Month: April 2026


by PJ Manalo, Editorial Contributor

If you’re leading HR in an INGO or multilateral right now, you don’t need anyone to tell you that the ground has shifted. Funding conversations that used to be annual are happening quarterly—or monthly. Staffing decisions that used to be strategic are suddenly triaged. At the same time, pay transparency expectations—especially in the EU—are no longer theoretical. They are becoming operational requirements, with real consequences for how organizations explain and defend pay decisions. 

The reality is that these aren’t two parallel challenges. They converge on a single question that sits squarely with HR: 

Can your organization demonstrate how work is structured, how pay is determined, and how individual outcomes are justified—under pressure and under scrutiny? 

This article isn’t about rehashing problems—you already know what they are. It’s about forward motion. The sector’s experience during the funding shocks of 2025 offers a useful snapshot of how organizations reacted in the moment. But what will move organizations forward now is understanding where their HR system is resilient, where it is exposed, and where to act next. That is where HR Effectiveness comes in. 

Funding Contractions Forced Structural Decisions—Fast 

In the latter half of 2025, many development organizations faced an abrupt funding shock that forced immediate workforce decisions. Birches Group conducted a pulse survey with members of its NGO Advisory Group to capture how organizations responded to the disruption. 

The headline isn’t surprising—but it is instructive. Most organizations moved quickly to restructure: layoffs, furloughs, role redesign, and organizational restructuring were widespread. Decisions tended to rely more on roles, locations, and programs than on employee-specific criteria such as performance or tenure. In other words, organizations reached first for structural levers, not individual ones. 

That pattern connects directly to what many HR leaders experienced on the ground. When the timeline is compressed, and the stakes are high, three signals tend to surface quickly—not as “best practices,” but as practical realities: 

  • Organizations act quickly—even without perfect systems—because delay is not an option. 
  • Compensation changes, development pauses, and blunt equity measures are used to preserve internal fairness when choices are limited. 
  • Trust is protected less by policy detail and more by clear, repeated communication. 

Workforce Actions Taken During the 2025 Funding Shock

Three statistics: 86% report restructuring; 53% have changed compensation or benefits; 53% have paused promotions and learning activities.

This snapshot matters because it revealed something important for HR leaders: when funding contracts are suddenly cut, the organization leans—sometimes heavily—on whatever job architecture, role clarity, and pay logic already exists. 

What does this mean practically? When decisions are role-based, the quality of your job architecture is no longer an HR “nice-to-have.” It becomes the backbone of fairness, speed, and credibility. 

A Practical Example: Downsizing, Then Rebuilding (Anne’s Story) 

One organization in the NGO Advisory Group not only experienced the funding shock—it also took the HR Effectiveness Assessment and then participated in a walkthrough of its results. The assessment wasn’t the point by itself. The point was what it enabled: a structured conversation about what had to come next. 

Anne, the Global Compensation Specialist who took the assessment on behalf of their organization, said:  

After the cuts, we didn’t just lose headcount—we lost certainty. We needed a clear picture of what capacity we still had, what it cost, and whether our structure still matched the programs we needed to win.

That organization’s challenge was not simply “How do we reduce cost?” It was, “How do we rationalize and rebuild?” They needed to understand the following:

  • What remained in the post-downsizing structure (roles, levels, occupations, and gaps)
  • How remaining roles mapped to the work funders would now support (program shifts and new portfolio priorities)
  • Whether their pay structure could do two things at once: remain competitive enough to secure talent in a tightened labor market, and remain credible and affordable to funders

And in this situation, the sequence mattered. Anne put it plainly: 

We kept wanting to jump straight to pay decisions, but the assessment made it obvious: we had to get Jobs right first. If the job architecture isn’t aligned to the work, everything downstream becomes an argument.

That is exactly the kind of prioritization HR Effectiveness is meant to prompt—not a long list of issues, but clarity on where to begin.

EU Pay Transparency Will Test HR 

If funding pressure exposes stress fractures, pay transparency will illuminate them

The EU Pay Transparency Directive is often framed as a reporting exercise—gender pay gaps, pay ranges, and disclosures. But transparency doesn’t create questions; it forces answers to questions employees, donors, regulators, and boards will increasingly ask: 

  • Why is this role paid at this level? 
  • Why do two people in the same band have different salaries? 
  • What governs starting pay and salary adjustments? 
  • How do recruitment, learning and development, and performance actually connect to pay outcomes?

If those answers are informal, inconsistent, or manager-dependent, transparency doesn’t simply reveal gaps—it amplifies them. 

Unlike funding shocks, pay transparency is not a temporary disruption. It is a permanent operating condition. Without a structured solution and disciplined, accountable follow-through, the gaps will widen. 

Not Just Compliance: Funders are Looking at People Systems 

Pay transparency is often treated as “EU compliance.” But the underlying issue—whether an organization can demonstrate fairness, consistency, and control—extends beyond regulators. 

Many funders already examine people systems as part of due diligence and risk assessment. For example, the Global Fund to Fight AIDS, TB, and Malaria uses capacity assessment frameworks that include human resources systems and staffing capacity as part of implementation readiness, and it reinforces integrity expectations through due diligence processes for implementing partners and key actors. 

The point is not that every funder will ask the same questions. The point is that, in a tighter funding market, the ability to show disciplined HR systems increasingly reads as a signal of operational maturity—and therefore of investment-worthiness. 

2025 was Just the Start—And Simply Reacting is Unsustainable 

The late‑2025 crisis survey is useful precisely because it is limited. It captured how organizations reacted under acute pressure. But it’s not enough to just react. 

The real question now is, “What did we do in the crisis?” It is: 

Are our HR systems strong enough to support the next decision—before it becomes a crisis? 

The Pivot: From Tactics to Fundamentally Good HR 

This is where the conversation must shift. 

In periods of strain, HR teams understandably focus on coping: reducing headcount, freezing pay, and holding morale together. Those actions are necessary—but they are tactical. 

The next step is about fundamentally good HR

  • making pay and workforce decisions grounded in strategy and transparency
  • making differentiations explainable because they are anchored in demonstrated capacity and widely observable performance across individual staff
  • making outcomes defensible—to staff, to leadership, and externally, to donors and funders 

This is exactly the gap that the HR Effectiveness Assessment is designed to surface. 

Why HR Effectiveness Matters Now

Across 87 organizations—a mix of targeted participants from the INGO, international organization, and governmental sectors—that took the HR Effectiveness Assessment through the end of February 2026, a consistent picture emerged. 

The overall average score was 57.8 out of 120, placing the cohort in the Emerging (near Established) category. The distribution is revealing: 

A pie chart shows organizational maturity levels: 7% Formative, 46% Emerging, 41% Established, 6% Integrated. Explanatory text boxes detail each category's meaning.

In other words: many organizations have real strengths, but most are still building the coherence needed to be consistently defensible under pressure. 

Waste vs. Abuse: Where Risk Tends to Live 

The HR Effectiveness framework makes an important distinction that becomes highly practical in turbulent contexts: waste tends to arise from inefficiencies in structure; abuse tends to arise from inconsistencies in capacity decisions

  • Workforce Formation (Jobs + Pay) is about structure—job architectures, job evaluation, market positioning, and salary scales. When these are weak or misaligned, organizations experience waste: unclear roles, mismatched staffing, distorted pay relationships, rework, and chronic inefficiency. 
  • Workforce Management (Skills + Performance) is about capacity—how individuals are assessed, developed, and recognized. When these are weak or inconsistent, organizations experience abuse (or at a minimum, perceived unfairness): subjectivity in hiring and pay decisions, opaque progression, biased performance outcomes, and inconsistent treatment across managers and locations.

