May 2022

SGV thought leadership on pressing issues faced by chief executives in today’s economic landscape. Articles are published every Monday in the Economy section of the BusinessWorld newspaper.
30 May 2022 Vicky B. Lee-Salas

Fintech: Powering digital transformation in financial services (First Part)

First of three partsWhen the smartphone became commonplace more than a decade ago, it was inconceivable for many consumers to make online purchases using their credit cards. It felt way too risky to give away sensitive credit card information in an online transaction, especially when done on a mobile device. Today, we’re faced with yet another inconceivable wave: that of opening our banking data to entities other than the bank itself.Fintech services have become widespread in Asia and the eastern Pacific Rim. Advanced fintech systems are now woven into the fabric of daily life practically in all markets in Asia where the majority of consumers have smartphones that provide them access to a growing range of virtual financial services.Asia is seen to be taking the lead in the development of fintech. Due in part to significant concerns with financial inclusion, economies in Asia are seeing a rapid pace of fintech growth. Consumer use of fintech-powered services have doubled in only two years across key Asia-Pacific markets. Fintech adoption has been at 67% in Hong Kong, Singapore, and South Korea, based on the latest EY Global FinTech Adoption Index. China, which leads with a penetration rate of 87%, sets the pace for fintech innovation. The index found that 99.5% of Chinese respondents are aware of online apps that facilitate money transfer, mobile payments, and non-bank money transfers.Many more changes are anticipated in Asia’s financial services landscape. We expect three dominant themes in Asia-Pacific markets over the next two to three years: financial regulation taking on a more active role in encouraging innovation; increased competition among virtual banks; and, increased adoption of open banking, a system that requires banks and clients to give third-party providers access to a most guarded information – clients’ banking data.REGULATORS’ OPENNESS TO INNOVATIONFinancial regulators have to weigh competing priorities, and in relation to fintech development, they have to strike a good balance between ensuring regulatory processes preserve stability and fostering financial innovation. In many parts of the world, regulators are reported to be trying new approaches to regulation so they could significantly boost oversight.In a study, leading science and technology think tank Information Technology and Innovation Foundation (ITIF) observed that many governments, seeing the value of fintech transformation, are taking steps to promote financial innovation. It cited Singapore’s creation of a fintech and innovation group to facilitate deployment of technology in its financial sector. It also took note of the launch of fintech promotion strategies in Australia and the UK. The level of stringency differs across economies, but the common thread is that they are “taking novel and interesting approaches to financial innovation with an eye to maximizing their relative competitiveness in financial services,” according to ITIF.It’s a role that regulators are embracing as markets continue to deregulate. Where before financial regulators in Asia tended to be the gatekeepers of banking and other financial services, now they are becoming advocates for flexibility, innovation and inclusion.VIRTUAL BANK COMPETITION HEATS UPFinancial regulators in the Philippines have been equally proactive as their peers in the region in pushing for fintech innovation even as they strive not to lose sight of their responsibility to foster financial stability. FinTech Alliance Philippines has been appreciative of the role of regulators, citing the creation of the Financial Sector Forum that brings together representatives from regulatory agencies as a means to rationalize regulations.The Philippines is among a few economies in Southeast Asia where regulators have issued licenses for digital banking, one area that is anticipated to record significant developments that will contribute to altering the financial landscape in the next few years. The Bangko Sentral ng Pilipinas (BSP) has already