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The Risks and Opportunities of the Hybrid Workforce Model

work from home

The economic and social disruption caused by the global pandemic in 2020 has been described as “devastating” by the World Health Organisation.

For many businesses, the pandemic has shattered the traditional 9-to-5 work at the office mind set. In 2016, the Australian Bureau of Statistics reported that around 30% of Australians regularly worked from home (WFH). Today, as people and businesses adjust to the realities of the ‘new normal’, between 80% to 90% of organisations encourage or require their employees to work from home as travel restrictions, lock-downs, hard borders and COVID-19 hotspots become part of the new normal.  In response, many organisations have adopted hybrid workforce models that combine remote working with office work to maintain business continuity and minimise disruption of services.

The Hybrid Workforce

In the hybrid workforce model, employees come into offices when it makes sense, but have the flexibility to work remotely also, and this helps optimize the balance between collaboration and flexibility.  Whilst many organisations reported success with remote working during the immediate response to the pandemic, some still question the long-term value of the hybrid workforce model.

As we enter 2021, COVID-19 vaccine distribution is underway, and more people will continue to be vaccinated throughout the first half of the year. That means companies will soon be faced with the difficult dilemma of if, when, and how they should return to in-office work.  Research shows that organisations that never offered remote work before are now embracing it. The hybrid workforce model brings many risks and opportunities and just like any other business model, understanding and managing the risks and opportunities are critical to success.

1. People risks

Health & Safety: Whilst in the office, the organisation has a greater ability to control the physical health and safety risks within the office environment.  There are rules to follow, emergency procedures, regular cleaning, ergonomic desks and chairs and designated responsibilities…so things work in an orderly manner.  At home however, there are other distractions like partners, kids, pets and neighbours.  That means, the organisation can only try to influence an employees physical working environment at home, but it is more difficult to control.  Some of the most common issues are those related to excessive use of computer screens and bad posture. This can be prevented with the right equipment and small adjustments. For some employees, the lack of space and unsuitability of the home working environment are real issues.  Some employees may feel a weight of responsibility when it comes to risk and safety issues.  Work with each employee to designate a dedicated work area.  Regular risk assessments of the home workspace and physical environment as well as education in respect to wellbeing, safety and good ergonomic practices are important.

Isolation & mental health: Out-of-sight, out-of-mind is another risk.  In this situation, organisations or managers fail to engage regularly with employees other than at necessary times or for important matters. This lack of social interaction and feeling isolated remains one of the most significant challenges for people working remotely.  It is also important for managers to ensure all employees are psychologically safe. The impact of isolation due to WFH and the inherent uncertainties of the pandemic can increase anxiety and the risk of employees developing mental health issues.  A recent survey found that 82% of remote workers complained of burnout and 52% said they worked longer hours than office-based colleagues.  It is very important to maintain regular communication through emails, virtual meetings and phone calls to check in from time to time.  When it is safe to do so, face-to-face events are encouraged as social interaction is strongly correlated with workplace engagement and satisfaction.

Skills and capabilities: Not all employees will have the skills necessary in a hybrid workforce model.  Training and development of people will be even more important.   Many of us can adapt to new technology and new business processes, but not all of us. With the possible changes to systems and processes from the shift, a training needs analysis has never been more important.

The small things will matter more and more.  Remembering birthdays and work anniversaries will be more important in a hybrid workforce model.  Organisations will need to engage their employees like their customers for a positive employee experience.

2. Cyber risks

In response to the pandemic, organisations adopted cloud services faster than they had planned, which unintentionally increased attack surfaces and created security opportunities for hackers. Some experts believe that this rushed procurement will heighten the cyber risks. A UK study last year found that 3 in 5 of IT decision makers believe that remote workers will expose their firm to the risk of a data breach. Hackers have started to capitalise on this increased connectivity, hasty solution adoption and organisations will have to balance the shift to new technological innovation with security and business continuity development.

Whilst people may be physically working from home, they are not disconnected from the organisation’s information system and processes.  At the office, the organisation has a greater ability to control the cyber security risks through many layers of cyber security controls.  At home however, many different devices could be connected to a single WiFi and just one compromised device could pose a security risk to an organisation’s information assets. A recent survey of 400 security operations (SecOps) professionals found:

  • Insecure home networks and cloud adoption are the biggest threats
  • 57 percent reported seeing more phishing threats since the shift to remote work
  • 42 percent said that their alert volume is higher now than it was prior to the pandemic
  • 26 percent of respondents said their security posture is worse than it was before the pandemic

At minimum, all employees should have up to date antivirus and malware software installed on their devices, organisations should encrypt all sensitive data at rest and during transmission, and multi factor authentication should be standard for all credentials.