This is why the assessment is more than a “score.” It shows where risk accumulates—and why. It helps organizations prioritize risk mitigation (where vulnerabilities are high) and strengthen operational effectiveness (where foundations can be leveraged). 

What the Data Shows (Overall Cohort) 

Three findings matter most for the current environment. 

  • Principles are stronger than Policies and Tools 

Across the cohort, organizations were strongest on Principles (the “why”; 51% overall group average), with Policies (46%) and Tools (49%) lagging behind. 

That is the core “intent vs. execution” gap: many organizations agree on fairness and merit in principle, but lack the operational methods and instruments to apply those principles consistently. 

  • Workforce Formation is stronger than Workforce Management

This helps explain why structural decisions about Jobs and Pay are often easier than individual differentiation. 

This difference is not enormous—but it is consistent. Under pressure, organizations tend to have more “architecture” (30.6 out of 60 for the cohort average) than “differentiation logic.” Organization structures and pay scales tended to be strong. How individuals are recognized for their skills and achievements? Not so much.

Scatter plot showing organizations' scores in Workforce Formation versus Workforce Management, color-coded by assessment level (Integrated, Established, Emerging, Formative), with summary insights.
  • Skills is consistently the weakest area 

Across quadrants, Skills was the weakest on average: 

  • Skills average: 12.5 (out of 30) → Emerging 
  • Within Skills specifically:
    • Principles: 54% (stronger intent; Established) 
    • Policies: 35% (weak operational method; Emerging) 
    • Tools: 38% (limited or disconnected instruments; Emerging) 

This is why pay transparency becomes so hard so fast. 

Many organizations can show the range. Few can consistently justify why one person enters at one point, and another enters at another; why someone progresses; why the organization is confident that differentiation reflects capability rather than managerial discretion. 

Circular chart shows an HR Effectiveness Assessment score of 57.8/120 across Jobs, Pay, Skills, and Performance, categorized by Principles, Policies, and Tools. Legend explains four evaluation levels.

Overall, this is not a critique. It is a roadmap. A roadmap can have stops along the way. You can prioritize. You can sequence. You can focus first on Jobs, then Pay, then Skills, then Performance. But the direction must be clear—and the prioritization must be disciplined—because the four areas are connected. If you fix one quadrant in isolation while another remains fragile, pressure will simply reappear somewhere else. 

What Action Looks Like in Practice 

The purpose of HR Effectiveness is not to generate another report. It is to prioritize action

Three practical implications follow. 

  • Know where you stand—before you redesign 

Without a clear picture of maturity, organizations often jump straight to solutions: rewriting policies, redesigning structures, launching tools. Unfortunately, in Birches Group’s experience, the initial problem statement is rarely the real problem. The assessment helps answer a simpler question first: Where are we already strong, and where are we exposed? 

That clarity prevents over‑engineering—and helps avoid false confidence.

  • Focus effort where risk and visibility intersect 

The assessment consistently shows where pressure concentrates: 

  • Jobs and Pay anchor credibility during restructuring. 
  • Skills and Performance anchor credibility under transparency. 

You do not need to fix everything at once. You need to fix what will be tested next

  • Make HR logic visible—and trusted 

Ultimately, effectiveness is about visibility. Not perfection. 

Can you explain your job structure? Your pay logic? Your progression rules? 

But it shouldn’t only be HR that can explain these points. 

At the Integrated level of the HR Effectiveness Assessment, systems are not just present—they are trusted. Trusted by staff and management, and credible to governance and donors. That trust is evident when: 

  • Managers anchor their decisions on consistent frameworks and are held to account
  • Staff can describe the rules with confidence (even if they don’t love every outcome) 
  • Resource development and leadership teams can communicate workforce systems to donors as evidence of accountability, fairness, and prudent use of funds 

When the logic is widely understood—not locked inside HR—it becomes a strategic asset. 

Are You Ready for What Comes Next? 

The sector has lived through the shock phase. But it is foolish to assume the worst is over—or to presume to know where the next disruption will come from. The question now is preparedness: how well-positioned is your organization to weather the next disruption? 

Taking the HR Effectiveness Assessment is a concrete way to move from reaction to intent—from anecdote to evidence. It gives HR leaders a structured view of maturity across Jobs, Pay, Skills, and Performance, and a common language to engage leadership in decisions that are coming regardless. 

As one HR leader who took the assessment put it: 

Taking it with colleagues across HR functions helped us stop debating symptoms. We could finally agree on where the system was breaking—and what to tackle first.

And another noted:

It gave me a way to structure the conversation with non‑HR leaders. Instead of ‘HR problems,’ we were talking about organizational risk and operational credibility.

Others across the sector have already taken this step—not because conditions were ideal, but because clarity was needed. 

How Does HR Thrive Under Pressure? 

Thriving under pressure does not mean having perfect systems. It means having clear logic, disciplined priorities, and tools that hold when decisions get hard

If pressure is the test, HR Effectiveness is the diagnostic that helps you prepare. 

The terror of knowing rarely comes from sudden crisis. It comes from recognition—from seeing the system as it truly is, understanding what it can and cannot support, and realizing that inaction now carries its own cost. 

Are you ready to take the assessment—or to talk with us about what your results mean and what to do next? 

Take the HR Effectiveness Assessment: Understand your maturity, identify your priorities, and move forward with confidence


Smiling man in glasses wearing a suit and blue tie against a light background.

As the Senior Consultant for business strategy and product design, PJ focuses on the ongoing evolution of our products and services and provides consulting expertise in organization design, job evaluation, scale design, training, skills assessment, and performance management. PJ began his Birches Group career as a survey analyst in 2006.


by Marie Antonio, Editor-in-Chief

The Challenge

A globally distributed, mission-driven organization operating across multiple locations faced persistent challenges. While formal job grades, salary scales, and performance systems were in place, staff feedback highlighted growing concerns around:

  • Perceived pay inequity
  • Limited transparency around career progression pathways
  • Lack of clarity in recognition and reward mechanisms

To explore a solution, the organization partnered with Birches Group to pilot a structured, skills-based approach that could bring clarity, equity, and consistency to the workforce. This pilot was conducted with the organization’s core business unit.

The Birches Group Approach: Skills As the Common Language

Birches Group’s Community™ Skills Framework served as the foundation for the pilot. The approach focuses on clarifying how skills are defined, assessed, and linked to jobs, pay, and capacity. By anchoring skills to the job itself, the framework creates a shared reference point that applies equally across offices, countries, and teams.

The framework is built on three core factors:

  • Purpose – the complexity of thinking and problem-solving required in the job
  • Engagement – communication and collaboration with internal and external stakeholders
  • Delivery – how work is planned, executed, and translated into timely, high-quality outputs

The Community™ factors are further defined through six indicators. The factors and indicators are job grade-based and can be applied to any kind of job in any occupation in a generic manner.

