How HR Drives Retention and Engagement in a Hybrid Work Era
Hybrid and remote work are now part of the business landscape. Yet they come with new risks for retention and engagement. Gallup’s 2024 report revealed that hybrid employees are often the least engaged group when managers lack training. At the same time, fully remote employees face greater risks of isolation. Without intentional support, they disengage or leave.
Turnover is expensive. SHRM’s 2022 Retention Report estimated that replacing a salaried employee costs between 50% and 200% of their annual pay. For a smaller company, that can mean the difference between profit and loss each quarter (or even each year). Retention, therefore, is not just an HR issue. It is a financial one.
So where does HR fit with the small business plan? Whether fractional or in-house, HR professionals help CEOs design hybrid work models that balance productivity with engagement. Evidence points to four high-impact levers.
Manager capability: Gallup has long shown that managers drive 70 percent of engagement variance. In hybrid environments, training managers in digital leadership and feedback practices is essential.
Structured communication: A 2023 CPHR Canada survey found that employees thrive when collaboration norms are clear. Knowing when to meet in person and when to use digital tools prevents misalignment. This can be built on good polices, good internal communications, and the sharing of good goals and values across the company.
Fairness in recognition: Research from the University of Toronto in 2022 confirmed the risk of “proximity bias.” In-office employees often receive more credit than remote peers. HR can design fair systems that reward outcomes, not presence.
Listening systems: Regular pulse surveys and stay interviews surface problems before they become resignations. Gallup’s data shows that companies that listen to employees early keep more of their best people.
Fractional HR is particularly valuable here. Smaller firms often lack time to build hybrid frameworks. They may also not have the capacity to build and share new policies, implement engagement strategies, train leaders for hybrid and remote teams, communicate company values, develop recognition frameworks, and stay proactive rather than reactive. A fractional partner can step in, design systems quickly, and coach managers to sustain them.
The bottom line for CEOs: hybrid work requires intentional design. Companies that view engagement as a strategic lever, not a side project, will retain more talent in 2025. Those who ignore it will pay the cost of turnover.
Move HR can help you design hybrid policies, train managers, and build engagement systems that retain top talent. Contact us today to see how fractional HR can make hybrid work a success in your business.