approved several digital banks’ applications. The emergence of these new entrants is seen as a game-changer in the delivery of financial products.The BSP sees the rise of digital or branch-less banks potentially driving the digital transformation of incumbent banks to stay competitive and to innovate their service offerings. Digital banking, which essentially does away with the need for customers to physically visit a bank branch to open an account or make transactions, is an important component of the central bank’s Digital Payment Transformation Roadmap. The level of encouragement from financial regulators varies across markets in Asia-Pacific, which may relate to the goal of financial inclusivity, a key theme in Southeast Asia.While the entry of virtual banks is fueling competition in banking in the region, their impact on the banking landscape is not expected to be dramatic in the short term. But in the long run, they can drive meaningful change. The traditional big banks are taking notice. In the case of Hong Kong, incumbent banks are lowering deposit minimums and sweetening account offers in anticipation of the launch of new digital banks.OPEN BANKING IN ASIAWhile virtual banking does deserve all the attention it is getting, some industry observers also see the future in open banking, a system that allows fintech providers access to banking data with customer consent to provide the latter additional services or perform transactions on their behalf. Open banking is foreseen to dramatically improve the customer digital experience.It goes far beyond the convenience of digital banking in which the set-up of bank branches is no longer required save for an office to receive customer complaints. In open banking, a mobile wallet platform or a ride-hailing service can be a super-app with expanded services to include lending, for instance, and can evaluate loan applications quickly by having pre-approved real-time access to a customer’s banking data. It can also be a personal finance app that lets you program it to “manage” your finances and tell you how much you can invest in stocks according to how much money goes into your linked bank accounts at any given month.Access is granted through open application programming interface (API), which establishes a connection between third-party providers and users’ bank accounts. This allows for banking data to be gathered and leveraged to perform a service for the customer.International Data Corporation and Finastra’s Open Banking Readiness Index found Hong Kong, Singapore, and Australia to be the top three markets in Asia in terms of progressive open banking. In the case of the Philippines, the BSP is laying down the foundations for open banking with the release of the first version of the draft Circular on Open Finance. Released in December 2020, the draft circular proposes the creation of an Open Finance Oversight Committee, an industry-led self-governing body overseen by the central bank. It would supervise open banking practices and set procedures and standards, including API architecture, data, security, and outsourcing standards.In January, the Bangko Sentral once again reinforced its support for innovation with the presentation of its three-year strategy to get open finance off the ground to boost innovation and competition in the Philippines by enabling third parties, such as fintech companies, to access and use customer finance data to develop new apps and services. Increased fintech adoption and innovation will continue to benefit most markets in Asia, contributing immensely to transforming the financial services landscape in ways that improve financial inclusion in emerging markets.There can only be progress by leaps and bounds for the fintech industry in the Philippines in the years to come as the market nears that era when very few Filipino workers would still know life before the internet. Banks have already had a good peek into the digital space due to the limitations that the pandemic created, and this can only lead to more confident steps to incorporating fintech products into their offerings.In the second part of this article, we discuss issues on taxation of fintech companies in the Philippines. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Vicky B. Lee-Salas is a markets leader of SGV & Co.

