.g., compensation, retirement savings), hybrid work policies will remain a core lever for organizations seeking to differentiate themselves in a competitive landscape.

While it is crucial to stay attuned to market trends regarding hybrid work and other total rewards elements, companies must avoid the trap of trying to be “all things to all people.” A thoughtful approach to balancing the total rewards package, including hybrid work policies, will be critical in identifying areas for differentiation.

Monitoring the balancing act

As organizations navigate the complexities of hybrid work policies, it is essential to measure and monitor their effectiveness in terms of productivity, engagement, and employee well-being. Productivity and employee analytics will continue to evolve, providing organizations with enhanced visibility into the return on investment (ROI) of all programs – not just hybrid work. Layered with employee listening exercises, organizations will have a powerful mechanism to gauge the effectiveness of their hybrid policy.

Take action now

Are you ready to strike the perfect balance? Don’t leave your organization’s future to chance. Contact Mercer today to leverage our expertise in developing effective hybrid work strategies that enhance employee engagement while prioritizing well-being.

Let’s work together to create a sustainable, flexible, and rewarding work environment that attracts and retains top talent. Reach out to us and start your journey towards a successful hybrid work policy.