Financial Decisions: Work from Home, Back to Work or a Mix?

Financial Decisions Work from Home Back to Work or a Mix

Senior management teams across the country are currently planning and preparing for their employees’ safe return to the workplace. This involves considering various scenarios. Should all staff go back to work? Should they continue to work from home? Or should there be a hybrid strategy that mixes the two?

 
The official advice in the UK is still to work from home where possible. But with the opening up of the retail and hospitality industries, there are more and more staff going back to work. And as the factories, warehouses, hotels, restaurants and shops gear up again, the office-based staff needed to support them are beginning to go back too.
 
For Finance Directors and CFOs, it’s crucial to model the options available for their office-based staff. The impacts of any decisions could have serious knock-on consequences for the financial outlook of some companies.
 
So, what are the options and their consequences?
 

Working from Home

With some understandable issues and hiccups at the beginning, it seems that we’ve largely adapted well to working from home.
 
The benefits of working from home are obvious: there’s no commute, there’s a greater flexibility in the daily schedule, and in turn staff get more time with the family.
 
But it’s also been very hard for many employees to work from home. Some households are multi-generational families, with several adults and children living, learning and working under the same roof. While people were tolerant and adaptable during full lockdown, now that there has been some easing of lockdown, many employees are keen to get out of the home once again.
 
When it comes to making some decisions about staff potentially continuing to work from home, finance leads need to consider the implications. You will need to ensure that staff have quality equipment, like computers and printers, as well as good internet connectivity and access to the software they need. They may need VPNs or new software licences to access the systems they need, along with secure cloud storage and backups. And for support issues, your technical team will need to able to mobilise across the country at short notice. There’s also new insurance costs to consider, to protect the company against cyber risks.
 
Another financial factor is the cost of the premises. Assuming you can cancel your lease, there might still be penalties for pulling out before the end of the term. And if you own your building, will you be able to sell it easily, or at a good price? It’s possible that the commercial office market will suffer a decline as many other businesses will also be considering working from home scenarios for their staff.
 
On top of this, there’s the downside of remote working, with its effects on the culture of the business. A distributed workforce suffers from a lower sense of unity and reduced morale, with some staff feeling isolated.
 

Back to the Office

The UK human resources organisation, the CIPD, says businesses should satisfy three requirements before bringing staff back to work. They say that that workers should only return if it is essential, if it’s safe, and if it is mutually agreed.
 
Assuming those tests have been passed, it’s tempting to get everyone back to work as quickly as possible, to have employees come out of furlough and to get back to a semblance of normality.
 
But just because we’ve worked from home for nearly four months now, it doesn’t mean it’s a sustainable long-term position. In customer-facing operations in particular, there is a desire to get back to the professionalism of before. Not everyone is able to operate from a perfect business-like work space, without no domestic interruptions and with a stable broadband connection. And although clients have been accommodating thus far, as more and more people go back to work in offices, clients will likely choose to work with companies that offer the more “superior” service that in-office working provides.
 
Financially, the costs involved with keeping your office space are likely to be significant.
 
Firstly, the government guidance recommends carrying out a COVID-19 risk assessment, so that you can plan actions that will allow you to meet your legal responsibility to protect your staff and others from any risks to their health and safety.
 
With the two-metre social distancing requirement, your workspaces will need to be entirely redesigned. This will entail changes to office layouts, creation of one-way corridors and increased spacing between desks. If two metres cannot be achieved, then additional risk mitigation, like divider screens, will need to be installed.
 
You will also need to provide extra facilities that will encourage handwashing or sanitisation and instigate more frequent and effective surface cleaning.
 

The Hybrid Option

Cushman and Wakefield, a global real estate services company, believes that social distancing requirements will have an impact on our office densities when it comes to going back. It estimates that the reoccupation densities of our offices are likely to be about 25% of what they were before. So, around three-quarters of workers won’t be able to work in their existing office space, meaning they will require new offices or will have to continue to work from home.
 
It would seem financially misguided to spend out on additional office space to satisfy social distancing requirements when some staff still can – and may still prefer to – remain working from home. This brings about a scenario where some employees go into the office, while others work from home. It could be on a cyclical basis too, where go in on rotation or according to a shift pattern.
 
It seems this matches quite well with the profile of the attitudes of the population in general. Research by StarLeaf found that nearly a quarter (23%) of workers would like to go back to their usual place of work. And 60% would like some extra flexibility to work from home more often than they did before. This hybrid approach would give greater choice for employees and could represent the best of both worlds financially. There wouldn’t be a need to lease or purchase new offices, and while there would still be extra costs for making those at work safe, and helping those at home to operate better, bearing additional costs was always a certainty anyway. It may just be that this represents a good balance for many companies.
 

Running the Numbers

So, for the CFOs and Finance Directors, there are some difficult questions ahead. You need to consider what role the office will play in your company’s future and evaluate the different financial scenarios. It will come down to balancing staff welfare, productivity and overall company performance – all while finding the most cost-effective solutions that will keep everyone safe and happy.
One critical need for your workforce is their business software. Let us help you with a free consultation that can assess the needs of your operation – whether your staff are remote or office-based – and provide a tailored solution for your company. Book an appointment now or contact us for more information.

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Eva Caballero
NoBlue
[email protected]

(+34) 660 10 87 20
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