Working from home poses a threat to the corporate culture

30/11/20

The likelihood of integrity risks is increasing due to the increasing gap between say and do

Working from home has now become a part of many people's daily lives. And this is having an impact on corporate culture. It leads to an emotional disconnection from the company and with this, the risk of cultural alienation. The impact of this should not be underestimated, say PwC professionals Wendy van Tol, Stijn van Driessen and Yoran van Dam. ‘It could increase stress and reduce creativity, but could also lead to integrity-related risks because people are less likely to do exactly what they say.’

Corporate culture determines the success of an organisation

The success of organisations can often be attributed to their corporate culture. This culture manifests itself during (sub-)conscious interactions between employees. In the current climate, there are no physical staff gatherings, no more quick chats in the office and no more introductions to new colleagues in the office ‘so they can smell the place’. But these fleeting interactions actually play a major role in shaping and promoting corporate culture. 

Influence on beliefs and values

The environment in which people spend most of their time has an impact on their behaviour, beliefs and values. Prior to the Corona crisis, people’s time was divided between their homes and the workplace. But this has now shifted towards an environment that is dominated by people’s spouses, family, housemates or themselves, if they live alone. Because working life has shifted to the online environment and is taking place online, sub-conscious corporate cultural norms are disappearing. In the long-term, this will have negative social consequences and will result in business risks. 

The gap between say and do

The culture of an organisation shapes the professional behaviour of its employees. It corrects people, informs them and helps them comply. The absence of the ideal corporate culture will thus have an impact on employee behaviour, integrity, work ethic and social control. This will increase the likelihood of divergent habits and alternative interpretations. The effect: a gap between what the organisation promotes they do, and what employees actually do. 

Risks to physical and mental health

The absence of an effective corporate culture is also accompanied by risks to physical and mental health. People experience more stress when they feel isolated. It also increases the risk of burn-out and decreases motivation, commitment and job satisfaction. Negative feelings are more likely to manifest themselves than feelings of happiness and positivity. And this in-turn has an impact on the culture of the organisation, which may lead to a downward spiral of corporate culture.   

The cost of diminishing commitment

A study by PwC shows that the cost of diminishing commitment can be anywhere between 125 and 500 million euros. Increased isolation and stress could cost between 50 and 200 million euros. Decreases in innovation and productivity could lead to losses of between 200 and 800 million euros. That adds up to one-and-a-half billion euros. 

Essential to reinforce corporate culture 

Although it may appear impossible - even in the current situation where many people mainly see and hear one another digitally - organisations can actually take action to reinforce corporate culture and prevent cultural alienation. Here are five suggestions:

  • The goal - i.e. purpose - and values of your organisation must be given concrete substance in the new situation. Give people practical tools and instructions on how they can live up to the purpose and values ​​from home, and when operating in a fully digital working environment. 

  • Make your employees think differently (shift in thinking) about the impact of the pandemic and also allow them to actively participate in accompanying discussions on how to reconfigure their future. 

  • Be aware of shifts from Us (as an organisation) to Me (as an individual). Address this by initiating a dialogue about purpose and values of employees, and how they match those of the organisation. Talk about how each individual contributes to the bigger picture. The conversation about purpose is now more vital than ever. 

  •  Also identify boundaries; i.e. which online and home working behaviour does not fit in the corporate culture, and address people if such behaviour is encountered.

  • Continue to show empathy by communicating in an open and caring manner. Continue to pursue harmony and ensure well-being. People within a group need to feel welcome, inclusive and appreciated. Managers should thus carefully consider how they can create such an atmosphere for each employee, to prevent the downward corporate culture spiral. 

Of course, this list is not exhaustive, but it does offer an effective foundation for getting started. In this way, working from home and a connection with the corporate culture go hand-in-hand and will prevent cultural alienation from becoming the new normal.

Working from home (too much) can cost organisations 1.5 billion in the long term

If all employees who are able to work from home, even after the corona crisis, start working an extra day from home, this could lead to costs for their employers in the long term. These costs are related to the effects of less collaboration, less engagement of people with the organisation and isolation and stress. These costs can run from 375 million to 1.5 billion per year. Employers can take various measures to mitigate the risks of working from home, and therefore also the costs.

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Contact

Wendy van Tol

Wendy van Tol

Partner, PwC Netherlands

Tel: +31 (0)62 353 44 50

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