Purple graphic with a target and dart icon labeled "Purpose" on the left; "Conceptual" and "Applied" text on the right, separated by a horizontal line.

Purpose

Conceptual Knowledge—What is the conceptual focus and complexity in the design of solutions? For rules-based transactions, what is the complexity of the data or information handled?

Applied Knowledge—What is the breadth of managerial or project/program oversight? What is the extent of supervisory or process management as part of a larger functional service?

Red and white graphic with the word "Engagement," an icon of a person with arrows, and two sections labeled "Internal" and "External.

Engagement

Internal—What is the collaborative role within the functional team? What is the depth and breadth of information provided to the team?

External—What is the advisory role with other functional teams or external clients? What is the depth and breadth of information provided to other functional teams or external clients?

Diagram showing "Delivery" represented by an arrow, divided into two sections labeled "Timeliness" and "Quality.

Delivery

Timeliness—Efficiency: How are resources deployed against project/program needs and cycles? How are process schedules maintained to strengthen service responsiveness?

Quality—Effectiveness: What is the measurable impact of interventions or the functional unit? How are quality metrics maintained throughout service execution?

A five-level skills proficiency chart from Basic to Expert, each with descriptions, displayed above a salary range from Minimum to Maximum.

The Community™ Skills Framework clarifies what an organization is paying for: skills, knowledge, and expertise. It defines five stages of skills growth—Basic, Proficient, Skilled, Advanced, and Expert—each aligned with a specific point in the salary range and representing the accumulation and progression of knowledge within the context of the job grade.

“Skilled” represents the level of skill necessary to carry out work at the optimal level for the grade and is aligned with the midpoint of the salary range.

Basic and Expert mark the entry and mastery ends of the grade, corresponding to the salary minimum and maximum, respectively. The intermediate stages, Proficient and Advanced, capture the progression between these endpoints, making growth measurable and manageable.

This framework enables organizations to manage key points in the employee journey more effectively and equitably:

  • Recruitment and Initial Pay Setting—Determines fit for the role and appropriate hiring rate based on assessed skill level
  • Recognition of Skills Growth—Supports in-grade pay adjustments and informs promotion decisions based on demonstrated skill growth and progression
  • Targeted Learning and Development—Aligns development activities with the specific stage, indicator, and level of the skills framework

Methodology

The pilot was built on a simple but important premise: employee pay should clearly reflect the skills they bring to their role. When organizations lack a structured way to connect compensation with demonstrated capability, inconsistencies can emerge, making it harder to uphold fairness across the workforce. At its heart, the pilot asks a central question: what is the organization paying for?

In any pay structure, the span from minimum to maximum is intended to represent the growth of experience, skill, and expertise within a job grade, as well as the value the organization assigns to that progression. When an employee’s actual capability and experience do not align with their placement in the salary range, it signals potential inequities that need to be examined. This reflects the principle of equal pay for work of equal value, ensuring that compensation is aligned with the level of knowledge and expertise required for the role.

The Community™ Skills Framework provides a clear method for evaluating pay equity and for analyzing and standardizing the connection between skill and compensation. It allows organizations to compare the level of skill implied by current pay (imputed skills) with the level of skill demonstrated in practice (assessed skills) and to apply that analysis consistently from hiring through the full employee lifecycle.

Comparing Imputed vs. Assessed Skill Ratings

In this pilot, two types of skill ratings were compared

  • Imputed skill level—the level of skill implied by an employee’s current position within the salary range (i.e., what the organization is paying for)
  • Assessed skill level—the level of skill demonstrated in practice, based on the manager’s assessment using the framework

This comparison serves as a valuable diagnostic tool. When assessed skills are notably higher than imputed ratings (assessed > imputed), it points to under-recognition and the possibility that employees are being undervalued. On the other hand, when imputed ratings are higher than assessed skills (assessed < imputed), it may suggest over-recognition or compensation that is not fully aligned with demonstrated skill level. Identifying and addressing these gaps is critical to promoting fairness and strengthening workforce effectiveness.

Conducted over eight weeks, the pilot followed a structured three-phase approach:

  • Define (Weeks 1–4): Establishing the Baseline
    • Imputed skill ratings were developed for the pilot unit using current salary data and position-in-range analysis.
    • This created a baseline view of how existing pay levels corresponded to expected skill levels.
  • Develop (Weeks 4–6): Skills Assessment
    • Managers received training on the Community™ Skills Framework and used the web-based platform to evaluate staff across six indicators and five stages of skill development.
    • Although imputed ratings were available as a reference point, the assessments were completed independently to reflect actual, observable contributions.
  • Deliver (Weeks 7–8): Analyzing the Gaps
    • Managers received training on the Community™ Skills Framework and used the web-based platform to evaluate staff across six indicators and five stages of skill development.
    • Although imputed ratings were available as a reference point, the assessments were completed independently to reflect actual, observable contributions.

What the Results Made Visible

Although based on a limited sample, the assessment provides useful insight into current patterns in recognition, pay alignment, and workforce distribution. These findings are directional rather than conclusive, and broader analysis is needed to determine whether they reflect wider workforce trends.

  • The workforce structure is weighted toward lower-level roles
    • The workforce in this unit is concentrated in lower-grade, process-driven, and entry-level roles, with a smaller share of staff in roles that typically provide deeper technical leadership, strategic oversight, and innovation capacity. This creates two risks: limited ability to scale complex work and reduced capacity to design or test new areas of work.
  • Majority of staff in the pilot unit are under-recognized
    • Across the unit, assessed skill levels were often higher than the skill level implied by current pay positioning. This suggests that capability is not being fully recognized through compensation in many cases. The pattern emerged across job grades but was most pronounced in its core capacity focused on substantive program design.
  • Misalignment often begins when people enter or move into a role
    • A key pattern that emerged was that pay–skills gaps often start at the point of entry into a role. Staff who were newly hired, promoted, or reassigned were especially likely to be positioned below the level suggested by their demonstrated skills. This indicates that early pay-setting decisions may create gaps that continue over time.
  • These gaps are not minor
    • Where skill and pay were out of alignment, the difference was often substantial rather than marginal. In some cases, the gap spanned multiple skill milestones (in some cases, it meant getting paid close to the first quartile of the pay range but demonstrating skills closer to the Expert skills stage or the maximum of the pay range), showing that the issue is not just about small adjustments but about more significant differences between contribution and recognition.
  • A meaningful share of the workforce is still below the desired capability level
    • The review found that, although many staff are operating within or above the optimal capability range (Proficient +50% to Skilled), a meaningful share remains below it. This suggests that the organization has a solid base to build on, but still needs more deliberate capability development to reach its longer-term target profile.

Why This Matters

  • The current system may be undervaluing capability
    • When people consistently demonstrate more skill than their pay position reflects, it can weaken trust in the fairness of the system. Over time, this may affect motivation, recognition, and retention, especially for staff who are already contributing beyond the expected level of their role.
  • Early pay decisions can create long-term inequality
    • If staff are placed too low when they first enter or move into a role, the effects can carry forward for years. That means initial pay-setting is not just an administrative step; it is a major factor shaping long-term equity, progression, and perceived fairness.
  • Performance and skills are distinct
    • Current pay progression systems place more weight on performance ratings than on demonstrated growth in skills and expertise. This can slow career movement for staff who have clearly developed, while also making it harder to build a transparent and credible pathway for advancement.
  • Learning investment is not yet fully strategic
    • Although capability development is needed, learning and development do not appear to be systematically tied to identified skill gaps or progression pathways. Without that link, development efforts may have less impact than intended and may not move the workforce toward its target capability profile.
  • The job structure may not fully support future demands
    • A workforce that is concentrated in lower-level roles may struggle to support more complex, cross-functional, or strategic work. This has implications not only for current delivery but also for innovation, succession planning, and long-term organizational capacity.

