WFH—work from home—has become one of the most recognizable acronyms amid the COVID-19 pandemic. Search interest for “WFH” spiked, hitting an all-time peak the week of March 15-21, 2020 and remains relatively high in August (see Figure 1). Trends on social media then emerged where young business professionals showed off their “rona rigs,” which are elaborate (or sometimes sad) home workstations consisting of numerous monitors, standing desks, and other office gear. While the movement to more flexible work situations has been growing for some time, COVID-19 has certainly been the catalyst that accelerated change for companies of all industries and sizes. Organizations are now facing the near- and long-term impacts of a work from home culture.
Large tech companies have been the most outspoken about the future of WFH with their employees. Twitter announced employees have the option to work from home “forever,” and Google announced its plans to keep employees at home through at least July 2021. Less likely industries, such as healthcare, are now considering what percentage of employees can remain remote to support both normal operations and shifting future operations given the increase in telehealth activity.
Amid re-openings and continued uncertainty, businesses must now consider what role working from home will play in their operating model moving forward. Recently, Credera introduced the Now, Next, Future framework to help contextualize these types of decisions and their impacts. The choice to integrate remote work into the model is no longer just in the “now,” as the prolonged period for working from home continues and companies must plan for the “next” and the long-term “future.” Below we will explore guiding questions to see how the dimensions of people, technology, and financials will be affected.
Note: Value of “100” indicates peak popularity in the given time period and a value of “50” means the term was “half” as popular (Data Source: Google Trends)
People, both current and future employees, will be directly impacted by the decision to shift (or not shift) some portion of the workforce or work week to remote working in terms of office culture, productivity, and hiring.
Office Culture: At a macro level, there is mixed sentiment from employees about remote work. A recent study done by getAbstract found that approximately 43% of full-time employees in America “want to work remotely more of the time.” These statistics, however, may not reflect the preference of your specific employees. Leaders should take careful note of not only employee sentiment, but also the impact to your company culture. Some aspects of culture are inherently driven through interpersonal interaction and can be diluted through a remote model if care is not taken.
Is your workforce (executives through junior associates) excited to have a remote work option?
Does your culture thrive on interpersonal interaction?
Productivity: While remote work can provide flexibility, it can carry a risk of reduced productivity when sufficient communication and parameters are not put in place. There are many tactical strategies for boosting productivity remotely. Nicholas Bloom of Stanford University suggests that activities such as regular check-ins, promoting practices that separate work life and family life, and collaborating via video calls can help increase productivity.
Part of productivity in WFH is having a functional physical environment. Some employees may not have this luxury and will need to reexamine employment and living situations if WFH is mandated. If remote work is going to be part of the future state for your business, it is critical that senior leaders commit to the strategy, communicate a vision for how remote work can be more productive, and lead by example.
Has your business seen productivity declines driven by remote work?
Is senior leadership willing to commit to what is needed to drive a productive WFH climate?
Do your employees have an appropriate physical environment in their homes to work in?
Hiring: Remote work allows business the unique opportunity to draw from talent pools outside the normal geographical bounds of physical offices. Adding skilled employees located elsewhere that otherwise could not work for your business is a benefit for many companies operating outside core job centers. There are, however, challenges in determining salary when the position is not directly tied to a market. Talent acquisition and human resources teams also must be equipped to effectively manage the new hire process from application through onboarding. When considering hiring, leaders should also consider the value that WFH provides to the prospective employee and the norms for a given industry. For some future hires, it could be a draw, but for others it could be seen as a hinderance.
Does remote work allow your business to tap into previously inaccessible talent pools
Are your talent acquisition and human resources departments able to effectively evaluate applicants from a distance?
Technology can be either an inhibitor or an enabler to any WFH strategy and is foundational in planning for the future.
Technology: Technology is the backbone of business operations in the 21st century. The rapid shift to WFH caused by COVID-19 tested business continuity plans. Those who did not have sufficient plans in place were forced to find solutions quickly and adapt their existing technologies, often at the cost of disruption to operations. While those short-term technology solutions may work in the “now,” their viability over longer time horizons must be evaluated. If growth is part of your enterprise strategy, your technology must be able to support that initiative, and a WFH policy adds another layer of complexity to that decision. Companies should consider investment in technologies such as VPNs for developers to access codebases, Video conferencing software, network security for remote users, and security training for employees to name a few.
Does your technology support the need for collaboration and frequent checkpoints?
Is your enterprise technology able to support not only your current employee base working remotely, but also anticipated future growth?
Is your enterprise technology adequately set up to protect against heightened security threats?
The financial impact of adding WFH will be both immediately observable (such as lease cost reduction) and less apparent (such as the cost of productivity declines).
Financials: Moving toward WFH provides an interesting opportunity for companies able to reduce fixed costs. Company budgets for office space leases and overhead involved with coordinating supplies, energy, and maintenance can be substantial. Reducing office footprint in terms of square footage can lower these costs. If your business owns its office space, there may be opportunity to divest, sublease, or repurpose the space.
While some costs may decrease, other areas will grow. Companies will need to outfit their remote workers appropriately. That could mean stipends for home offices and investment in laptops. If your workforce operates on local desktops, there may be little salvage value for that equipment. Software and other technology related expenses will increase. Intangible costs are some of the hardest to account for. An example would be determining if and how productivity declines will ultimately cost the businesses. This could take many forms such as lost revenue, reduction in ROI from project delays, or weak output from poor collaboration. Understanding both the current and future savings together will paint the picture of financial impact.
How will earnings and cash flow be affected both now and in the future (i.e., potential productivity losses, lease impact, overhead, office supplies, software subscriptions, stipends, etc.)?
What investments must be made (i.e., technology, people, acquisitions, etc.)?
How does this affect investments that have already been made (i.e., real estate, software, equipment, possible divestitures, etc.)?
A survey done by Gartner showed that 74% of chief financial officers plan to shift more than 5% of workers who were previously on-site to a fully remote position. As your business considers what role remote work will play in the future, consider the guiding questions highlighted above. There is no one-size-fits-all solution for a remote working model and determining if and how your business will adopt new policies is an important decision as we continue to see the fallout from COVID-19. For a partner to help your organization navigate these strategic decisions, reach out to Credera at email@example.com.