Hybrid work model will erode organizational culture, auditor survey finds

The research carried out by the Chartered Institute of Internal Auditorsargues that hybrid working is leading to a “cultural crisis” for companies.

In a survey by the institute of more than 700 senior auditors, nearly half said organizational loyalty was lost in this new way of working. Additionally, retaining talented employees had become an issue, as had fraud detection.

Google, Microsoft, EY, KPMG and PwC as well as law firms Clifford Chance and Freshfields have all embraced the new work-from-home model and indicated they will make it a permanent part of their business model.

Listeners from the UK and Europe took part in the CIIA survey. The findings “highlight a growing crisis in post-pandemic organizational culture, which has the potential to trigger a chain of negative impacts on broader business structures,” the CIIA said. Heli Mooney, Head of Internal Audit at Ryanair, said: “Most companies are focused on fixing hybrid working model issues from a technical and practical perspective.”

Mooney believes that a dilution of strong organizational cultures will lead to risks for management, primarily with talent retention and increased risk of fraud.

Remote and work-from-home options have become a necessity in the new world of the pandemic, which has led to a nearly year-long lockdown across the globe. Companies have been forced to adopt this option if they want to overcome the crisis and maintain the fires at work and at home.

For some companies, the transition was easier because they already offered flexible working hours and were even technically equipped to do so with all the digital tools available.

Others had to quickly adopt and adapt to the new working model. Notwithstanding the pros and cons, the need of the hour was to keep the books in suspense. Most found the new model lucrative and more productive. The hybrid model of a few days in the office and the rest of working from home seems like the ideal answer to overcoming the disconnect.

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

Respondents flagged other areas of concern that have arisen due to the pandemic-related way of working. Most found business continuity, crisis management and disaster response to be areas of concern. Cybersecurity and data security, followed by health, safety and security, were other issues people were worried about.

What stands out is the erosion of organizational culture that garnered the most votes. People put this above the risks of financial liquidity and insolvency.

Respondents said the reduction in face-to-face interactions between co-workers was bound to affect team spirit and efforts to create a cohesive culture.

“Cooler moments or conversations on top of a desk simply cannot happen in a virtual environment and it takes conscious thought to recreate them when working remotely,” said Hywel Ball, UK Chairman. of the accountant EY. “Simple actions, like making sure junior colleagues are invited or updated after meetings, can make a huge difference in whether people feel included.”

One way to manage this is to have periodic practice reviews and incorporate any suggestions or solutions that arise for an inclusive and cohesive organizational culture.

The CIIA said. “We have implemented a behavioral risk assessment that aims to be a forward-looking view of the culture, looking for warning factors that could lead to broader issues,” said Alison McFadyen, group leader of internal audit at Standard Chartered Bank.