THE unfinished saga involving the information technology business process management (IT-BPM) industry and the Fiscal Incentives Review Board (FIRB) is a battle of good intentions for the most part. The FIRB argues that 100% on-site work will enable faster economic recovery and provide support to the network of micro, small and medium-sized enterprises – transport and catering, for example – surrounding IT-BPM companies. On the other hand, outsourcing companies are aware of their employees’ preference for remote and hybrid work, to the point that forcing on-site work could lead to mass resignations across the industry. The situation led to a compromise: for IT-BPOs registered with the Philippine Economic Zones Authority (PEZA) and Registered Business Enterprises (RBEs), 30% Work from Home (WFH) was allowed until September 12, 2022, provided companies request a letter of authorization. The question that remains, however, is what happens after September 12? Will there be an available workforce willing to show up on site? Will it be a choice between tax incentives and employees?
It is important to keep abreast of developments in this story as it is the best sign of 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 working – whether fully remote or hybrid – is here to stay, governmental and institutional support remains critical in determining the ease of hybrid adoption and standardization.
In the United States, Wall Street banks are divided on whether to pursue telecommuting agreements even as they compete for talent with technology companies that have chosen to push the return to the office or simply to allow permanent telework for staff even after the pandemic. On the other side of the world, India – a big competitor to our IT-BPM sector – is gearing up with appropriate policies and tax treatments to support working from home.
The bottom line is that we need to imagine the future of work together. The government should carefully consider its on-site reporting policies as a requirement to benefit from the tax incentives. The impact on incentives should be clearly detailed by the FIRB, PEZA and BIR to ensure companies are guided in evaluating their options. Also, the government should not lose sight of the fact that available talent and incentives are considerations for investing in the Philippines. A balance must be struck for the benefit of the Filipino people.
Until hybrid working is permitted to some degree, it may be worth revisiting the benefits of remote working and apprenticeships in its implementation. Remote work allows companies to expand their recruiting network and alleviate the problem of talent shortages. But companies also have the daunting task of developing and funding their remote working policies and infrastructure. P&A Grant Thornton launched its hybrid working program in April this year and here are our learnings so far to help future adopters:
Identify pain points. First of all, it should be noted that there is no single model. Businesses will need to draw on their own experiences to identify the most pressing issues they need to address. Companies inside and outside the IT-BPM industry also need to do some 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 to employee wellness strategies and incentives. Opening a line of communication where employees can be honest about their work preferences can allow decision-makers to tailor policies accordingly.
Note that for IT-BPOs and RBEs registered with PEZA, one of the conditions is that WFH employees must receive all benefits due to them under national labor laws, rules and regulations for said commitment; salaries and other benefits must not be lower than those granted/entitled to office workers; workload and performance standards should be the same as for equivalent office workers; and there should be no reduction in wages and benefits, including overtime pay and night shift premium.
Learn from early adopters. To say that it is necessary to look within is different from saying that there are no lessons to be learned from the first users. Companies have embraced the hybrid with mixed success and one of the most concerning revelations is that most remote workers, especially women, are effectively foregoing opportunities. For good reason, employees may feel pressured to show up more in the office assuming it will get them recognized and help them advance their careers.
As such, leaders must nurture a company culture that makes remote workers feel included and connected with their colleagues and mitigates the effect of proximity bias, encouraging equal opportunity and promotion for all. . Leadership training for team leaders, a greater focus on results-driven collaboration, continued team-building exercises and coaching sessions – even if done online – are just a few. strategies that companies can use.
Upgrade your tech stack. Maintaining a remote aspect at work means companies need to accelerate their digital transformations. They need to improve their technology stacks in terms of both the ease of collaboration and communication and the protection of their data on remote endpoints. The first is more about experimenting with apps, such as a virtual whiteboard, to encourage creative brainstorming and possibly still using screens in meetings so remote workers have equal visibility and representation.
The latter is a more technical issue, to say the least. For starters, companies can promote the use of stronger authentication on employee devices and accounts, either by upgrading messaging protocols and software to enable multi-factor authentication, or by making a habit of create more complicated passwords. Companies can also embed a zero-trust philosophy into employees, teaching them their role in protecting company data through cybersecurity programs, in addition to embedding it into their infrastructure. Elevating the role of chief data officers and including a technical expert in high-level decisions are also avenues companies can take.
When it comes to adopting a new strategy, it is important to have a clear objective in mind before implementing or even writing a plan. Every aspect of a company’s operations must be considered. Companies must ensure that policies comply with the law. At the very beginning, they should set the parameters for success so that it is easier to look back and find out which areas can still be improved and which ones are not working at all. Navigating the reality of hybrid working is a topic where companies can be on equal footing. May we learn and grow together for months to come.
Des Politado-Aclan is the director of tax at P&A Grant Thornton. P&A Grant Thornton is one of the Philippines’ leading audit, tax, advisory and outsourcing firms, with 24 partners and more than 1,000 associates. We would love to hear from you! Tweet us at @GrantThorntonPH, like us on Facebook at P&A Grant Thornton and email your feedback to [email protected] For more information, visit our website at www.grantthornton.com.ph.