Investors are watching and judging your WFH policies

Many companies have struggled with figuring out their flexible work policies, but what they may not realise is that many investors are keeping a close eye on developments, writes Dr Gleb Tsipursky.

Indeed, several investors have explicitly and publicly integrated work-from-home (WFH) policies into their evaluations of prospective investment targets. I’ve heard from dozens of investors who approached me for advice on assessing the effectiveness of such policies; in alignment with forward-thinking investors, I see employee buy-in and clarity around policies as crucial. If companies don’t get this right, they are undermining their long-term valuations.

Unfortunately, many companies fail in this arena. A recent study by Mercer showed that only one in three companies have solid rules for handling flexible work. They looked at 749 companies and found that nearly half rely on loose, informal guidelines, while 17 per cent don’t really manage it at all. Only 34 per cent have clear, formal rules. This vague approach can hurt both keeping and attracting employees – and, increasingly, investors.

Additionally, how well are companies sharing their policies? A separate survey by Fishbowl asked about 7,300 professionals how well they understood their company’s plan for hybrid work. The results? Just over half got their company’s hybrid work guidelines, but nearly half were left clueless. That’s not a great look!

Unveiling the nexus between policy clarity and performance

But why is clarity so important? It’s because the success of WFH rules largely depends on how clearly they’re shared and understood. A clear policy acts like a blueprint, guiding everyone in the company towards working well together, ensuring a steady flow of productivity across all teams.

Choosing the right flexible work style is crucial, but having a well-understood plan for that style is equally vital. Clear policies set the stage for how teams operate, aligning everyone towards shared goals. On a smaller scale, they clear up the daily work routine for each employee, laying out what’s expected, how to get there, and how success is celebrated.

The positive effects of a clear WFH policy go beyond just the immediate teams; they ripple through the whole company. Clear WFH rules help sync up different departments, building a culture of openness and trust.

Plus, a good WFH policy isn’t a one-and-done deal, but something that adapts to new market trends, company goals, and feedback from employees. It’s the channel through which the company’s core beliefs and expectations are shared and embraced by all.

The payoffs of a clear WFH policy are real and felt. On one side, it shows in solid numbers like productivity levels, employee engagement, and customer happiness. On the flip side, it nurtures a trusting, empowering culture, creating a sense of belonging among employees. Although this side of the coin isn’t easily measured, it hugely affects morale, employee stay rate, and the overall vibe of the company.

Decoding the impact on employee dynamics

Clear WFH policies are a game changer in creating a good work vibe, promoting teamwork, and smoothing out daily tasks. They act as the glue that holds operations together, ensuring everyone’s on the same page about company expectations, how we talk to each other, and how things get done. A well-thought-out WFH policy spells out the daily grind, communication do’s and don’ts, and what’s expected performance-wise, building a culture of openness, trust, and responsibility.

In a remote or hybrid set-up, the usual face-to-face cues guiding our chats and interactions are missing. Here, the WFH policy steps in, offering a structured playbook that brings a sense of regularity and steadiness in how employees interact. Having clear directions on how to communicate, work together on projects, and what’s expected operation-wise clears up any fuzziness and sets the stage for effective teamwork and partnerships.

Teamwork is the magic ingredient in today’s company success, where a mix of skills, viewpoints, and backgrounds come together to spark new ideas and tackle tough problems. How well this magic works is heavily influenced by the clarity in WFH policies, which outline the go-to channels, tools, and rules for working together across and within departments. Clear instructions on how to share info, communicate, and dive into collaborative projects lay the groundwork for a teamwork-friendly environment.

How into their jobs employees are and how happy they feel play a huge role in a company’s win and are closely linked to how clear and sensible WFH policies are. Employees who get the operational rules and what’s expected of them tend to be more plugged in, happy, and driven. Plus, clear WFH policies send a message of respect, trust, and appreciation to employees, boosting their sense of belonging, job happiness, and loyalty to the company.

