“The cheese tax! You've got to pay the cheese tax… when the cheese comes out, this puppy comes looking.” Nods to Puppy Songs, there’s another type of tax in town—the hybrid coordination tax—and it’s nowhere as cute as your furry friend magically appearing for a piece of cheese.
The Wall Street Journal coined the term 'coordination tax' to define the time and effort employees spend coordinating their schedules in hybrid work environments. Rob Sadow, CEO and co-founder of Scoop Technologies, described it as “the effort that’s required from teams and employees to get together in person, in a world where the days that people have to be in the office are not fixed by the company.”
Empowering teams to decide their hybrid work schedules has proved to be most effective. 46% of employees say they’re more engaged when their work team decides on the hybrid work policy together (Gallup). However, it also brings new challenges for team members spending hours coordinating when they will all be in the office to collaborate. But, fear not! There are easy ways to lower the tax.
What Is the Hybrid Work Coordination Tax?
The hybrid work coordination tax is the cost of coordinating with everyone to ensure that everyone is aligned, communicating effectively, and working together smoothly. Many organizations are following best practices when structuring hybrid work schedules, allowing teams to decide which days they meet. This arrangement allows for more flexibility and autonomy and improves employee satisfaction and engagement. Team-level agreements yield a 13% boost in joy over top-down mandates and cuts attrition risk in half, according to BCG.
However, fluctuating schedules can make it challenging to coordinate time to collaborate on the same project or assignment, which is many teams’ primary purpose when going into the office. Coordinating times together when there's a lack of visibility as to where people are working can also be challenging within teams and especially difficult for cross-functional teams. According to Gallup, 18% of employees feel the biggest challenge of hybrid work is “reduced cross-functional communication and collaboration.” The further removed workers are from each other in the organization, the more difficult it can be to coordinate time together.
What Are the Costs of the Coordination Tax?
The costs of the coordination tax are the time, effort, and resources wasted to ensure everyone is on the same page. Misaligned meetings can impact productivity and project timelines. At the same time, the stress and frustration of trying to get everyone together can negatively affect employee morale and satisfaction. The coordination tax can impact workers in hybrid work environments in the forms of:
Increased Complexity
As the number of people or teams involved in a project grows, the complexity of coordinating them increases. This can lead to more meetings, emails, and other forms of communication, which can slow down progress and disrupt productivity. Nearly half of employees say unwanted interruptions reduce their productivity or increase their stress more than six times a day. For every 1,000 employees, that adds up to $1.3 million in lost productivity a year (TechSmith).
Delayed Decision-Making
More time and effort are needed to keep everyone informed and aligned in hybrid work environments, which can reduce overall efficiency. Coordinating times for involved stakeholders to be together to get consensus or approval may be more challenging. This can lead to delays in decision-making, as times that work for everyone may be more limited.
“Speed is an organizational imperative. Hybrid often creates issues with coordination. [Ineffective] coordination is the enemy of speed. Async is the answer to many coordination problems. Even when you’re in the office.” - Phil Kirschner, Workplace Strategy Leader at McKinsey & Company
Ineffective Communication
Coordinating across teams or departments in hybrid work environments may require additional tech tools, personnel, or processes to ensure time isn’t wasted on trying to communicate. Loss of time due to ineffective communication can incur additional costs. The average full-time employee earning $100,000 to $150,000 loses 46 workdays yearly due to ineffective communication—costing employers about $22,000 a year (Reclaim AI).
What Strategies Can You Use To Minimize the Coordination Tax?
Figuring out the root causes of the coordination tax is the first step to alleviating it. Coordinating in hybrid work environments is challenging due to a lack of visibility when colleagues are in the office. With flexible work, effective collaboration involves:
1. Spell Out Roles and Responsibilities
When employees aren’t sure of what they need to do, they waste valuable time trying to figure it out. According to a 2023 report by McKinsey, 40% of leaders believe that unclear roles and responsibilities cause organizational inefficiency. Help your team work more efficiently independently by clearly defining roles and responsibilities for each team member to reduce overlap and confusion. Leaders should hold periodic cross-functional alignment meetings to ensure teams understand each other’s priorities and dependencies, reducing the need for ad-hoc coordination.
“You can solve [the coordination tax] through a combination of smarter, more thoughtful software and better team practices.” - Rob Sadow, CEO and Co-founder of Scoop
2. Standardize Processes and Procedures
Organizations can help employees work more effectively by giving them frameworks to standardize work outputs. That way, employees better understand what the end result should look like and what they can use to get there, reducing the need for constant meetings and messaging to clarify details. Nearly 4 in 5 workers say they struggle to finish their work because of how many meetings they’re expected to attend each week (Atlassian). Organizations should also document standard operating procedures (SOPs) to ensure everyone—including newly-hired employees—knows how tasks should be done, reducing the need for frequent check-ins and fewer interruptions.
3. Set Clear Expectations and Norms
Establish shared objectives and key results (OKRs) across teams to ensure everyone works toward the same goals. For example, make in-office meetings time for new-team formation and major-initiative kickoffs where everyone spends time together to discuss a project's objectives and norms. Establish team norms for communication and collaboration to ensure everyone understands the best ways to work together. That may include expected response times or specific channels for communicating.
“Free-for-all approaches that depend on individuals and managers to self-organize hybrid work norms don’t succeed—the coordination tax is just too high.” - Brian Elliott, Product Exec and Co-founder of Future Forum
4. Streamline Communication
Communication can break down when there are too many ways to contact one another. Using centralized communication platforms (like Slack or Microsoft Teams) can keep discussions organized and accessible. Additionally, having to constantly check your various communication channels can disrupt your focus and take you longer to get back on track. A study by the University of California found that it takes an average of 23 minutes and 15 seconds to get back on task after being interrupted. To reduce the number of interruptions throughout the day, encourage asynchronous communication where possible, allowing team members to respond when they have time and reducing the need for constant meetings.
5. Support Collaboration with Workplace Technology
Tech tools can help address the physical and time zone gaps that exacerbate the coordination tax problem. Most workers (86%) believe that technology has improved communication within teams, including remote colleagues (Golden Steps ABA).
A workplace management platform like Skedda can show where and when colleagues are in the office, the availability of desks and conference rooms at any given time, and the various types of workspaces available. Additionally, platforms with integrations that tell you who’s in the office and sync with calendars for easy meeting bookings further make coordinating easier among distributed teams.
See Skedda’s integration with Slack and Microsoft Teams to find out who’s in the office.
Project management tools like Trello and Asana can help track tasks, deadlines, and responsibilities, reducing the need for constant status updates and interruptions. In addition to that, asynchronous video communication tools like Loom can help distributed teams catch up on important information on their own time to minimize distractions and prepare team members with the knowledge needed for when they do meet, reducing the need for follow-up meetings.
Minimizing the Coordination Tax
Hybrid work is here to stay, with new ways of coordinating work and collaborating on projects. It’s time to change how teams work with each other to adapt to new working patterns so everyone can be productive and aligned on the same goals. By implementing a workplace management system, communicating clear processes and expectations, and clarifying roles and responsibilities, organizations can help employees thrive in hybrid workplaces.
If you’re ready to start managing your hybrid workplaces more effectively, create your free Skedda account today.
