Amid the ongoing Covid-19 pandemic, the multinational steel behemoth Tata Steel Ltd decided to implement an ‘Agile Working Model’ policy for its employees that came into effect on November 1, 2020. The new working model will facilitate its employees to work from home (WFH) for up to 365 days a year. Even officers who were required to be based out of a particular location could WFH for an unlimited number of days a year.
The new policy intends to signal a shift in mindset of how a workplace should operate, and move towards a compatible model for the future. It was initiated as a pilot for one year, and it could allow a large number of employees to WFH even after the pandemic. Will Tata Steel’s model be the future of workplace in the post-pandemic world? Would such a model help Tata Steel foster an organisational culture that offers its employees numerous benefits while making the company more competitive and agile?
Agile model
As per the new model, the selected officers at Tata Steel could choose to WFH, and once normalcy returned, opt to work from any location (work-from-anywhere) of their choice across India. Atrayee S Sanyal, Vice-President, HRM (Designate), Tata Steel, said that with its newly acquired experience with WFH the company felt that around 20-30 per cent of the roles could actually work from any location. Hence, they were making efforts to digitally enable people to manage machines and plants remotely.
Tata Steel planned to initially implement this policy across roles such as digital marketing, IT support, sales and HR, strategy and planning, and quality management. In the first phase of the pilot programme, 10 per cent of Tata Steel’s officers would get the opportunity to work remotely. Going forward, up to 30 per cent of such employees would get this benefit. Tata Steel was aware that there could be problems cropping up related to salary structure, project deliverables, and employees misusing the flexibility. But the top management was clear that they would try to find solutions to such issues and continue the policy even after the trial period. With the initiation of the Agile Working Models Policy, Tata Steel anticipated a number of benefits not only for the company but also for its employees.
Benefits to company
One of the main objectives of the new policy was to cut costs. As part of the initiative, Tata Steel vacated its New Delhi sales office in upscale Connaught Place and moved to the head office of Bhushan Steel, which it had acquired in 2019, to save costs. The steel maker was also considering whether to vacate or consolidate its other offices in New Delhi, Kolkata, Chennai, Mumbai, Nagpur, and Indore.
The top management was also of the opinion that the attrition rate would come down if it provided career opportunities at the location of the employee’s choice. This new policy could help Tata Steel to retain talent pan India and become more agile and future-ready, and strengthen its employee value proposition.
Benefits to employees
The policy would help Tata Steel to move away from the traditional thinking of productivity being contingent upon fixed hours of work within its office premises. Flexible working would provide employees the freedom to select work locations of their choice and also help them make decisions pertaining to their personal life. This could help them to support ageing parents or working spouses with non-transferable jobs.
Tata Steel’s new policy would also help ensure a better employee work-life balance. It would be beneficial to new parents who faced difficulty in managing professional life and childcare. The agile model would also ensure continuity of work for employees, especially those with disabilities, in their respective work enabled environment, presenting more opportunities for them.
Creating a sustainable future
Tata Steel was forward-looking when it came to introducing various policies for its employees. It had introduced a new human resource policy in December 2019 that allowed employees from the LGBTQ+ community to declare their partners and avail of all HR benefits permissible under the law. Tata Steel had also initiated a five-day week in 2016.
Tata Steel believed that investing in people and striving to be an employer of choice should be an area of its focus. It emphasised the need to focus on human resource managers harnessing emerging technologies to drive transformation within the company. The steel maker wanted the HR team to implement various tools and technologies so that it would be able to quickly tackle the unprecedented storm of changes coming its way on a daily basis. The company believed that it was no longer about just managing the present situation but more about anticipating and creating a sustainable future for the organisation.
Analysis
The Covid-19 pandemic has caused unprecedented disruption in the way people live and work. Most people are working under completely new conditions and are experiencing many first-time challenges that require them to have flexibility to work differently. Continuous hours of uninterrupted work may not be feasible, as many employees need to deal with eldercare and childcare, health issues, and difficulties in securing essential supplies at home. Companies that are able to develop strategies to build trust between leaders and employees will see stronger work relationships as well as performance.
During the Covid-19 pandemic, many organisations including Tata Steel introduced the ‘Work from home’ policy, or remote work policy, where some of their workforce can WFH full-time while others telecommute part of the week or a couple of days per month. Apart from WFH, many organisations have also offered the ‘work-from-anywhere’ option to employees, offering them the freedom to work in libraries, coffee shops, or co-working spaces.