Overall, the findings point to a structural issue rather than a series of isolated cases. The main challenge is not simply whether staff are at the optimal skill level, but whether the organization has a clear and consistent way to recognize demonstrated capability through job design, pay positioning, progression, and development. A more structured skills-based approach would help strengthen fairness, improve transparency, and better align workforce capability with future needs.

What does this mean for your organization?

In a context of tighter budgets, greater accountability for how resources are used, and increasing expectations around pay transparency and equity, organizations need more rigorous ways to make workforce decisions. A structured, skills-based approach offers a practical way to strengthen fairness, improve clarity, and direct limited resources where they create the most value. This can generate several important organizational benefits:

  • More credible and equitable pay decisions
    • Pay positioning and progression can be tied more clearly to demonstrated skills rather than salary history, tenure, visibility, or other inconsistent factors. This helps organizations strengthen
      equity, explain pay decisions more confidently, and reduce disparities that can undermine trust.
  • Clearer role definition and better workforce alignment
    • A skills-based lens can reveal when roles have evolved beyond their original design, allowing organizations to address misalignment through job clarification, redesign, or reclassification rather than ad hoc fixes. This is especially valuable when resources are constrained, and role clarity becomes essential for efficient delivery.
  • More transparent progression pathways
    • Employees can better understand what advancement requires when expectations are expressed in terms of observable skills rather than informal signals or manager interpretation. This improves transparency, supports fairer progression decisions, and makes career pathways easier to communicate across the organization.
  • Stronger trust and organizational cohesion
    • A shared framework for describing skills reduces ambiguity and helps leaders explain decisions more consistently. In periods of uncertainty, such as when organizations may be under pressure to manage costs or restructure, this consistency is critical to maintaining trust in the fairness of the system.
  • A clearer distinction between capability and short-term performance
    • Organizations can use skills growth as the basis for progression, promotion readiness, and longer-term workforce planning, while reserving performance systems for year-on-year achievement and results. This moves away from performance-driven pay increases and promotions that may lead to hyperinflation of performance ratings and forced bell curves, and creates a more credible foundation for talent decisions.
  • Better targeting of learning and development investment
    • When skill gaps are visible by role and indicator, learning resources can be directed toward the capabilities the organization most needs, rather than spread thinly across generic training. In a tighter funding environment, this helps ensure development spending is more strategic, focused, and defensible.

Contact us if you are interested in learning more about driving pay equity in a global workforce or would like to discuss a possible pilot with a key unit in your organization.

A woman and a man sit at a table in an office, discussing notes. Other people work in the background. A laptop, coffee cup, and paperwork are on the table.

A person wearing a white blazer and a black top, smiling in front of a plain background.

As the Community Magazine’s Editor-in-Chief and Practice Lead for Workforce Management, Marie provides insight linking the needs of the clients in managing the workforce and the utility of the Community approach. Anchored on a job-based foundation promoting equity in job design and evaluation and ensuring a rigorous determination of equivalent worth across a multi-disciplinary workforce, the promotion of the Community approach highlights its simplicity, accessibility, and ultimately practical effectiveness. Marie, through client engagement both individually and in professional fora, articulates the strength and uniqueness of Community and builds a robust practice with current and new clients.


by Carel Ariola, Editorial Contributor

The Challenge

Global employee engagement continues to decline. In the recent Gallup State of the Global Workplace Report, only 20% of employees worldwide were engaged, and Gallup estimates the cost of low engagement at $10 trillion—about 9% of global GDP. Loneliness and stress are elevated, and fully remote workers report higher loneliness than onsite peers—putting sustained pressure on culture, well-being, and performance.

A Counterintuitive Case

In a recent staff survey distributed to all employees at Birches Group LLC, employees were asked what they valued most about working for the company, and the most cited value was workplace culture. This might sound predictable, but Birches Group is a remote-first organization. Across global operations spanning North America, Oceania, Asia, and Europe, there are no large office spaces, and staff meet only for deliberate scheduled activities once a quarter—possibly less.

Culture is a set of shared beliefs and values that shape patterns of behavior. In remote and hybrid work settings, the core question for HR and business leaders is, “Can we deliberately design the conditions that enable people to do their best work across locations and time zones?”

Creating an enabling environment is a core responsibility of the organization, regardless of how work is delivered. Through policies and practices that promote clarity, responsiveness, and growth, staff are enabled to contribute meaningfully to the mission of the organization.

An Enabling Environment Encompasses the Following:

  • Clarity: Work conditions that focus on explicit outcomes, standards, and decisions
  • Connection: A commitment to growth through collaboration with employees
  • Capability: A commitment to deliver internal services

The Birches Group Model

Birches Group’s work focuses on purpose over process, and this philosophy shapes how work is delivered. It translates to a set of enabling practices and work features that broadly facilitate and support performance.

Clarity, Trust, and Autonomy

At Birches Group, there are no fixed shifts, no attendance checks, and no paperwork to file for what was done for the day. Staff set their schedules based on clear, agreed-upon outputs. Leaders invest time to clarify deliverables and standards. Whether staff join as experienced employees or fresh out of college, they are given autonomy to deliver work without handholding or unnecessary control.

Birches Group has consistently delivered on its commitments, with business units completing the vast majority of their planned deliverables. Year after year, performance results highlight staff’s individual achievements and business units’ completed goals.

Bar chart showing average performance scores from 2021 to 2025, ranging from 3.18 to 3.23, with a 5-year average score of 3.20.

This model shifts energy from compliance to ownership and is especially effective for remote work.

A person sits at a kitchen table working on a laptop with papers, notebooks, a mug, and a smartphone scattered around. The scene is lit by natural daylight.

Deliberate Engagement

  • Corporate engagement is sustained through deliberate in-person activities, such as training and targeted alignment sessions, designed to tackle complex problems that benefit from live interaction.
  • For two hours each day, the team maintains core hours when staff should be available online to respond to questions or ask for support. These core hours facilitate communication and reduce the lag inherent in asynchronous work schedules.
  • While HR continues to facilitate group activities to bring staff together, employees are also empowered to form interest groups or social clubs. These groups—such as food, fitness, parenting, and gaming—allow staff to engage around shared interests outside of work. This builds a stronger sense of belonging and engagement.

In the last Climate Survey sent out to all staff in 2025, Birches Group’s overall employee engagement score was 3.24 out of 4.0, showing active engagement and satisfaction across multiple employment areas.

A circular progress chart showing a score of 3.24 out of 4.00, with most of the circle filled in dark green.

Service-Oriented and Digitally Enabled Services

  • Frictionless internal services are a key component of an efficient employee experience and free up capacity for higher-value work.
  • Birches Group focuses its tools and platforms on simple solutions that facilitate work. This includes a knowledge base where employees can access shared information and HR services that are enabled online. HR staff continues to be available for consultation and support on nuanced cases. Birches Group continues to build its tools in response to evolving needs and technologies.