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23 May 2022 Marie Stephanie C. Tan-Hamed

Redefining growth with humans at the core

Companies measure growth by the numbers such as profits, margins, returns, and share prices. They compete and try to win against all odds to meet shareholder expectations with impressive quarterly figures. It is the growth pressure that drives companies and brands to exert tremendous effort to gather data from consumers as they navigate the challenging highways of the digital economy, perhaps oblivious of having regarded the consumers as mere commodities rather than people. All this will have to change if brands are to take the pulse of future consumers who demand more from companies that use digital technology and processes to drive short-term revenue growth.Consumers now expect more and better from the companies they do business with. They are empowered consumers who are not satisfied with brands that only pay lip service to sustainability and purpose-led growth while conveniently sliding back to quarterly earnings as their barometer for success.In the latest EY Future Consumer Index survey, 68% of surveyed consumers think a brand’s behavior is as important as what it sells, while 69% say brands must behave ethically and according to community expectations. Yet only 38% think the positive actions brands are taking are good enough.Companies that have taken heed of the call for sustainability and the new growth strategy talk about long-term value that seeks to assess performance beyond financials to include governance, people, planet and prosperity. This redefinition of growth will need to: drive the innovation of environmentally friendly products and services; redesign customer experience; and build an operating model with humans at its core.GREEN INNOVATIONIn the EY Future Consumer Index survey, 68% of respondents think brands have a responsibility to invest in the sustainable production of goods and services. In addition, 70% say that brands must be transparent about the social and environmental impact of producing their goods and services.This clearly establishes a sense of urgency on fusing planet with profit and rejects the notion that sustainability in product and service innovation can be merely aspirational. Organizations will be better off with commercial, environmental and social sustainability embedded into their purpose, design thinking, prototyping and scaling of products and services.It begins with a little more effort to thoroughly understand a problem before coming up with a solution. Rapid problem-solving often impedes the company’s ability to solve the underlying issue. Staying in the problem longer than one feels comfortable with is a wise step towards driving sustainable innovation that is both planet and profit friendly.FUTURE OF CUSTOMER EXPERIENCEIn shaping the future of the customer experience, it helps to look at the rapid changes in technology. In the last decade alone, technological advancements have challenged companies to rethink the customer experience, and this will be the case over and over again. There is one thing that will be constant though — the human factor that rises above any technology.The EY Global Consumer Privacy Survey shows how customers want to believe in and trust the organizations they do business with. Marketing campaigns alone will not do the job though. For brands to win customer trust, they will need to align to customer values and beliefs and demonstrate that in their actions. This trust is built by knowing and engaging with customers, not as statistics but as individual living, breathing human beings.Engaging with the full spectrum of human needs increases the likelihood of collecting data ethically, and this should result in more trust from customers. This, in turn, enables brands to better anticipate and improve the products and services they deliver to customers, which leads to purposeful growth and the creation of long-term value.With customer centricity embedded throughout the enterprise, customer interactions are much more likely to be consistent. Familiarity and understanding of customer wants and desires will be spread across the different functions in the organization.There are a few ways to fast-track an organization’s way into this future customer experience while delivering on purpose and driving profit at the same time. One is talking to customers regularly and listening to what they say. Marketing chiefs can sometimes assume they already understand customers based on past interactions, and this deprives them of perspective that can be gained from an ongoing dialogue.Interactions with customers that trust the organization can uncover more data, allowing for the organization to combine quantitative information with qualitative perspectives.Marketing chiefs need to shift the mindset of the organization to focus on the desired and organizationally aligned outcome, such as how team members contribute to giving the customer a positive experience, rather than how many gadgets they developed, manufactured and sold.REINVENTING THE OPERATING MODELOrganizations should rethink their business and operating models to truly sustain healthy customer relationships. This is called for mainly because most large organizations were designed according to 20th century principles and founded on rigid structures to organize people only — without considering the impact of technology. This created functional silos that result in disconnects that do not help create a positive customer experience.Based on our EY global organization’s track record in helping clients transform their operating models for customer-centricity, a few key actions have been identified that marketing chiefs can take in partnership with leadership. One of these is creating pod teams that align to the customer lifecycle. A pod is a cross-functional team or a group of individuals with complementary skills working toward a common purpose or to accomplish tasks that form part of a larger project. It transcends existing divisions within an organization. A pod, for instance, may be dedicated to delivering a great welcome experience to all new customers in the first six months, regardless of the product or service purchased. Performance measures will then have to be tweaked to focus on the best possible customer outcome.This cross-functional team needs to be empowered to make decisions for them to be truly effective in delivering the best customer outcome. They are front-facing and therefore capable of seeing how a product or service is performing. Ideally, they should also have the leeway to make data-driven decisions to pivot or shift the direction of a product or service.Redefining growth requires a shift in mindset — a change in the way the organization looks at things to deliver new results. It requires specific steps that go beyond little tweaks here and there. Purpose-washing, or representing the brand as if it is committed to a larger purpose, does not work. Instead, companies need to reexamine their current definition of growth and redefine it in the context of authenticity of purpose and long-term value. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.Marie Stephanie C. Tan-Hamed is a Strategy and Transactions Partner of SGV & Co.

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16 May 2022 Maria Kathrina S. Macaisa-Peña

Winning consumers with a future-fit operating model (Second Part)