During the time of heightened risk, additional controls are required and providing all staff with regular communication and training about the range and types of cyber risks is essential. With even the most cyber-security aware home workers just one click away from making a mistake, organisations need policies in place so that employees know who to immediately report a threat to.

3. Productivity risks

Are people more productive at home than at the office? Remote working has really challenged attitudes towards presenteeism as people move to WFH. There is a risk that people may not be as productive, falsify timesheets and look to secondary employment opportunities.

Some organisations are going to extreme measures to monitor the activities of employees by tracking system audit logs and using Artificial Intelligence…we call this ‘snooping’.

Sure some employees may abuse the work from home situation, but most won’t.  Whilst the organisation can put the appropriate WFH policies and procedures in place, it is up to managers to enforce them.

Management by outcomes will become more important in a hybrid workforce model. Rather than micro-managing, good managers set clear objectives, expectations and timeframes and communicate them with employees.  They trust their employees.  Weekly one-on-one meetings and regular touchpoints help to build trust and provide regular feedback. Clearly define each employee’s scope of work and your expectations of them while working remotely.

Some employees have enjoyed working form home and now prefer not to return to the traditional 9-5 office grind…even when it is safe to do so. According to the Institute of Internal Auditors, talent management is seen as one of the “most relevant” risks facing organisations in 2021.

For employees who believe a home-office setup is more productive, is it because of a lack of commute or fewer office interruptions. The largest take-up in remote work was office based work e.g. in educational services and finance.  However, service companies in food, retail and construction were among the lowest adopters, because it is more difficult to do their work remotely.

4. Governance risks

Organisations that are committed to good governance and transparency build trust with their stakeholders. A shift to a hybrid workforce model will require adjustments to a number of policies and procedures, even position descriptions and performance management processes. Whilst some organisations may have remote working policies, there may be additional broader matters that need to be considered.  “Remote” work can mean different things to different people—are employees expected to be online a certain number of hours each day? Will they need to travel to the office on a regular basis? What happens if there is a new COVID-19 cluster in their suburb?

Without appropriate policies to reflect the new hybrid workforce model, defined expectations and outlined responsibilities, there is a risk of inconsistent application of the hybrid model, inconsistency and imbalance in decision making across the organisation and potentially disengaged employees.

5. Process risks

Business processes have been designed, refined, implemented and audited over many years. Business processes typically include internal controls that are designed to safeguard against a number of possible problems that can affect the organisation.

Will the same processes that worked effectively in the office environment still work remotely? What effect would a process failure have on the organisation? What are the new risks the organisation is exposed to?

Some processes and activities rely on face-to-face meetings and interactive business relationships.  Remote work could put some business relationships at risk—particularly those that rely on face-to-face meetings and networking. Some processes rely on hard copy documentation, reports and physical signatures.  How will remote working impact these processes?

Some processes heavily rely on third parties.  How will your third parties continue to deliver services? Do they have a recovery plan? Is there a risk your third parties could be adversely impacted by the pandemic or even be put out of business?

Any new hybrid workforce model will require a review and possible change to business processes and controls.

6. Culture risks

Let’s start with leadership. Leaders must have the right mindset and skills to lead and manage both in a remote and office environment to effectively implement a hybrid workforce model.  Leaders should show empathy to people who prefer to work from home – provided it does not impact organisational objectives, the quality of work or service delivery.

During the initial stages of any crisis, like the pandemic, an authoritative, commanding and directive style of leadership is needed because of the level of uncertainty.  During recovery stage, a different style of leadership is needed – one that is more consultative and empathetic.

Todays leadership requires much more than driving results and productivity – it requires keeping the company norms, values and culture alive and looking after employees as they navigate the challenges of remote work and the new normal. Management need to reinforce these goals and values regularly.

Managing a remote team comes with its own set of challenges.  Management should cultivate an environment of trust and psychological safety with remote employees. Collect feedback regularly and make adjustments and more importantly – people should feel confident that the team will not embarrass, reject or punish someone for speaking out.

