Hybrid working — What multinational businesses should consider when designing a hybrid working policy. Using the stakeholder salience model as the lens to consider all important stakeholders.
** This is an essay I wrote as part of my MSc in Management studies at Trinity College Dublin, for my Ethical Business Module, perhaps there is something of value to multinational businesses thinking of designing a hybrid working policy, that considers wider company stakeholders. All comments and criticisms are always very welcome.**
In early 2020 the virulent COVID-19 virus spread in the EU and US (Taylor, 2021). Overwhelming companies and pushing them into a new way of working they have not encountered. However, this proposition attempts to look beyond the apparent devastation to find the silver lining in this hyper-sensitive and devastating issue. COVID-19 catalysed the way we work (BBC, 2020). Letting workers for the first time in many cases consider working remotely, albeit involuntarily. Thanks to technological advances, digitally enabled knowledge workers have had this ability for quite some time. However, old corporate doctrines made it hard to test remote work effectiveness.
“Success in a hybrid work environment requires employers to move beyond viewing remote or hybrid environments as a temporary or short-term strategy and to treat it as a [long-term] opportunity.” (Colleta, 2020)
In the above quote, the Vice President of Gartner, George Penn, suitably identifies one of the key stakeholders, the employers and highlights the potential long-term opportunities for organisations who ultimately embrace hybrid working. Businesses who can adopt hybrid work successfully can gain from improved work for their employees, increased happiness, productivity, and many additional benefits that may ultimately translate into increased revenue (Rosencrance, 2021). Furthermore, Cisco estimates that the switch to hybrid working has resulted in around $500 million in cost savings across the last five years (BBC, 2021). Nevertheless, they also commented that reducing real estate valuations might negatively influence some businesses financial accounts. At the same time, professor Bradford S. Bell claims that large multinational companies like SalesForce with large office spaces can save by not needing as many buildings and benefit from going hybrid in the long term (Bell, 2021). Of course, upfront investments are required to make hybrid working possible. However, the promise of economic sustainability and the potential gain for investors, employers, board of directors and wider stakeholders makes this idea worthwhile exploring and one the report supports.
This proposal will attempt to classify other cardinal stakeholders and illuminate the possible paths to guide the Board of Directors on The Future of Work and Ethics and advise a long-term strategy for employees returning to work in a multinational company.
The report will avoid being pontificate and alternately maintain an objective claim and evidence reasoning. The suggestions will be bilateral where appropriate, as we have two countries to keep in mind; the US and Europe. The approach is grounded in eclecticism, pulling from the influential ideas from ethical business & decision making, stakeholders salience & conflicts, governance and corporate responsibility. The overarching content of the report is framed in Carroll’s Pyramid of Social Responsibility. In the first paragraph, we have already tackled the mandatory economic base by alluding that the hybrid model can be sustainable.
A legal layer is paramount to the potential solution. Therefore, the proposed solution must be consistent with government laws, regulations and meet the bare minimum requirements (Carroll, 1991). Milton Friedman agreed with Caroll that people must play by the existing rules. Hence, our recommendation insinuates that employers implementing hybrid work must meet these basic legal measures; i) employment laws, ii) health and safety laws, and one unique to the EU, GDPR.
Taking Ireland, a European country, demonstrates the potential actions that the board of directors must consider noting that similar but not identical steps are required for the US offices.
i) We advise that companies draft their policies to tackle employment law similar to how AIB bank in Ireland implemented the “right to disconnect” policy and plans that will guide a healthy work-life balance (McGreevy, 2021).
ii) The Irish Health and Safety Authorities propose that employers do a risk assessment for home working to comply with health and safety laws. They suggest compiling a list of all essential equipment for day-to-day tasks and examining possible dangers at the home ‘work station’; this may be via video (HSA, 2021). Employers should also think about altering their insurance policy to protect themselves in remote working scenarios. The insurance industry adapted to remote labour effectively, supporting employers and employees claims (Taylor, 2021).
iii) When employees work remotely, GDPR rights of employees privacy must be respected. However, worker rights must be balanced against the employer’s right to protect the enterprise’s reputation, assets, and equipment (Miranda, 2021).