Finding the right person for certain high-skilled jobs is challenging for companies. Hiring them remotely allows organisations to look for talent beyond a particular region. Instead of hiring a semi-qualified candidate from a nearby locality, companies can look nationally or even internationally until they find a candidate suitable for the position, irrespective of gender and physical abilities. The agile model is also expected to attract employees, especially those with physical disabilities, presenting more opportunities for them.
Remote employees are likely to be happier in their jobs as they have a better work-life balance. Telecommuters appreciate being able to work when and where they want. Avoiding the hassle of a daily commute also saves employees both time and money. Studies reveal that remote employees feel more valued, less stressed, and better engaged, which could contribute to employee longevity. The benefits of working remotely, either full-time or part-time, appeared to encourage employees to stay with an organisation longer than they would have otherwise. Also, many organisations found that having a distributed team actually decreased staff turnover.
Tata Steel believed that the attrition rate could come down if it succeeded in providing career opportunities at the location of the employees' choice. The company’s new policy helped its employees to maintain a work life balance, which contributed to employee loyalty toward the company. The retention of talent pan India also helped it to become more agile and future ready.
Earlier organisations were sceptical about the productivity of employees working remotely. But the Covid-19 pandemic forced companies to shift their working location from the traditional office set up to home. Many organisations have found that if employees manage to find a peaceful place in their homes and set up a mini-office to work remotely, they are likely to be more productive than in the usual office environment. Improved productivity helps organisations to gain more revenue. Besides, employees who are mildly sick can still work most of the time if it means not having to go into the office. This helps companies report fewer unscheduled absences from remote workers. Similarly, employees can take care of a sick child or make a doctor’s appointment without taking a full day off work. Fewer absences create significant savings for a business.
And of course, for organisations there are huge direct cost savings due to reduced overheads — reduced real estate needs, renting out an office, buying office equipment and supplies (computers, phones, electricity, heating and air conditioning, and the overall preventive maintenance that comes with renting a space.
Selecting a working model
When companies re-imagine the post-pandemic organisation, they need to pay careful attention to the effect of their choice of working model on organisational norms and culture. It is important to opt for a ‘hybrid virtual model’ that has a mix of on-site and remote working possibilities.
A company must look to select the best fit model that provides stability, social cohesion, identity, and belonging to all employees, whether the employees are working remotely, on the premises, or using a combination of both. In general, companies tend to make the decision based on the factors they intend to optimise, such as real-estate costs, employee productivity, access to talent, and employee experience. But, in practice it can be difficult to optimise one without considering its effect on the others.
Partially remote work, large HQ: In this hybrid model, company leaders and most employees spend the majority of their time at one or two large principal offices. The ability to access talent and the individual and team productivity would be high in this model. However, the real estate cost would also be higher.
Partially remote work, multiple hubs: In this model, there are multiple proportionate-size offices with leadership and employees dispersed among all the offices. The ability to access talent and the individual and team productivity would be high. The real estate cost would be relatively lower than the first hybrid model.
Multiple micro-hubs: Here, the leadership and employees are dispersed across small-footprint “micro-hubs” located in various geographies. In this model there is a higher possibility of accessing talent as there are multiple micro-hubs that are dispersed. Employee productivity and real estate costs would be similar to the multiple hubs model.
Partially remote work, with flexible space: There are no permanent offices in this model. The company would rent temporary (for example, monthly) rented space in select cities for periodic in-person gatherings and collaborations. This model offers the highest possibility to hire and retain talent. Employee productivity would be relatively similar to the other working models just described, but the real estate costs are the lowest or negligible among the four hybrid working models.
If a company has 80 per cent of employees working remotely for only one day per week and working on-site the other four days, then it is easier for it to create a common culture, generate social cohesion, and build shared trust. In such a scenario, the partially remote work-large headquarters model would be suitable. If a company has a third of its employees working remotely 90 per cent of the time, it becomes important to bring those remote workers into the office more frequently. In such a scenario, the multiple hubs, or multiple micro-hubs models might be the better choice.
No matter which model the company chooses for hybrid virtual work, the essential task will be to carefully manage the organisational norms that matter most when adopting any of these models.
Tata Steel’s new policy gives us a glimpse of future workplaces. It’s a promising model and the company seems to have the vision, resources, and management commitment to implement it successfully. And in doing so, Tata Steel has gravitated towards building a trust and outcome-based organisational culture that makes the company more agile, efficient, and better-prepared to face any future uncertainties.
(Debapratim Purkayastha is Director, Balaswamy Pasala is Research Associate, and Jitesh Nair is Research Faculty, at IBS Case Research Centre, Hyderabad.)