These deliberate practices have resulted in shared norms at Birches Group, such as respect for deadlines, a commitment to surfacing issues early, a bias for clarity and responsiveness, and respect for one another’s time.

The Bottom Line

When employers invest in deliberate practices that enable work—clarity of outcomes, autonomy with guardrails, psychological safety, and a strong digital backbone—employees feel empowered to do their best work.

Birches Group’s experience shows that culture is a system of choices that enables people to do great work—together—wherever they are.


A person with long dark hair, wearing a maroon top, smiles at the camera against a plain background.

Carel manages our internal human resources function and is heavily involved in recruitment, skills assessment, and performance management for the team, assisting managers with all aspects of HR. She also oversees our accounting, invoicing, and facilities management in Manila. 


by Lin Valenzuela, Editorial Contributor

What if one of the most important sources of information about an organization’s effectiveness is one that leaders measure the least?

Most organizations track financial performance, operational milestones, and program metrics, but few systematically measure the experience of the workforce tasked to deliver these results. Consequently, many leaders may not fully understand how internal practices such as communication, recognition, and role clarity impact employees’ ability to perform their jobs effectively.

Forward-looking organizations such as the Millennium Challenge Account (MCA) in Mongolia have decided to address this challenge and offer a compelling example of how a structured approach for measuring the experience of the workforce and using the insights from the analysis can strengthen organizational effectiveness.

MCA in Mongolia is responsible for implementing the Mongolia Water Compact under the Millennium Challenge Corporation (MCC). This compact represents a major investment in Mongolia’s water sector and was designed to expand the long-term water supply to the capital city of Ulaanbaatar. It includes the development of groundwater wellfields, advanced water treatment infrastructure, wastewater recycling systems, and institutional reforms to strengthen water resource management.

The complexity of this initiative, plus the fixed implementation period (five years), requires the coordinated effort of specialists across many disciplines. Recognizing this reality, the leadership of MCA-Mongolia viewed the organization’s work environment as an important part of performance. It sought to understand how employees experience the workplace and identify conditions that support collaboration and those that hinder progress.

A Data-Driven Approach

The decision to conduct workforce surveys is consistent with MCC’s broader philosophy of data-driven decision-making. Across its global portfolio, MCC relies on empirical evidence to select beneficiary countries, assess program viability, and monitor impact. Applying the same rigor and discipline to organizational management is a natural extension of this philosophy. From 2020 to 2024, MCA-Mongolia partnered with Birches Group to conduct an annual Workforce Climate Survey designed to systematically measure employees’ perceptions of the MCA work environment. A longitudinal approach was adopted (i.e., repeating the survey each year) to measure trends and changes over time. Each survey yielded a diagnostic snapshot of the current climate and enabled management to assess whether interventions implemented in the previous years were producing measurable improvements. Over time, the results created a clear picture of the MCA’s improving internal dynamics as reflected by the increasing percentage of positive responses over the years.

While the numbers were encouraging, the real value came from the insights that the survey exercises generated. Birches Group designed the survey to focus on four dimensions that contribute to the employee experience:

  1. Job Clarity
  2. Rewards and Recognition
  3. Operational Effectiveness
  4. Leadership and Team Cohesion

A total of 18 statements were used to measure these dimensions. A fifth variable, Overall Employment Experience, was measured with five statements designed to capture and quantify employees’ levels of motivation, morale, and pride in the MCA. Employees were asked to evaluate each statement using a four-point scale ranging from “Strongly Disagree” to “Strongly Agree,” and responses were coded as “favorable” or “unfavorable.” This allowed for the calculation of statement scores, representing the percentage of respondents who expressed a favorable view on each issue. These statement scores were aggregated into factor scores, providing an overview of how employees perceived each major dimension of the organizational climate.

Moving Beyond Low and High Scores

One of the most powerful features of the approach was the use of driver analysis to identify which workplace issues had the strongest impact on overall employee experience. Instead of focusing solely on the lowest-scoring items, this analysis examines the relationship between each statement and Overall Employment Experience. This technique works by looking at the respondents who reported high Overall Employment Experience and identifying which statements or items they are more positive on than other respondents. Conversely, it looks up the respondents who reported low Overall Employment Experience and identifies which statements or items they are more negative on than other respondents. Combining the information generates the top drivers—the items that will likely have the most impact on Overall Employment Experience.

A quadrant chart plotting statement scores against employment experience correlation, categorizing items as key strengths, key weaknesses, non-critical strengths, or non-critical weaknesses.
QuadrantWhat It Means
Key Weaknesses (top-left, orange)High impact on experience but rated poorly.
Fix these first.
Key Strengths (top-right, teal)High impact and rated well.
Protect and communicate with these.
Non-critical Weaknesses (bottom-left, yellow)Rated poorly but low impact.
Lower priority.
Non-critical Strengths (bottom-right, yellow)Rated well but low impact.
Nice to have.

Context Matters

Quantitative analysis is powerful, but numbers alone cannot fully capture the complexity of the employment experience. To complement the quantitative data, open-ended questions allowed employees to provide additional context about their ratings. The comments were then categorized into thematic areas and sentiments (i.e., positive or negative), providing another layer of insights to help explain the observations from the quantitative data. For example, while most respondents indicated overall satisfaction with compensation, some comments expressed the need for skills-based pay differentiation.

Building Trust Through Confidentiality and Inclusion

At the core, any successful workforce survey or any employee listening initiative is based on employees’ trust in the process. All surveys were designed and conducted with strong safeguards to protect confidentiality—including the use of an external platform and personal emails to collect responses, data aggregation, and presentation rules that protect the identities of respondents. Moreover, the questions were translated into Mongolian to ensure that employees across the organization could participate. These measures contributed to a 100% participation rate, which not only strengthened the reliability of the data but also signals the employees’ confidence in the integrity and value of the exercise.

A team of people paddles vigorously in sync on a long dragon boat during a race, with other teams and spectators visible in the background under a cloudy sky.

Listening as a Strategy

Some of the most valuable data an organization can collect comes not from financial systems or project dashboards, but from the people doing the work. This experience of MCA in Mongolia highlights the strategic value of understanding one’s workforce. By combining rigorous survey design, careful data analysis, and commitment to acting on findings, organizations can build work environments that drive organizational performance.


A person with long, dark hair and glasses smiles while wearing a dark blazer and a white shirt against a plain background.

Lin oversees the provision of development and technical services in the Community Skills and Performance quadrants, focusing on the needs of clients to recognize and enhance their workforce’s capacity and achievements, which contribute to the success of their organizations. She also provides advice on evolving approaches that address emerging trends in diversity and inclusion that cut across all areas of Human Resources and organizational management.


by Gary McGillicuddy, Birches Group Managing Partner

In the 1980s, a movie was produced, Quest for Fire. The movie tried to depict the conditions in which early humans lived some 80,000 years ago. Needless to say, it was not a pleasant existence that was presented. Humans lived in pre-language tribal communities. On all sides, they were beset by challenges and outright dangers from the environment, wild animals, and, of course, fellow man.