A top-down approach is required in multinational organisations, which must embody and practice their new policies at the executive level and ensure the safety of their workers (Jackson, 2020). Managers should be given training and checked on regularly to ensure they pass on the new culture to other employees. The employer has all the power and responsibility on their shoulders because there is currently no law establishing a right to remote employment (Miranda, 2021), placing the power with the employer stakeholder group. Managers should leverage their good worker relations to influence policies and bring information from the bottom-up to executives to help shape policy. This will make workers feel empowered and heard (Jackson, 2020).
Carroll’s ethical layer of the pyramid focuses on what is right and avoids harm. However, here Friedman’s and Carroll’s ideas diverge. For example, Friedman believed the goal of an organisation is to maximise shareholder value (Friedman, 1970). However, we propose moving toward the idea of satisfying all stakeholders (Mitchell, Agle and Wood, 1997).
Managers and leaders will be the enforcers of change in organisations (Stobierski, 2020). To be effective, managers will require sufficient training to navigate online and the offline world simultaneously. They will also be expected to be cognizant of the dynamic nature of the stakeholder salience model. Effective managers should prioritise stakeholders in the second tier, namely the dominant, dependent, and dangerous stakeholders, and avoid stakeholders becoming definitive, as it may be too late to act (Jain, 2021). This selective attention to essential parties is needed to avoid myopia created by less-important stakeholders, who, despite potentially having valid claims are non-priority due to being in the lower tiers of the salience model.
By looking at the intersections of legitimacy and urgency (figure 1), we can see that a group of potential stakeholders emerge that managers need to be very conscious of. They are employees who have were not treated by the EU or US laws. They can quickly move to the definitive tier by gaining media attention. Superstar managers should regularly review the salience model to ensure that they are not causing negative externalities.
Figure 2 identifies more primary, secondary, and public stakeholders and lists each group’s interests and conflicts.
We have talked about employers and managers as primary stakeholders; let us now turn our attention to the employees. How do employees feel about hybrid working? Despite the promises that remote working brings, it is not without its challenges. For example, there is statistical evidence that mental health rose during the first outbreak, known by the call volume in helplines increasing by 35% six weeks after the first outbreak (Brülhart et al., 2021).
On the other hand, today, returners to on-site work have reported adverse mental health effects and stated that flexibility in the workplace could help with this, according to McKinsey’s study (Coe et al., 2021). A potential solution is to take successful elements of traditional working and incorporate them into the hybrid model. The benefit of working in the office was that employees needed to get up, get dressed, get ready for the day, and the commute was light exercise. Employers could think of GDPR compliant non-intrusive or optional monitoring, requiring employees to do 20 minutes of walking in the morning and evening, stimulating blood flow and getting employees ready for their day.
According to BBC studies, there is something known as ‘proximity bias’ stating that those employees who spend more time with management get promoted ahead of peers. Employers will need to design promotion criteria based on meritocracy vs hours in the office (Lufkin, 2021). However, even this issue is double-edged as legislation like GDPR may require some administrative work to be done at the office.
Finally, consider the peak of Carroll’s CSR pyramid, namely the philanthropic domain. Using the ideas on strategic CSR from (Jamali and Jain, 2015). Our suggestion would be to incorporate strategic philanthropy by selecting closely related to the target multinational company to give value pro bono to organisations that were negatively affected by covid-19. This strategic sharing of skills and experience could bring about future employees, clients and even learning for our own team. MIT article called this idea ‘skill swaps’ yet they used it in an internal company context (Fosslien, 2021).
Practically speaking, figure 3 is the adoption from Gartner of what effective four modes of collaboration in hybrid work. Every multinational company is different, with a contrasting cohort of employees. A tailored and unique approach is needed for each heterogeneous group. Young people and newcomers to a firm should not have as much mobility as other workers, as they need time to acclimatise to the new work culture. Employers and managers should aim to maximise employee well being, happiness and sense of security as happy workers are productive workers.
In conclusion, this report is for the proposition of hybrid working normalising the idea that employees can be trusted and work on their terms can benefit themselves and the organisation they work in.
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