For managers, emotional intelligence (EQ) will be more important than cognitive intelligence (IQ) or any kind of technical skill. EQ requires self-awareness, self-regulation, motivation, empathy, and social skills.

Communication is sharing information to support the organisation’s objectives and strategy. Communication may sound simple, but it’s easy to get it wrong. Overcommunication overwhelms employees, whereas under-communication makes them suspicious.

When organisations made the shift to remote working, there was an emphasis on mainly digital communication and collaboration tools.  With a hybrid workforce model, organisations need to review the communication frameworks to reflect that some people may be working from the office, while others continue to work remotely to minimise the risk of communication breakdown.  A range of communication channels should be considered:

  • some face-to-face events – training, team building and meetings
  • regular and prescheduled online check-ins with employees
  • regular department meetings ranging from weekly, fortnightly to quarterly town hall meetings
  • instant messaging apps – to add some variety

Remote working isn’t always conducive to building meaningful relationships with co-workers in the same way that working in the office is. Social interaction is strongly correlated with workplace engagement and satisfaction i.e. when employees are continuously exposed to the behaviour of their managers and colleagues, they are able to grasp the culture, standards of behaviour, performance and communication much more quickly than they would remotely.

The Opportunities

Lower business operating costs – Social distancing will mean less staff per square metre and higher cost per head.  Enhanced hygiene will result in an increase in cleaning costs as well as consumables like disinfectants, wipes and sanitisers.  By adopting a hybrid workforce model, organisations may be able to reduce office costs such as rent, outgoings, office supplies, utilities, consumables etc. and can reinvest the savings in growth strategies to improve profits. A survey of business owners on their pandemic insights found that 44% of organisations expected remote work to increase profits.

Improving job satisfaction – One of the most significant advantages to working from home is having the flexibility to juggle other things to create a work-life balance to enjoy life more. Other benefits include decreased commuter stress, lower travel costs, being able to work in solitude – without too much interruptions.  Done well, all these things lead to improved job satisfaction.

Access to a global workforce – Allowing workers to work remotely opens up a whole new world…literally. The work-from-anywhere shift will unlock new productivity and growth opportunities. Emerging countries are producing more skilled workers and organisations can tap into people located 5,000 miles away in another state or country. Some organisations will benefit from a multi-lingual workforce.  If you do engage resources from another country, beware of culturally appropriate communication and non-verbal business etiquette. Management must understand the time zone differences, local employment laws, religious and cultural diversity, local customs and accepted norms of behaviour.

Thriving local businesses – As less people travel to central business districts, local businesses like cafes and restaurants, gyms and retailers are experiencing greater patronage from people who work from home.

Refresh the business model – Some businesses have used the pandemic to change the business model they were previously operating under and either refine or rebuild a new business model.

Reduce carbon footprint – Our planet is also experiencing environmental benefits from reduced travel.  Less travel to work has alleviated the stress on our roads and public transport systems resulting in a noticeable drop in pollution and greenhouse gas emissions across the globe.  Carbon Brief experts predict the environmental impacts of the coronavirus lockdown will contribute to the largest-ever annual fall in global carbon emissions.

Ok, so our list of opportunities is not exhaustive, but we encourage every business to think through the opportunities specific to them.

Are you ready to reimagine the workplace?

Whilst the Covid-19 pandemic has increased risks, it has really challenged organisations and people in a good way. In 2021, organisations have an opportunity to reimagine and improve the workplace. Gone are the days of rows and rows of desks as we welcome community hubs that will accommodate a more hybrid workstyle tailored around people, collaboration and engagement.

The 9-to-5 work day is dead. In our always-on, always-connected world, it no longer makes sense to expect employees to work an eight-hour shift, every day and do their jobs successfully. Through good risk management, effective leadership and secure technology, a hybrid workforce model can be a welcome change for better in the post-pandemic world.

How we can help

Now is the time to shift from crisis response to embracing uncertainty. InConsult is committed to helping organisations manage risks and opportunities.  We have extensive experience in audit and assurance, risk management, cyber security, climate risk, crisis management, business continuity, third party risk assessment, emergency management, disaster management and pandemic planning.

If you would like support in becoming a more resilient organisation or managing the transition risks and opportunities to a hybrid workplace model, contact us to discuss your needs.