Second of two partsConsumer product companies face the challenge of transforming to stay relevant to rapidly changing consumer needs, but global research commissioned by EY reveals concerns in whether leaders are taking the right actions to steer their organizations.In a recent global C-Suite survey, “Becoming Future Fit: Challenges and Opportunities for Today’s Consumer Products Companies,” which was commissioned by EY from MIT SMR Connections, 86% of the surveyed C-Suites said transformation was essential to become future-ready, but they face uneven progress due to conflicting priorities and a shortage of talent necessary to facilitate change. Unless companies find ways to overcome these hurdles, they will fail to achieve their transformation goals and grow increasingly out of step with the demands of tomorrow’s consumers.In the first part of this two-part article, we discussed the first two key design principles necessary to drive agility, responsiveness and resilience: becoming part of dynamic business ecosystems and building upon data and analytics with data fabric. In this second part, we discuss the remaining three key design principles: encouraging talent flexibility, innovating at scale and embedding Purpose into every facet of the organization.For these principles to be at their most effective, it is best that organizations excel in all rather than merely do well in one or two, and they must be accomplished in a manner that builds and sustains trust not just with consumers but with their people and all their ecosystem partners.ENCOURAGE TALENT FLEXIBILITYTransformation will require developing people with deep skills in key areas such as data transformation, but organizations will also need generalists across functions capable of working together in new ways. An adaptive workforce and culture will be able thrive when supported by emerging technologies and new methods of collaboration in a reimagined workplace. In the EY 2021 Work Reimagined Employee Survey, emphasis is placed in putting humans at the center with the future of work enabled by transformative digital tools.INNOVATE AT SCALEEveryone must be involved in the effort to innovate. People on the frontlines are often the best sources of ideas, as they deal with consumer and ecosystem partners directly and on a daily basis, but these ideas are often either not captured or are weighed down by rigid processes.By taking a future-back approach to strategic planning, investing in data and moving toward resilient supply networks driven by data, companies will be able to innovate at scale and enable hyper personalization. The most successfully innovative ideas support technologies and cultures that capture, rapidly develop and scale ideas that work, and move to the forefront of reshaping both customer and industry expectations. EMBED A PURPOSE-LED STRATEGYThe purpose of an organization defines its value propositions, its role in ecosystems, how it attracts and retains talent, its partners and which consumers it serves. Although purpose and sustainability are key drivers of value, they are not always made an integral part of operations. Although sector-specific issues vary, a purpose-led growth strategy can address critical issues of trust, technology, trade and sustainability while keeping humans at the center of every decision.As leaders look to reframe for the future of their organizations, investors, consumers, employees and the wider society mandate them to become more purpose-led in creating long-term value. The objectives are growth that is accelerated yet sustainable, a stronger market position, and a better working world for all stakeholders.KEY ACTIONS FOR A FUTURE-FIT OPERATING MODELWhile there is no clear finish line in the race to become future fit, organizations that transform around the five principles will be in a much better position to stay ahead of changing market forces. Fostering better relationships with their consumers will lead to long-term relationships on foundations of trust while being in a stronger position to collaborate with partners with increased agility, enabling them to bring products to market quicker.CEOs can take three key actions that are crucial in delivering a future-fit operating model, the first of which is to set a leadership vision that disrupts organizational barriers. Although the organization is on a transformation journey, it is essential to ensure the entire organization is on the journey as well. CEOs are meant to challenge the orthodox and inspire action, but the Becoming Future Fit global survey reveals that 63% of leaders expected corporate culture to be a source of resistance, while 55% cited the failure to orchestrate a transformation roadmap to be another potential barrier.Second, CEOs must be realistic in setting timelines to build capabilities. In the global survey, 61% of leaders said it was critical to create a flexible talent pool within two years, but an adjunct professor quoted in the survey reports that it takes three to seven years just to onboard everyone, align incentives, and get buy-in.Lastly, leaders must start from what is necessary in the future, and not based on what they are capable of today. The global survey found that although 77% of leaders said they had the emerging technologies necessary to transform their operating model, 70% identified the need to upgrade their technology infrastructure as a significant barrier to transformation. This contradiction highlights the gap between having the needed capabilities for today instead of tomorrow, creating consequences in delivering the transformation agenda.THE NEED FOR CONTINUOUS ADAPTATIONIt should be established that there is no single business model that can win in the future at scale, as CEOs will need to deliver many different models, strategies and propositions from a core operating model. Leaders will need to keep adapting business strategies and priorities to anticipate potential disruptors and reflect volatile market conditions.This requires a perspective that does not make the present and future mutually exclusive. Leaders must employ the mindset that the value they create today will fund their transformation in the future, while investments made in future transformation will aid in creating value today — presenting the opportunity to create a virtuous cycle. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.Maria Kathrina S. Macaisa-Peña is a business consulting partner and the consumer products and retail sector leader of SGV & Co.

