The continuing saga between the information technology business process management (IT-BPM) sector and the Fiscal Incentives Review Board (FIRB) has perhaps been one of the most debatable concerns between business and government sectors during the pandemic. Here you have a battle of mostly good intentions. The FIRB argues that 100% on-site work will enable faster economic recovery and provide support to the network of micro, small and medium enterprises (MSMEs), such as transport and food services, surrounding IT-BPM companies. On the other hand, IT-BPM firms are conscious of their employees’ preference for remote and hybrid work, which reaches a point where forcing on-site work might threaten mass resignations across the industry. The culmination of this situation is a compromise: for Philippine Economic Zone Authority (PEZA) registered IT-BPOs and Registered Business Enterprises (RBEs), PEZA has allowed for 30% work-from-home (WFH) until September 12, 2022, provided they request a Letter of Authority (LOA) for hybrid work arrangement. But the question remains, what happens to hybrid work arrangement after September 12, 2022? Will there be available workforce willing to report on-site? Will it be a choice between tax incentives and employees?
The reason why it is so important to stay updated on the developments in this story is because it is the best signifier for what is to come in terms of post-pandemic realities. Surveys show that 87% of global leaders expect to be more flexible in their working arrangements, with 72% of companies planning to offer a hybrid option. But as easy as it is to say that remote work is here to stay, whether in fully remote or hybrid format, government and institutional support is still a vital factor in determining the ease of hybrid adoption and normalization.
In the U.S., Wall Street banks have been divided on whether to continue WFH arrangements, even as they compete for talent with tech companies who have opted to either push their office return indefinitely or just allow permanent WFH for their staff, even after the pandemic. On the other side of the world, India, a big competitor of our IT-BPM sector, is gearing up with appropriate policies and tax treatments to support work from home.
The gist is that as a nation, we need to imagine the future of work together. The government must carefully review its policies for on-site reporting as a requirement for availment of tax incentives. Impact on the tax incentives must be clearly provided by Fiscal Incentives Review Board (FIRB), PEZA and BIR to ensure that companies are guided in evaluating their options. Also, the government must not lose sight of the fact that available talents and incentives are the companies’ considerations for investing in the Philippines. A balance must be achieved for the benefit of the Filipino people.
In the meantime that hydrid work arrangement is allowed to a certain extent, it may be worth to revisit the benefits of remote work and learnings in implementing a hybrid work arrangement.
Remote work allows companies to cast a wider net for recruitment and help ease the problem of talent shortage. However, companies also have the arduous task of developing and financing their own remote work policies and infrastructures, and P&A Grant Thornton is among them. Our own firm started its hybrid work in April this year, and here are our learnings so far to help would-be adopters on this journey:
Identify pain points
Before anything else, it should be noted that there is no one-size-fits-all model for hybrid work arrangement. Thus, companies would need to rely on their own experiences of working remotely to identify the most pressing issues that they need to resolve. Companies within and outside the IT-BPM industry also need to do an introspective study of their structure and operations to find the model that works.
A hybrid work arrangement can affect everything from a company’s office space, such as if they need to redesign or cut down on space altogether, to strategies for employee well-being and incentives. Opening a line of communication wherein employees can be honest about their working preferences can allow decision-makers to tailor their policies accordingly.
Note that for PEZA registered IT-BPOs and RBEs, one of the conditions for the allowed hybrid work arrangement is WFH employees shall be accorded all benefits due them under the national labor laws, rules, and regulations for said engagement; their salaries and other benefits shall not be lower than those accorded to/enjoyed by office-based employees; their workload and performance standards shall be the same as those for the equivalent office based employees; there shall be no diminution in the salaries and benefits of the WFH employees, including their overtime pay and night differential.
Learn from early adopters
Saying that there is a need to look inward is different from saying there is no lesson to learn from early hybrid adopters. On the contrary, companies have adopted hybrid to mixed success and one of the more concerning revelations to come out of their experience is that mostly remote workers, women especially, are effectively shutting themselves out of opportunity. For good reason, employees may feel pressured to show up more at the office under the assumption that doing so would get their name recognized and help further their careers.
As such, leaders need to nurture a company culture that 1) makes remote workers feel included and connected with their colleagues and 2) lessens the effect of proximity bias and instead encourages equal opportunity and promotion for all. Leadership training for team managers, greater focus on outcome-based collaboration, continued team-building exercises and coaching sessions even if done online, are some of the strategies companies can employ to ensure every member can shine and receive ample recognition for their effort.
Upgrade your tech stack
Finally, retaining a remote aspect to work means companies need to accelerate their digital transformations. They need to improve their tech stacks, in terms of both the ease with which they collaborate and communicate and the protection of their data across remote endpoints. The former is more a matter of experimenting with applications, such as a virtual whiteboard, to encourage creative brainstorming and possibly still using screens during meetings so that remote workers have equal visibility and representation.
The latter is a more technical problem, to say the least. But to start with, companies can promote the use of stronger authentication on employee devices and accounts, either by upgrading mail protocols and software to allow for multi-factor authentication or by practicing a habit of creating more complicated passwords. On the topic of practice, companies can also embed a Zero Trust philosophy in their employees, teaching them their role in keeping company data safe through cybersecurity programs, in addition to embedding it into their infrastructure. Elevating the role of Chief Data Officers and including a technical expert in top-level decisions are also paths companies can take.
When it comes to adopting any new strategy, it is important to have a clear goal in mind before implementing or even drafting a plan. Every aspect of the company’s operations must be taken into considerations. Companies must ensure that such strategies are legally compliant with labor, tax , and other applicable laws. In the very early stages, companies should define the metrics of success for their hybrid working arrangement so that it is easier to look back and discover which areas can still be improved upon and which areas do not work at all. That said, navigating the hybrid work reality is at least one topic where companies can be on a level playing field. May we learn and grow together for months to come.
As published in The Manila Times, dated 27 April 2022