What AHRI’s Latest Research Means for Your Business

If it feels like hybrid work has gone from a temporary COVID fix to a permanent feature of Australian workplaces, you’re not imagining it. According to the Australian HR Institute’s (AHRI) latest research – surveying nearly 1,000 employers nationwide. It’s clear hybrid working is not only here to stay, it has now stabilised.

Five years on from the onset of the pandemic, and in one of the tightest labour markets the country has ever seen, businesses have largely doubled-down on hybrid arrangements. And despite headlines about big US organisations pulling employees back into the office, Australian employers appear far less inclined to push the pendulum back.

So, what does that mean for SMEs and the managers who keep them running smoothly? Let’s break it down.

Hybrid Work: Stable, Not Sliding Backwards

AHRI’s research shows there’s been no significant increase in employers mandating more days in the physical workplace. Hybrid patterns between 2023 and 2025 have essentially plateaued.

Here’s what’s most common right now:

• 30% of businesses expect full-time staff in the workplace three days a week
• 28% have no minimum requirement but encourage attendance
• 16% prefer two days a week in the workplace

More importantly, over 80% of employers expect hybrid work to stay the same or increase in the next two years.

That means hybrid isn’t a fad or charity initiative – it’s the new operational norm.

Why Employers Are Holding Onto Hybrid Work

The AHRI findings show employers continue to see clear benefits, and these haven’t changed much since 2022-2023:

Top Advantages (AHRI):

1. Better work-life balance – 65%
2. Higher retention – 44%
3. Stronger attraction of candidates – 41%
4. Improved employee wellbeing – 41%

For SMEs, this is especially significant. Competing for talent against larger employers is tough enough; hybrid flexibility has become a valuable part of the employee value proposition.

There’s also a perception shift worth noting:
45% of employers say hybrid work boosts productivity, compared to only 11% who believe it lowers productivity.

The old belief that “if I can’t see them, they won’t work” is losing ground, not because it’s no longer trendy to say so, but because evidence inside businesses is proving otherwise.

But It’s Not All Smooth Sailing…

Hybrid working comes with challenges, and AHRI’s research highlights consistent problem areas:

Top Disadvantages (AHRI):

1. Disconnection between colleagues – 57%
2. Reduced staff collaboration – 38%
3. Difficulty monitoring performance – 35%

These issues aren’t surprising and they hit SMEs harder than large corporates. With smaller teams, lower margins for error, and leaner middle-management layers, any drop in communication or alignment has a real impact.

Plus, on average 28% of employees simply can’t work from home, due to the nature of their role. AHRI notes that two-thirds of organisations attempt to offer other flexible options for these staff, things like, RDOs, staggered start/finish times, job-sharing and compressed weeks.

Interestingly, though, many employees aren’t taking up these alternatives even when they’re available. The research suggests a mismatch between offering flexibility and employees actually embracing it.

A Twist: Hybrid Growth Hasn’t Led to More Flexible Work Overall

One of AHRI’s more surprising findings is that the rise of hybrid work has not been accompanied by broader, more creative flexible work practices.

For example:

• Flexible hours
• Make-up time
• Compressed weeks
• Job sharing
• Part-year arrangements
• Personalised rosters

These options exist in many organisations, but uptake is low. Hybrid work, it seems, is the star, but beyond that, flexibility hasn’t expanded much.

For SMEs, this signals a risk: if all flexibility is funnelled into hybrid arrangements, employees whose roles can’t be done remotely might feel disadvantaged or less valued, even unintentionally.

This can create cultural divides between “remote-capable” and “non-remote” roles – something the AHRI case studies also highlight.

Consultation: A Missed Opportunity

Perhaps the biggest red flag the AHRI research raised is around employee consultation:

Almost one-third of businesses have not consulted staff about hybrid work arrangements at all.

That’s not great news. AHRI’s 2024 research shows that employee involvement in decisions is one of the strongest predictors of business performance, including financial outcomes.

Yet even among those that do engage, the tools are fairly basic:

• 71% rely on staff surveys
• 70% rely on direct employee feedback

Not bad, but SMEs could do more to build clarity, co-design practical solutions, and ensure their hybrid frameworks genuinely meet operational needs.

Variations Across Australia

Hybrid working isn’t applied evenly nationwide.

Some highlights:

• ACT: 52% of employers have no mandated days – staff are simply encouraged to come in.
• WA: 29% mandate four or five days in the physical workplace (one of the highest rates).

Industry matters too. AHRI notes that sectors like food production or frontline service roles simply don’t have the option of remote work. Those organisations follow more traditional patterns out of necessity.

The Big Picture for SMEs

When you put all the research together, a clear narrative emerges:

Hybrid work is stable, valued, and likely to remain a core part of Australian workplace design for the next several years.

But it’s not a ‘set and forget’ solution. SMEs need to address:

• Employee communication and consultation
• Performance management in hybrid settings
• Maintaining trust and accountability without micromanagement
• Team cohesion and culture-building
• Flexibility equity across different job types
• Clear expectations around attendance, availability, and responsiveness

It also means rethinking old school ways of working. Leaders who are uncomfortable with hybrid work often struggle not because the model is flawed, but because their systems, processes, and communication styles haven’t adapted to it yet.

Hybrid work succeeds when the framework supports it. Not when everyone just hopes it will “work itself out”.

The Bottom Line

AHRI’s research paints a positive picture: hybrid working is delivering benefits, helping companies attract and keep talent, and improving wellbeing and productivity.

But it also reveals the cracks that appear when businesses don’t proactively manage hybrid arrangements, especially in areas like consultation, performance, and collaboration.

For SMEs, the challenge (and opportunity) is clear: hybrid work can be a strategic advantage, but only if it’s shaped intentionally, communicated clearly, and reviewed regularly.

Need Help Making Hybrid Work ‘Work’?

If you’re feeling the pressure of hybrid arrangements, unsure how to structure them, or noticing tensions in your team, you’re not alone and you don’t need to navigate it without support.

If this is something you’d like to explore, reach out and we can work discuss how to identify what’s working, what’s not, and how to design hybrid practices that genuinely strengthen your business.

Ref: Australian HR Institute. (2025). Hybrid and Flexible Working Practices in Australian Workplaces in 2025. Melbourne, Australia: Australian HR Institute

Nick Hedges is the founder of Resolve HR, a Sydney-based HR consultancy specialising in providing workplace advice to managers and business owners. He recently published his first book, “Exiting underperforming Team Members – The Inside Scoop”. It is a practical response to the most pressing HR challenges, which can be found at https://resolvehr.com.au/.

Disclaimer: The contents written do not constitute legal advice and do not cater for individual circumstances.   The information contained herein is not intended to be a substitute for legal advice and should not be relied upon as such.