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09 May 2022 Maria Kathrina S. Macaisa-Peña

Winning consumers with a future-fit operating model (First Part)

First of two partsChief executive officers of global consumer product companies face the challenge of transforming their organizations at a rapid pace to ensure they stay relevant to evolving consumers. Part of this challenge entails strategizing and delivering multiple business models and propositions swiftly, but due to time and cost constraints, CEOs cannot build a new operating model from scratch every time something new has to be done.This calls for more agile, responsive and resilient ways of working that will allow consumer companies to pivot overnight when necessary. In fact, according to a recent global C-Suite survey commissioned by EY from MIT SMR Connections, Becoming Future Fit: Challenges and Opportunities for Today’s Consumer Products Companies, 86% of the surveyed C-Suites said transformation was essential to become future ready. However, the study also revealed that there was great uncertainty in whether leaders are keeping the process of continual change in their organizations on the right track.How products, services and experiences are valued is dictated by evolving consumer perspectives, while technology is key to enabling new ways of purchasing and engaging with products. Technology is also what redefines the kind of value propositions that companies can offer consumers, as well as how these propositions are delivered. There are increasingly more options in how companies can design, create, market, combine, package, and deliver their products and experiences to get them closer to the consumer than ever, enabled by technological capabilities in data and analytics.CEOs will need to apply a transformation mindset and create a C-Suite agenda reflecting the new reality of things. With the pandemic bringing to light uncertainty and the urgent need for technological change, these and more factors have already changed every aspect of a consumer’s life and will continue to do so. Their needs, expectations and behaviors have shifted in ways that put the old ways of working and the companies that propagate them at risk.The current times require companies to be agile, responsive, and resilient. These characteristics can be built into a business by applying five interconnected design principles that CEOs must follow to lead systemic transformation and become future-ready.The first of this two-part article will discuss the first two principles: becoming part of dynamic business ecosystems and building upon data and analytics with data fabric.BECOME PART OF DYNAMIC BUSINESS ECOSYSTEMSCompanies that harness dynamic business ecosystems are better positioned to drive capital efficiency and innovation that creates long-term customer value. It becomes imperative to have a good understanding of ecosystems to stay ahead of the pace of change, especially in anticipation of potential disruptors.Those who participate in business ecosystems are more likely to create increased value in a group than they would individually, putting companies who are unable to adapt at the risk of falling behind. By building ecosystem models into the structure of their value creation strategy, consumer companies can more effectively navigate the digital space and more quickly generate customer value.A previous Suits the C-Suites article, How to win Asia-Pacific consumers in the new era, found that digital business ecosystems have emerged in recent years to allow companies to complement each other and offer interconnected products and services in a singular integrated experience. This is already seen in the super apps that consumers are familiar with today, with local examples such as ride-sharing apps with expanded services that include on-demand purchase assistance, food delivery, and even bill payment functions.BUILD UPON DATA AND ANALYTICS WITH DATA FABRICCompanies are facing more pressure than ever to become data-driven as leaders understand the value of data and use it to generate valuable insights. While a listening organization that is built on data and analytics allows CEOs to make timely, informed decisions, simply prioritizing analytics is not enough. Data fabric, a set of independent services put together to provide a single, focused view of data relevant to business across all sources, will be necessary for many large enterprises to operationalize data in order to address specific challenges as well as innovate.Digital networks and their data flows serve as the connective tissue and nervous system that lets the body of the ecosystem function by integrating disparate data sources. Data fabric connects the threads of information across an enterprise, delivering value in the short term with a long-term transformation strategy. It is not designed to collect and store information, as opposed to data warehouses, and there is no need to replicate data or start from scratch when searching and aggregating it.By utilizing the data fabric approach, data is integrated into useful formats that allow for maximum reuse. It enables sharing, portability and governance by intertwining threads of structured and unstructured data to form a consolidated view made available to users in formats they can use and in terms they can understand.In the second part of this article, we discuss the remaining three key design principles necessary to drive agility, responsiveness and resilience: encouraging talent flexibility, innovating at scale, and embedding a purpose-led strategy into every facet of the organization. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.Maria Kathrina S. Macaisa-Peña is a business consulting partner and the consumer products and retail sector leader of SGV & Co.

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02 May 2022 Czarina R. Miranda

Managing the hybrid workforce (Second Part)