The formation of tribal communities was simply borne of necessity. Survival hinged on collective activities to gather the necessary provisions and to stave off the dangers that surrounded them. The level of knowledge to engage more effectively with their surroundings, as depicted in the movie, was quite limited. Core to the plot was the need to get fire. For early humans, fire was a gift from the Gods, generated by violent storms. There was no understanding of how fire was made; all that mattered was the
uses to which fire could be put, and how devastating it could be to lose this vital heavenly resource.

In the movie, due to an oversight in vigilance, the tribe’s fire was accidentally extinguished in a rainstorm. It was decided that the two stronger men would go on a quest, a Quest for Fire. Hoping to possibly steal fire from another tribe, the men proceeded to cross territory utterly unfamiliar with unknown dangers. Wild animals stalked them, the elements harassed them, and they were under constant threat from the very people from whom they were hoping to steal.

Survival against these conditions entirely depended on teamwork, the pooling of observations leading to the progressive building of knowledge. In their quest, yes, the challenges of survival were largely dependent upon strength and luck. However, along the way, the movie shows us what separates man from the rest of the beasts in the field. We are not solely reliant on instinct; we can observe, adapt, and learn. In the quest for fire, the initial goal was to steal it from another tribe since, of course, you cannot recreate a gift from the gods. But can you? Stealth and observation give the opportunity.

Two people dressed as prehistoric humans sit by a small campfire under a rocky overhang at dusk, surrounded by trees and wilderness.

Humanity is driven, or as some have thought, condemned to an endless quest for knowledge and all that brings. We are not content with seeking a harmonious life in the natural world.

Finding the Spark

In the quest of this team, it came down not to stealing but learning. With a little friction and dried wood, you could create a spark; the rest follows from that moment. This success in the quest, of course, was not just the knowledge to create and harness fire; it was the power this knowledge brought. Humanity is driven, or as some have thought, condemned to an endless quest for knowledge and all that it brings. We are not content with seeking a harmonious life in the natural world. Since our expulsion from the Garden of Eden because we ate from the tree of knowledge, we have no choice but to pursue knowledge. Fundamental to sustaining our frail existence, we need to use our brain power to control the world around us through understanding this world and how we fit in. Beyond addressing individual challenges to our existence, this has led to a deeper introspection as to our purpose and what that means for the communities in which we live. From St. Augustine, who asserted our purpose must be to build the City of God (De cogitate Dei contra paganos), following the sack of Rome in the fifth century, initially, the adoption of Christianity had weakened the empire by turning away from Rome’s traditional gods. St. Augustine argued that the sacking of Rome was the result of a focus on material wealth. He set forth that the focus of society must be to build the City of God as opposed to the City of Man.

Thomas More, in his work Utopia, articulates a view of society that rests on a collective view and supports a world built on the rule of law, as what today would be an early socialist model, where private property does not exist. Utopia reflects 16th-century humanist thought, also linked to ancient views of society by Plato. Here, humans set the rules and can shape society to their goals. In Utopia, the pursuit of leisure and pleasure is a central tenet of society.

Putting the Models in Place

Whether with a spiritual or humanistic focus, it is about how to shape and advance community. From our two travelers seeking fire, this was for the well-being of their camp. This long story of how and why we try to grow our knowledge, regardless of its objectives, is pursued from a collectivist perspective. The structures advanced by St. Augustine and Thomas More were used to guide several examples of new communities. Most notably, such movements were pursued seriously in the 19th century in America.

Roman soldiers and civilians clash in a chaotic city street filled with fire and smoke, as a golden chariot is wheeled through the destruction amid burning buildings.

Two good examples are the Shaker movement and the Oneida experiment. While both had a strong religious foundation, the communities that they established were quite different. The Shakers espoused a simple lifestyle that focused on practical utility and communal responsibility. Men and women lived separately and strictly practiced celibacy. The model was very successful, and dozens of Shaker communities sprang up across the United States. The basis of the Shaker economy came under threat through advances in technology and manufacturing, following the Civil War, when their highly refined handmade approaches could no longer compete. Communities began to dissolve, and with a decision to no longer admit members, the rule on celibacy made the disappearance of the Shaker movement a certainty.

Conversely, the Oneida experiment, which began in 1848, promoted a different communal model. In their effort to create “heaven on earth,” they promoted open and shared relationships. They practiced “complex marriage,” where all members were married to each other. The Oneida community continued for thirty-two years, and while many sought to join the community, social pressures on the morality of the community ultimately led to its breakup.

Unlike the Shakers, the Oneida Community was successful in a number of industries. Most notably, as silversmiths, the Oneida business exists to this day. They were successful in transitioning both socially and business-wise to continue their economic success. Interestingly, in both the Shaker movement and the Oneida experiment, women worked in much more equal positions with men, reflecting the shared philosophy of communities of shared responsibility.

Illustration of the Oneida Community in the 1800s, showing people gardening, woodworking, tending children, and communal living in a rural setting with large red brick buildings.

Finding the Secret of Success

Both the Shakers and the Oneida community initially built successful economic models based on the idea of communal ownership. Both St. Augustine and Thomas More envisaged societies organized around communal ownership. Oneida went on to greater success by recognizing that enduring success needed adaptation and accepting the self-interest of its members to accumulate wealth. What the Shakers and early Oneida members did not embrace, and what our initial two questers for fire learned, is that knowledge not only brings possibly wealth, but also power.

Yuval Harari, in his recent book, Nexus, examines the evolution of information networks from the Stone Age to the present. He effectively argues that the growth of information does not support a linear evolution of knowledge, which builds and deepens understanding and the building of shared consensus. Belief systems are paired with information and support the desire to act. While the Shakers and the Oneida community were quite successful in their work, it was a strong belief system that enabled these achievements for a small community. But at the same time, these beliefs ultimately led to their failure. Harari demonstrates that mythologies that lead to the creation of bureaucracies are essential, but also possess the seeds of their own demise. Information not only informs, it challenges, and as often as not generates resistance as much as inspiration.

So how can we advance in our quest for fire? The continued massing of information is the starting point, but must be accompanied by the context of our belief systems, which both spur action while also accepting “truth” in balanced and progressive doses. Too many leads to backlash, too few leads to stagnation and progressive irrelevance.

Getting to Our World and the Role of HR

Working on development and all the topics this broad category encompasses does, in fact, rest on our mythology, leading our methodologies, which we call multilateralism. From the hard lessons of World War II, a consensus emerged that cooperation is perhaps a better way to pursue inter-state relations and may be worth trying. A great and extensive network of organizations and programs was built on the tenets of the religion of multilateralism.

This has led to a widespread adherence to these tenets, the belief that progress in the evolution of humanity can only be realized through committed, and yes, unquestioning acceptance. And yes, questioning its utility is confronted not with logical counterarguments, but declarations of heresy or worse. These challenges today have been a long time coming and do present a threat to the church of multilateralism as much as Luther did to the Catholic Church through the posting of his ninety-five theses on the door of the church in Wittenberg.

The Reformation, which sprang from Luther’s actions, yes, threatened the Church but, in the end, strengthened it. The resistance to science and knowledge gradually lessened. Recommitment to mission and basic principles as follows. This is what the church of multilateralism desperately needs today, over the clutching of our rosary, praying that all this will pass soon. Let us embrace what makes multilateralism work and the best way to address global challenges, and accept that it is a messy process that needs to be held to account much more.