Clear WFH policies draw the talent you want

Transparency around WFH policies is not merely an operational guide but also a reflection of a company’s ethos and its innovative approach to modern work culture. When well articulated, these policies serve as a magnet for the kind of talent that values transparency, flexibility, and a results-driven environment. They resonate with individuals who are looking for more than just a traditional office set-up, drawing in those who align with your company’s forward-thinking approach to work.

A well-thought-out WFH policy can be a substantial part of your company’s brand, showcasing its commitment to work/life balance, trust in employees, and a modern approach to collaborative success. When you have a clear WFH policy that’s communicated well, it signals to potential talent that your company values autonomy, innovation, and a balanced approach to professional and personal life.

Moreover, a clear stance on flexible working arrangements indicates a level of maturity and adaptability in a company’s culture. It shows that the organisation is responsive to contemporary work trends and values a culture of empowerment over micromanagement. This, in turn, attracts individuals who are self-driven, adaptable, and thrive in a culture of accountability and flexibility.

When prospective employees see a company with clear, well-structured WFH policies, they see an organisation that aligns with their own values and aspirations for a balanced, modern work environment. They are more likely to be drawn to and stay with a company that has taken the time to develop and communicate a thoughtful approach to remote or hybrid work. The clarity in WFH policies, therefore, not only attracts the right talent but also fosters a community of like-minded individuals who are more likely to collaborate effectively, contribute positively to the company culture, and drive the organisation towards its goals.

In essence, your WFH policy is more than just a guideline – it’s a statement of your company’s brand, culture, and the type of talent it seeks to attract. By being clear and thoughtful in your WFH policy, you’re likely to draw in individuals who resonate with your company’s values and are eager to contribute to its vision in the long term.

The investment prism: A new criterion emerges

Investors increasingly focus on the clarity of WFH policies as a sign of a well-run company. A clear and well-communicated, unbiased WFH policy shows a management that understands modern work needs and is proactive in creating a good work environment. Investors see such policies as a sign of ongoing productivity and efficiency, making companies with clear WFH policies more attractive to investors. Investors see that clear policies lead to happier employees, less turnover, and better customer relationships – all key to long-term business success and, in turn, investment returns.

How much employees agree with the WFH policies is also crucial. It shows how aligned the workforce and management are, which is a key sign of a well-coordinated company and potential for ongoing good performance. Investors are keen on checking the level of employee agreement as it indicates a company’s ability to keep top talent, build a positive work culture, and maintain high productivity levels, even in a remote or hybrid setting.

The focus on clear WFH policies and employee agreement has real effects on company values and investor relations. Companies with clear WFH policies and strong employee agreement are seen as better equipped to handle modern work challenges. This positive view can lead to higher company values and stronger investor trust.

Moreover, the talks between companies and investors now include discussions on WFH policies, employee engagement strategies, and other related topics. This expanded dialogue helps build a deeper understanding and better alignment between companies and their investors, potentially leading to stronger investor relations.

As the corporate scene keeps changing in response to new work dynamics, investment decisions are changing, too. Considering the clarity of WFH policies and employee agreement as key factors in investment decisions is part of a wider trend towards a more well-rounded approach to investment analysis. This trend is likely to keep growing as the benefits of clear WFH policies and strong employee engagement continue to show across the business world.

Conclusion

The connection between well-structured WFH policies and the satisfaction of investors and employees highlights a modern business trend where clear operations blend with a company’s image and culture. Recent surveys show a noticeable gap in how firms handle flexible work set-ups, affecting both employee understanding and investor attraction. Progressive investors are beginning to see a company’s WFH policies as a lens through which to evaluate its readiness and fit with the modern work culture. This view is shared by potential talent seeking open and outcome-focused workplaces. Companies are at a crossroads where well-defined and shared WFH policies can greatly enhance their brand, creating a favourable environment for innovation, teamwork, and lasting business success. This unfolding scenario emphasises the need for companies to craft clear, sensible WFH policies, ones that garner employee buy-in, thus ushering in a modern, inclusive work culture and boosting investor interest.

Gleb Tsipursky, PhD, is the chief executive of hybrid work consultancy Disaster Avoidance Experts. He was named the ‘Office Whisperer’ by The New York Times for helping leaders overcome frustrations with hybrid work and generative AI.