Hybrid work model will erode organizational culture, says auditors’ poll

Research conducted by the Chartered Institute of Internal Auditors, says that hybrid working is leading to a “culture crisis” for companies.

In a poll of more than 700 senior auditors by the institute, almost half said that organizational loyalty was lost in this new mode of working. Also, retaining talented employees had become a problem, along with detecting fraud.

Google, Microsoft, EY, KPMG and PwC and law firms Clifford Chance and Freshfields all have adopted the new model of work from home and have indicated that they will be making it a permanent part of their business model.

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Auditors across the UK and Europe participated in the CIIA poll. The results “highlight a rising post-pandemic organizational culture crisis, which has the potential to trigger a chain of negative impacts across wider business structures”, the CIIA said. Heli Mooney, head of internal audit at Ryanair, said: “Most businesses are focusing on ironing out issues of the hybrid working model from technical and practical perspectives.”

Mooney believes that a dilution of strong organizational cultures will lead to risks for management—mostly with retention of talent and increased chances of fraud.

Remote and work-from-home options have become a necessity in the new world of the Pandemic, which has led to almost a year-long lockdown period across the globe. Companies were forced to adopt the option if they wanted to ride over the crisis and keep the work and home fires burning.

For some companies, the transition was easier as they were already offering flexible work schedules and were even technically equipped to do it with all the digital tools available.

Others had to adopt and adapt to the new model of working quickly. The pros and cons notwithstanding, the need of the hour was to keep the account books ticking. Most found the new model lucrative and more productive. The hybrid model of some days in office and the rest work form home seems to be the ideal answer to tide over the disconnect.

But John Wood, chief executive of the CIIA, warned that “the risk of a culture crisis must be considered by all businesses pursuing a hybrid business model”. “It has never been more urgent for businesses to develop strong systems to both identify and mitigate risks to organizational culture, before it becomes a crisis,” he added.

The respondents marked other areas of concern that have arisen due to the Pandemic-related working mode. Most found business continuity, crisis management and disaster response as areas of concern. Cyber and data security followed by health, safety and security were other issues that worried people.

Whats stood out was the erosion of organizational culture that elicited most votes. People placed that above financial liquidity and insolvency risks.

The respondents said that reduced in-person interactions between colleagues were bound to affect team spirit and efforts to build a cohesive culture.

“Water cooler moments or conversations over the top of a desk, simply can’t happen in a virtual environment and they take conscious thought to recreate when working remotely,” Hywel Ball, UK chair of accountant EY, said. “Simple actions, like ensuring junior colleagues are invited or updated after meetings, can make a really big difference to whether people feel included.”

One way of handling this is to have periodic reviews of the practice and incorporating any suggestions or solutions that crop up for an inclusive and cohesive organizational culture.

The CIIA said. “We’ve implemented a behavioral risk assessment which aims to be a forward-looking view of culture, seeking drivers of red flags that could lead to wider issues,” said Alison McFadyen, group head of internal audit at Standard Chartered Bank.

Diana Coker
Diana Coker is a staff writer at The HR Digest, based in New York. She also reports for brands like Technowize. Diana covers HR news, corporate culture, employee benefits, compensation, and leadership. She loves writing HR success stories of individuals who inspire the world. She’s keen on political science and entertains her readers by covering usual workplace tactics.

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