Whether with a spiritual or humanistic focus, it is about how to shape and advance community.

We are Globalists

Multilateralism is by definition a global perspective. This is not only because it is nice to be global, but there are also distinct advantages that come from integrating diverse perspectives and capacities. There have been many successes that have come from taking this approach that have led to significant progress in poverty reduction, health, education, protection, and human rights. The list is long and should never be diminished in its value.

At the same time, the fundamental weakness of multilateralism, the need for consensus to support collective action, needs to be re-examined. Yes, the mythology of multilateralism led to the formation of great and now lumbering bureaucracies. Putting the international agenda in the hands of these bureaucracies has led to the inevitable lumbering responses. It has bred an industry driven by process and court protocols, and is not getting on with it.

United Nations Security Council members sit at a large round table, several raising their hands to vote during a formal meeting.

There are possibly better models. The size of classic institutions has, at the same time, led to their failure. It is now time to look much more closely at some of the models that have performed well. Looking at the example of the Global Fund to fight AIDS, Tuberculosis, and Malaria is worth considering. The Global Fund is essentially a funding agency to pursue global priorities on these diseases. It does not maintain a network of field offices and the big bureaucracies accompanying program delivery. It seeks funding partners at the country level, best positioned to be successful at the community level. There are other examples of funding entities, such as the Gates Foundation and the Millennium Challenge Corporation, seeking effective implementation partners that can tailor the global agenda to meaningful local impact. The evolution of the United Nations Common System started with policy and technical secretariats. Over time, the system transformed into a large bureaucracy, with staff deployed to more than 600 locations across the planet. The demands to maintain working infrastructures that support such a massive reach are daunting. And of equal impact, it creates mindsets that the program goals morph into bureaucracies focused on ever greater growth. Examining performance and effectiveness becomes secondary to validating the status quo and sustaining career ladders.

From the HR perspective, what is the challenge that keeps large organizations from moving to a more flexible approach? This poses a significant threat to these approaches, which have remained largely unchanged from the 1970s. HR should bring insight into workforce formation and management essential to achieving the institutional mission, as opposed to the survival of the existing bureaucracies. In a world where multilateral programs are pursued much more with an increasingly widening network of specialized organizations seems to be the promise of improving impact and bringing value. We can see examples of these nimbler partners that combine new structural approaches with highly focused programs. In this edition of the Community Magazine, we are featuring a wonderful, small, yet very impactful organization, Amplify Girls. What makes Amplify Girls so representative of a new way to pursue a quest for fire is that they have embraced what our inevitable future is, working primarily as a virtual organization.

Where time and presence are no longer defining features of employment, it forces an organization to value skills, promote learning, and break down classic grade structures to milestones of capacity, where staff can advance as skills growth warrants.

Our Inevitable Future

Organizations, both public and private, have been moving gingerly into more forms of virtual work. The impact of the Covid pandemic was seen as a possible catalyst. However, now that the pandemic has passed, there has been a significant retrenchment in virtual work options. Most organizations take some pride in offering a thin gruel of virtual work, enabling a day or two a week to work from home. This is hardly a new working model, and effectively does not change the fundamental nature of organizational structure. It remains a model of control over facilitation and is a minimal nod to the increasing demand for workplace flexibility.

In 1995, Dave Ulrich, together with Ron Ashkenas, Todd Jick, and Steve Kerr, published The Boundaryless Organization. The book presented a challenging assessment of classic organizational structure, examining structural features from hierarchy to function and geography. While these classic divisions are deeply embedded in organizations and their culture in the modern world, this approach and its accompanying mindset will impede evolution in ways that capture new working realities.

In this updated edition, the boundaries of time and place have been added to the list of features that organizations must strive to overcome. Allowing staff to work from home two days a week is not a virtual approach. These policies perpetuate the classic limits of geography and hierarchy. Presence and input are still the defining features of how work is organized. It really is time to let go and become truly virtual, meaning anywhere, anytime.

A collage shows five people in different countries on a video call, each in a home office with clocks displaying local times and city landmarks visible through windows.

Yes, there are factors to overcome, but most of these are traditions. When the benefits of a truly virtual organization are embraced, the advantages become overwhelming. The simple capacity to reach talent anywhere and avoid the costs and family disruption of expatriation alone merits this approach. While asynchronous work requires a sense of responsibility and understanding how your work supports the larger endeavor, an asynchronous organization essentially can be working in a much broader time footprint, expanding productivity and client support. Yes, in a virtual organization, the workday may need to stretch to engage across time zones. Early morning and evening engagement with colleagues will become the norm. The virtual environment, at the same time, promotes a greater level of accountability and responsibility for each team member. Where time and presence are no longer defining features of employment, it forces an organization to value skills, promote learning, and break down classic grade structures to milestones of capacity, where staff can advance as skills growth warrants.

To build such a world, the challenges and the need for creative thought on the part of HR have never been greater. More than a quarter of the way into the 21st century, it is high time we shed the lingering organizational models of the past. Like our two team members who crossed new territory in a quest for fire, our quest needs to bring together a global effort. Cost-effective, enabling diversity, facilitating a focus on outputs, enabling work-life balance, facilitating gender balance, enabling a focus on results and pay for performance, and capturing the generational perspective of the future of work, do we need to say more?1

HR should bring insight on workforce formation and management essential to achieving institutional mission, as opposed to the survival of the existing bureaucracies.

1 The Shakers wrote a famous hymn, It’s a Gift to be Simple. This melody formed the basis for Aaron Copland’s Appalachian Spring.

Man with a gray beard wearing a light blue blazer, striped shirt, and a dark blue bow tie, facing the camera.

Gary is a founder and managing partner of Birches Group, based in New York. He provides executive leadership to the firm. Gary specializes in Organization Design, including Job Design, Skills Assessment, and Performance Management, and has led large-scale projects for many of our clients in these areas. Gary is the primary designer of our Community™ methodology, and an expert on the history and evolution of work. Before forming Birches Group, Gary had a long career with the United Nations Development Program (UNDP), where he was responsible for compensation and HR policy.


Distributed teams are now the operational norm for many organizations, with 75% of Fortune 500 companies offering permanent remote work options. But the infrastructure to support these teams has not kept pace. Communication is still fragmented across platforms, projects live in one tool while conversations happen in another, and updates get buried in email threads. Research on distributed team design points to a consistent finding: teams that have shared communication standards, clear workflows, and a centralized digital workspace outperform those that do not, regardless of talent or technology.

The challenge is not access to tools but the organizational discipline to use them consistently, build norms that travel across time zones, and treat distributed infrastructure as a leadership responsibility rather than an IT one.

A person sits at a desk participating in a video conference on a laptop with four other people. Glasses and a smartphone are on the desk.

Why This Matters

For organizations operating across multiple countries and time zones, this is not a technology gap; it is a governance gap. Global hiring introduces compliance, payroll, and tax complexity that require clear classification standards, consistent policy application, and, in some cases, regional legal expertise.

Beyond compliance, the organizations that are succeeding with distributed work are the ones that treat it as a deliberate operating model, not a default or an accommodation. That means investing in the structures, standards, and management practices that make distributed work sustainable and equitable for everyone on the team, regardless of location.

