CFOs play a central role in rethinking the post-pandemic office — not just for the finance team but also for the entire organization. Their financial expertise and acumen can help clarify a fundamental evaluation of the value of physical office locations. This type of comprehensive analysis is important to keep in mind as many organizations consider making permanent the hybrid working models that they deployed at the onset of the global pandemic.
Today, there is a clear and pervasive recognition that a majority of employees favor remote-working models and that staffs are largely as productive and effective, if not more so, when working remotely. While demand for hybrid working models is high among employees, it’s not just a benefit to them. There is a significant opportunity for companies to improve productivity and discover more efficient and resilient operating models. Thus, as more companies design hybrid working models, CFOs have an opportunity to elevate these initiatives by reassessing the value that office facility investments provide to the company, its employees and its customers. If these exercises and analyses are to yield strategic insights, finance leaders will need to work through related considerations such as the following:
- The labor model: CFOs and executive teams should leverage the office and real estate evaluation process to reassess their labor models—an exercise that requires the finance group’s tallying of the total expense of full-time employees, including personnel and capital costs. In addition, finance teams should perform financial and operational impact analyses of other labor model strategies, including flexible labor models that rely on a blend of full-time employees, temporary staff and gig workers, as well as relationships with consulting and staffing firm partners.
- Supporting technology: The pandemic has vividly demonstrated that cloud technologies and innovative collaborative tools can greatly enhance virtual interactions while improving human and system workflows. These types of technology investments play a crucial role in the success of remote working models.
- Tax exposure: Finance groups and their tax and human resources colleagues should evaluate the tax implications of remote versus in-person versus hybrid working models. Different states and cities have different payroll tax rates and rules, a factor that gave rise to tax determination and regulatory complexity during the pandemic amid the sudden and widespread migration from offices in one state or city to homes in other locales. Many states and cities have squared off against each other in pursuit of that payroll tax revenue. Different work rules by state or city also carry different cost and operational considerations.
- Environmental, social and governance (ESG) implications: Another factor to consider is the impact of remote work on the company’s carbon footprint. Consider the attendant effects of remote work on commuting, business travel, office space requirements and cloud computing. As ESG reporting advances, being able to quantify impacts in this regard will be important.
Most companies navigated the historic shift to remote work far better than anyone could have imagined prior to the pandemic. Now, it’s time for CFOs and their colleagues to leverage that impressive performance by reimagining the office of the future and the underlying labor model that will help maximize customer experiences and build long-term value for the organization.
Interested in learning more? Further insights and our full report, Security, Data, Analytics, Automation, Flexible Work Models and ESG Define Finance Priorities, are available at Protiviti.com/FinanceSurvey.