Future of Work - what is the new world of work going to be like?

Back to the world of work

With the pandemic subsiding, it seems that life at the workplace is resuming. But it would be a mistake to believe that everything can continue from where it stopped in spring 2020.
 

The way of working has to be redefined from the basics, by setting new operational standards for the organisation. A sustainable and flexible framework has to be created, which takes into account employees’ needs as well as changed habits while best serving business objectives. Consequently, the conscious shaping of new norms should be regarded by companies as an opportunity for complete renewal instead of a problem needing a quick fix.

– warns Éva Virág Uzsák, senior manager
at Deloitte Human Capital advisory business line.

How can work be redefined? Instead of merely spending working time, we should focus on value creation, and on shaping an operational framework that best supports it. Everything from the HR strategy through infrastructure to applied technologies should be subordinated to this. We have to keep in mind that the creation of new norms makes a significant impact not only on operation, but on corporate culture, as well. Of course, this change raises countless questions relating to tax and labour law, as well as work organisation.

The early birds are on their way

It would be a mistake to postpone the introduction of the necessary changes until the pandemic is behind us and to wait until external limitations are lifted to consider changes in our operation. Now is the time for organisations to consciously plan their “comeback” instead of merely becoming followers. Several global companies (Google, Facebook, Twitter, Netflix) have already started introducing new working models: some places have defined the future of work as a 3:2 mix of home and office work, based on dedicated collaboration days, while others set the explicit goal that work should essentially be done remotely, with physical presence limited to a minimum. Inspiring examples can be found in Europe, as well. In Spain, an initiative has been launched to test the possibility of an institutionalised 4-day working week. In certain sectors, however, they still can’t wait for life to get back to normal, and only see their own functioning as secure with the formerly standard workplace and typically 8-hour working days. Consequently, the spectrum is quite wide, which also supports the idea that organisations should get inspiration from each other’s approaches, but they have to consciously look for their own best solutions.
 

What changes should we expect?

The future of work is determined by three interconnected dimensions: workforce, the content of the work itself, and the place of work. There are major changes in all three areas, that visibly shaped the world of work even before the pandemic, but the past year has significantly accelerated this change, as well

– said Martin Csépai, director of Deloitte’s
Human Capital advisory business line.

Work is automated due to the spread of advanced technologies (robotisation, cognitive solutions, artificial intelligence, etc.), making it possible to free up employee capacity to perform activities with a higher added value. In case of employees, employers may choose from more variable sources than before. It is not necessarily recommended to think only in terms of full-time employees, as many tasks can be carried out by contractors or hired workers or freelancers and consultants working on project engagements more efficiently and with higher quality. Concerning the place of work, the range of options is much wider than working from the office or at home. We have seen great initiatives of cooperation between corporate and co-working spaces, which can expand the scope of where people can work, providing greater flexibility for employees to better align their work and private life preferences.

Objectives and result-oriented activities

Before creating the new system of work standards, it is especially important to determine organisation-level and business objectives, which the new framework (the flexible work strategy) aims to achieve. It may happen that the different objectives are conflicting, so it is crucial to determine priorities. Regarding business objectives, it is worth thinking in a structured way about the results that will lead to the achievement of the objectives, and this approach can open up new opportunities for many more task-oriented organisations in terms of performance management and evaluation, whose practices may also need to be reconsidered in the context of the transition to hybrid operations.
The activities crucial for the achievement of the required results may provide the basis of organizing work. Defining further key issues: the dimensions of location (space), assets, players, and frequency necessary for the most optimal realisation of each type of activity. It is increasingly being said that teams are playing a much more decisive role in hybrid operations. This is exactly why it is important to involve colleagues in the process of creating new operational and work standards, and to provide them with freedom and responsibility in replying to the most important questions. There is no single recipe for creating the new, flexible work framework. Organisations have to develop alternatives and scenarios that can be flexibly adapted in the light of results and experience, and in the light of new external environmental challenges that may arise.

Hard questions

Many questions that arise in connection with the new operational models are hard to answer, so Deloitte's experts are dealing with them especially. Examples include the question of employees working from abroad: are they subject to Hungarian labour, work safety, and tax regulations, or those of the place of work? According to Dr Brigitta Gál, leader of Deloitte Legal Law Firm’s labour law team, this is a manageable risk even if the parties specify in the employment contract that the employment is governed by Hungarian law. In order to settle the issue in a satisfactory way, it is certainly worth looking at each case not only from the perspective of Hungarian law, but also from the perspective of the law of the place of work. As far as taxation is concerned, the 183-day rule comes to mind, i.e. if you work abroad for a period shorter than this, you do not incur any tax liability in that country.

However, this rule only applies in certain cases. For example, if the employee is accompanied by his family, he could become subject to tax even if the individual is working in the country for less than 183 days. This is why the determination of tax residence is vital when talking about taxation

– says Tímea Kiss, senior manager
at Deloitte’s Tax business line.

Another, similarly complicated issue is the regulation of home office. In such cases, it is hard to determine what kind of cost reimbursement employees are eligible for. Until 23 May this year, the effective government decree provided great freedom to the parties to agree on this issue. In case of remote work, employees’ contributions are not subject to tax; otherwise, the general rules of the VAT Act are to be followed. A new work safety rule stipulates that employers must provide information on how their employees can create safe working conditions at home.