What You Can Do

  • Establish clear communication standards for your distributed teams: what tools are used for what, when synchronous communication is expected, and how decisions are documented and shared.
  • Audit your workforce policies for consistency across locations, including pay, benefits, performance standards, and access to development opportunities. Distributed workers should not face different standards based on where they are.
  • Treat onboarding as the foundation of distributed team success. New hires joining remotely need a structured introduction to expectations, team norms, and communication practices that in-office employees often absorb informally.
  • Ensure managers have the skills, tools, and explicit authority to lead distributed teams well. Leading across locations is a distinct capability and one that organizations should invest in deliberately.

When teams are distributed, the informal signals that managers traditionally relied on in offices disappear. There are no hallway check-ins, no passive visibility into effort, and no shared daily rhythm. Research on remote performance management is clear that distributed teams succeed when performance is built on clear, consistent, and transparent job-based standards rather than proximity or
presence. Yet many organizations have not made this shift.

Managers still default to activity monitoring, hours logged, and response times as proxies for contribution, which introduces both bias and inequity. For teams spread across time zones, this creates a two-tier system where those who are most visible due to geography or schedule are perceived as higher performers, regardless of actual output.

Person participating in a video conference call, with nine diverse people displayed on a computer screen in a virtual meeting.

Why This Matters

When distributed teams lack clear, transparent standards for what good performance looks like, decisions about pay, promotion, and recognition default to familiarity and proximity. This is how location and schedule become informal proxies for merit, and how inequity compounds across a distributed workforce.

A job-anchored approach to performance addresses this directly: when performance standards are tied to the actual expectations of each job level rather than to personal traits or manager impression, they travel across locations, time zones, and working arrangements without losing their meaning or consistency. Organizations that build performance around what the job requires and assess it through multiple perspectives, including peers and stakeholders, create systems that are credible and fair regardless of where someone sits.

What You Can Do

  • Anchor performance standards to the job, not the person. Define what good performance looks like at each level in terms of the work itself: the ideas an employee is expected to generate, the collaboration and responsiveness their role requires, and the reliability of their delivery. These standards should mean the same thing whether someone is in headquarters or working remotely across a different time zone.
  • Move toward multi-rater assessment. In distributed settings, a manager’s line of sight is limited. Incorporating input from peers, direct reports, and internal or external stakeholders gives a fuller and more accurate picture of how someone is actually performing and reduces the bias that comes from visibility alone.
  • Audit whether reward and recognition decisions are aligned with performance data. If patterns emerge by location, time zone, or work arrangement, that is a signal that the system needs adjustment.

Despite high-profile return-to-office (RTO) mandates from Amazon, JPMorgan Chase, and Dell, the data tells a more measured story. Hybrid work remains the dominant model, with 67% of organizations still operating on hybrid schedules and 22% of workers remaining fully remote. For employees, flexibility has moved from a perk to a threshold requirement.

A 2025 Pew Research Center survey found that 46% of remote workers said they would be unlikely to stay with an employer who ended flexible arrangements, rising to 61% among fully remote workers. The equity costs are also measurable: a 2025 TIME analysis found that more than 212,000 women aged 20 and over left the workforce since January 2025, with RTO mandates and rising childcare costs cited as key drivers.

A spacious, modern office with rows of empty desks, computers, office chairs, and various office supplies, under bright fluorescent lighting.

Why This Matters

RTO mandates are not just a culture question; they are a workforce composition and equity question. Research from MIT Sloan shows that mandates do not improve financial performance but do increase attrition, especially among high performers and those with caregiving responsibilities. For organizations operating across multiple geographies, the more pressing question is not where work happens but whether policies are consistent, fair, and clearly justified to employees regardless of location.

What You Can Do

  • Audit your current work location policies to assess whether they are applied consistently across roles, levels, and locations, and whether the rationale is documented and communicated.
  • Use employee climate surveys and pulse checks to assess how flexibility policies are experienced across different employee groups, paying attention to patterns by role, gender, caregiving responsibilities, and location. What employees say about fairness and access is as important as what the policy says on paper.
  • Shift the management conversation from attendance and visibility to outcomes, establishing clear, grade-specific performance standards that work regardless of where someone is sitting.

An older man with gray hair and a beard, wearing a light blue blazer and a striped shirt, sits in an office chair and gestures with his hands while speaking.

Virtual work is reshaping the world of work, whether we’re ready or not. The question is no longer if it will become the norm, but how we will adapt to it. While some still cling to the comfort of traditional office structures, the world has moved on. So must we.

Since the COVID-19 pandemic, the landscape of work has seen rapid evolution, with organizations turning to virtual work at an unprecedented scale. According to the World Economic Forum’s 2025 Future of Jobs Report, 43% of surveyed employers identified flexible working arrangements, including virtual work, as a promising business practice to increase talent availability between 2025 and 2030. Interest in cross-border virtual work is also rising, with 27% of employers citing it as a potential approach. This shift is not a temporary blip; it marks a fundamental change in how work is organized and delivered.

Yet resistance persists. Critics argue that virtual work erodes cohesion, hampers development, and obscures accountability. But these are not flaws of the model. These are challenges of implementation. The real obstacle is a 20th-century mindset that equates presence with productivity and control with leadership. Offices, as we classically understand them, are structures of control, not facilitation, and certainly not motivation.

One must ask, “What do we gain with this control, and at what cost?” Would it not be better to tackle the challenges of a virtual work environment rather than remain mired in the past? Many in 1910 likely resisted giving up their horses and were not always comfortable with that new mechanical contraption. We got over it. The office, as a physical concept, needs to be consigned to the same place we sent carbon paper, IBM Selectric typewriters, and shorthand.

The start/stop approaches taken by many firms thus far are akin to gingerly putting your foot in what you fear will be ice-cold water. Thus, we have in many organizations the emergence of the hybrid approach with some days offsite and some days on. This model, often touted as a compromise, is proving to be the worst of both worlds: costly, confusing, and unsatisfying. Organizations that fully embrace virtual work will gain a competitive edge in attracting talent, fostering innovation, and building resilience in an increasingly volatile world.

In this second edition of Community™, we explore the evolving nature of the workplace. Is a workplace still a place? Or is it a dynamic ecosystem of people, principles, and tools, untethered from geography?

We’ll examine the decline of traditional expatriate assignments, the rise of distributed teams, and the policies needed to support this new reality. We also share insights from our pilot projects that show how we impute skills and use this information to surface challenges across job evaluation, pay management, and recruitment policies.

This issue introduces a new companion to our Workforce Effectiveness framework: one focused specifically on Workplace Policies. Many of the fundamental features of a workplace related to ensuring safety, enabling creation of a team environment, empowering staff through the provision of resources and facilities, and articulating the employment compact between the employer and employee on the values and expectations within the working relationship need to be seriously addressed with new yet equally potent approaches.

At Birches Group, our largest office is in the Philippines, but our true strength lies in our ability to assemble teams that span continents—from Manila to Nevada and beyond. Virtual work gives us access to talent wherever it can be found, enabling us to connect diverse perspectives, skills, and experiences
across borders. This global reach makes us more adaptable and innovative, equipping us to meet shifting client needs and navigate the evolving demands of the communities we serve.

The future of work isn’t coming. It’s already here. The only question is, will your organization be ready?