Second of two partsA look into worker sentiment points to a general preference for an arrangement that involves flexibility in when and where employees perform their duties.For one, the recent EY Future Consumer Index shows employees “losing interest in pre-pandemic work patterns,” a finding that reinforces those made in the EY 2021 Work Reimagined Employee Survey that showed the majority of surveyed employees in Southeast Asia preferred not to return to pre-COVID ways of working.In the first part of this article, we looked at the rise of the hybrid workforce and tackled the challenges in managing the workplace. Now we will look at the challenges of keeping employee well-being at the forefront in the hybrid work environment.Two years of remote work have given employees more choice over how they spend their time and how to be productive outside of the office. It has given them a better appreciation of how important the quality of their time is in comparison to how much they earn. They have found renewed enthusiasm for staying in and buying experiences rather than new material goods.It’s a cultural shift that can have profound implications for corporate leaders. One area that will demand greater attention is managing the workforce and the company culture as organizations institutionalize hybrid work strategies. We look at a few key items critical to success in embracing the flexibility that most employees crave for after years of remote work.THE RIGHT WORKFORCE STRATEGYThe level of uncertainty on how an organization’s “return-to-office” position unfolds post-pandemic can be as high as that felt in the first couple of weeks when the pandemic catapulted much of the country into lockdown in 2020. How organizations have remained productive throughout the last two years can fuel speculation among employees who favor continuing with telecommuting.They certainly will look to the leadership team for a clear message on the workforce strategy that will be in force in our post-pandemic world. It may not suffice to simply confirm that an organization will embrace a hybrid workforce strategy. Corporate leaders will have to answer such questions as whether the organization is leaning towards a remote-first strategy or is it gravitating back to the traditional set-up with a little flexibility.But how does the organization arrive at such a decision? Do we bring the employee along for the journey and listen to what they have to say? All this will depend on company culture. Once a strategy is chosen, the workforce approach can be documented properly so that the entire organization is prepared to support this decision.Communicating this to the entire organization can help various teams decide on how they can best support and enforce the strategy. Will a playbook be necessary to manage the change over the next six to 12 months?A clear workforce strategy and a communication plan can work favorably for employees. It tells them what the company wants and gives teams the chance to contribute to achieving goals with the end-view of maintaining the hybrid workplace.SETTING MILESTONESThe last thing corporate leaders would want to be in is a situation that requires closer monitoring of employee activity. Will putting in place measures that allow management to do real-time tracking of employee activity run counter to the workforce strategy? Workers may look at closer monitoring as a sign of a lack of trust, and this may eventually adversely affect company culture and employee engagement and retention.To choose a hybrid team as a workforce strategy moving forward may be taken to mean as accepting that productivity has not been compromised over the past two years, when the pandemic forced us into remote work. This is the message that workers will read from a workforce decision to go hybrid. It can reinforce their own argument that it is possible to keep productivity up even in the confines of their homes or other alternative work sites.It pays to set milestones on productivity to help teams work in unison to continue to deserve the flexibility that they desire from hybrid work arrangements. Clear milestones make it easier for teams to figure out on their own how to achieve team goals even as they remain in the comfort of their homes for most of the work week.It is advisable though for teams to have a set day of the week when they are compelled to be in the office for various reasons. It can create what many have referred to as moments of spontaneous exchange of ideas that lead to innovation, heightened productivity, or better ways of doing things in the organization. It can also provide an “anchor” for your people to feel connected to the organization and to each other. This is especially meaningful to possible new hires who were onboarded during the pandemic and who may not have yet had in-person interactions with other team members.PROMOTING INCLUSIVE LEADERSHIPChoosing which set of workers can be allowed to work from home and who remains on-site may not be as simple as identifying who faces clients and who works at a plant. Hybrid work models can be vulnerable to instances of resentment when disgruntled staff can feel left out of the perceived benefits of remote work, or conversely, remote employees may feel that those physically present in the office are more “favored” by the managers. It’s friction that, if left unresolved, may eventually create trouble within and among teams and stand in the way of productivity. However, building a company culture that fosters inclusion and a sense of belonging will help prevent this from happening.With a remote workforce, an inclusive workplace culture becomes all the more important in keeping employees engaged. It all begins with a sense of belonging that can translate to employee satisfaction with work and productivity. In the traditional work arrangements, it is easier to cultivate that much-needed sense of community among team members. Remote work, however, can hinder interaction that is a building block to building belonging.Leadership can play a vital role in this department to ensure that employee welfare programs adapt to these realities. The hybrid workplace also presents an opportunity to revisit programs on diversity, equity, and inclusion (DE&I), as this can contribute to successful recruitment and employee retention.There can be many more challenges to learn along the way as most organizations take this route. Leaders’ responses can vary from one organization to another, but what matters is keeping morale and productivity high. In designing remote and hybrid work strategies, it is best for leaders to place employee well-being at the forefront and optimize available resources to support employees. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.Czarina R. Miranda is the People Advisory Services Leader of SGV & Co.

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