The Impact of Hybrid Work Models on Employee Engagement and Retention: A Comparative Study of Remote, On-Site, and Hybrid Employees in Pakistan’s Information Technology Sector

Abstract

Background: As the post-pandemic shift to hybrid work has introduced a new and uncertain HRM dilemma, either between hybrid or fully remote work setups, or between fully remote and fully onsite work, it is important to understand whether hybrid is the best option for maintaining employee engagement and retention. Evidence in other contexts, such as emerging markets like Pakistan’s IT sector, where flexible work has grown quickly, though not uniformly, and where turnover rates are high, remain fragmented.

Research purpose: In this research, we aim at comparing the employee engagement and retention (turnover intention) between three different work arrangements (fully remote, hybrid, and fully on-site) and investigate whether the work arrangement predicts the employee engagement and retention after controlling for demographic and job-related characteristics. It also examines whether there are any arrangement effects, and if so, whether these effects are moderated by managerial support and work-life balance.

Methodology: A cross-sectional survey methodology was used to gather information from 312 full-time employees from IT and IT-enabled services companies located in Lahore, Karachi and Islamabad over an eight-week period. The UWES-9 was used to evaluate engagement, and a three-item scale was used to measure turnover intention, with attenuating mechanism factors being managerial support and work-life balance. One-way ANOVA with Tukey post hoc tests, hierarchical multiple regression and bootstrapped mediation analysis were used.

Results: Hybrid work employees had the highest engagement scores (M = 5.71), and the lowest intentions to quit (M = 2.14), followed by remote work and on-site work employees, who did not significantly differ. After controlling for other factors, work arrangement was significantly related to engagement (β = .19, p = .003) and turnover intention (β = −.21, p < .001). The arrangement effects were mediated by managerial support and work-life balance, with 22.6% and 16.7% of the total effects respectively. There was a significant inverted U-shaped relationship between remote days per week and engagement, with the highest score occurring around 2.7 remote days per week, in a supplementary continuous specification.

Conclusion: Hybrid work is likely to provide the best engagement-retention ratio in the context under study, in line with job demands-resources and social exchange theory. HRM should consider hybridity as a designed resource configuration and not as a location policy.

JEL Classification: M54; J63; M12; J24; O15

References

Asif, D. M., & Khan, D. M. A. (2026). The impact of AI-enabled HRM practices on employee work engagement: The moderating role of employee digital literacy. Journal of Business Insight and Innovation, 5(4), 91–103. https://doi.org/10.63544/jbii.v5i4.220

Aurangzeb, & Asif, M. (2026). Transformational leadership and employee innovative work behaviour in Pakistan’s IT sector: The moderating role of psychological safety. Journal of Social Sciences Development, 5(5), 366–400. https://doi.org/10.59075/jssd.v5i5.390

Batool, S. F., & Asif, M. (2026). Impact of hybrid work on employee engagement: The moderating role of work-life balance among academic and administrative staff in universities of Pakistan. Journal of Business Insight and Innovation, 5(6), 28–45. https://doi.org/10.63544/jbii.v5i6.99

Bloom, N., Han, R., & Liang, J. (2024). Hybrid working from home improves retention without damaging performance. Nature, 630(8018), 920–925. https://doi.org/10.1038/s41586-024-07500-2

Charalampous, M. (2026, February 3). Hybrid work: Fears, misconceptions and the potential benefits for the Cypriot workplace. Limassol Chamber of Commerce and Industry. https://www.limassolchamber.eu

Gajendran, R. S., Ponnapalli, A. R., Wang, C., & Javalagi, A. A. (2024). A dual pathway model of remote work intensity: A meta-analysis of its simultaneous positive and negative effects. Personnel Psychology, 77(4), 1351–1386. https://doi.org/10.1111/peps.12641

Gonzales, E. G. (2025). Exploring the role of workplace flexibility and trust in reducing employee turnover intentions: The moderating influence of reciprocation wariness in hybrid work environments [Master’s thesis, De La Salle University]. Animo Repository. https://animorepository.dlsu.edu.ph

Mokalkar, D., Mishra, V., Chaurasia, A., & Gupta, U. (2025). The impact of remote and hybrid work models on employee engagements: A comprehensive evidence-based analysis. International Journal of Advanced Multidisciplinary Research and Educational Development, 1(4), 55–70. https://www.ijamred.com

Mumtaz, M. M., & Arshad, A. (2025). The impact of remote work flexibility on employee engagement: The moderating role of digital communication competence—A quantitative study in Pakistan. LBS Journal of Human Resources, 1(1), 1–12. https://journals.uol.edu.pk

Nauman, M., Iqbal, A., Shahid, A., Marwat, A., & Jalali, Q. M. (2025). Exploring the effect of hybrid work flexibility on employee innovation performance, mediated by work engagement and the moderating effects of digital leadership competency. Journal for Social Science Archives, 3(1), 1451–1465. https://doi.org/10.59075/jssa.v3i1.283

Nawaz, R., Sadiq, U., & Ghavas, M. M. (2025). Development of a flexible work arrangement scale: Evidence from the IT sector of Karachi. Journal of Social and Organizational Matters, 4(1), 797–812. https://doi.org/10.56976/jsom.v4i1.402

Pakistan Software Houses Association. (2024). P@SHA salary survey report 2023–24. https://www.pasha.org.pk

Rahman, E., & Asif, M. (2026). The moderating role of transformational leadership in the relationship between organizational mindfulness and employee well-being in Pakistan’s educational sector. Journal of Business Insight and Innovation, 5(5), 26–42. https://doi.org/10.63544/jbii.v5i5.98

Safdar, M. M., Asif, M., & Amjad, M. F. (2026). Strategic human resource management in the digital era: A quantitative analysis of perceived EVP, E-HRM practices, organizational trust, and employee retention in Pakistan’s fashion retail sector. TAMSAAL, 4(8), 46–76. https://doi.org/10.59075/tamsaal.v4i8.108

Sajjad, M., Ahmad, N., & Sherwani, N. U. K. (2024). Impact of flexible working hours on organizational commitment and the mediating role of work-life balance. IUP Journal of Organizational Behavior, 23(2), 5–25.

Shaikh, F. A., & Asif, M. (2026). Human-AI collaboration in accounting: A quantitative analysis of generative AI’s effects on professional judgement, decision-making, and financial reporting quality. Responsible Education, Learning and Teaching in Emerging Economies, 8(2), 36–54. https://doi.org/10.26710/relate.v8i2.3955

Terrell, V. (2024). Social support, employee engagement, and turnover intention of hybrid working leaders in the pharmaceutical industry (Publication No. 16698) [Doctoral dissertation, Walden University]. Walden Dissertations and Doctoral Studies. https://scholarworks.waldenu.edu/dissertations/16698

University of Santo Tomas. (2025). Promoting flexible work arrangements: The case of selected medium-size BPO company in Metro Manila. Journal of Economics, Finance and Management Studies, 8(2). https://zenodo.org

Zenodo. (2024). Remote work and employee engagement in the post-COVID-19 era: A qualitative study of Pakistani employees. Bulletin of Business and Economics, 13(2), 1059–1064.