In March, the general workforce was urged to work from home where possible – to help control the spread of coronavirus. However, despite the guidelines easing in recent weeks, many businesses are yet to make their big return to the office.
Office to Let
It appears that months of enforced working from home has led a number of businesses to consider whether to return to the office at all.
From a financial point of view, it seems like a pretty easy case to weigh up – property costs vs no property costs. However, it’s important to consider the financial impacts of other factors which arise from relinquishing office space.
So, let’s dive in.
Let’s start with the savings: –
Saving the obvious pennies
There is no denying the obvious and giving up your office will save you direct property costs such as rent, rates and insurance as well as direct travel costs (Petrol, train fare etc).
Saving the not so obvious pennies
Aside from those, it will also save you a few pennies elsewhere such as in personal spend with no posh sandwiches and those little trips into town. Saving on travel time should also mean you are less tired from commuting and as a result will likely be more productive during working hours.
What does this mean?
All the above can amount to some serious cash and a large percentage of monthly overheads, they are easy to measure and you will see the cash impact from day one of being office free.
So, can the costs really balance out those savings?
This is not an exhaustive list but factors to consider should include:
As a simple example I use excel a lot (and I mean a lot) and whilst I’ve attended courses, I have learnt the most from my colleagues, their tricks and tips have saved me hours. Sitting next to someone and seeing how they work, how they approach projects and achieve good results can’t all be taught in training courses. Trying to monetise the benefit of being around others is tricky but consider how your team has improved over time due to informal guidance from their colleagues.
Faced with a tricky task or issue, how long will someone spend trying to solve it before it moves from being a useful exercise for them to try to problem solve and become a waste of time. People are more likely to turn to the person in the same room quicker than they are to pick up the phone. The cost of this may be loss of productive time or it may be that the solution reached is not right for your client.
There is no denying some people love to work alone but many of us crave the company of others (and perhaps more so after the last six months). Consider the impact on staff retention if you were to tell everyone to work from home full time from now on. Not everyone has a home conducive to home working – they have made do whilst it has been enforced but it will not be the long-term choice of everyone. The costs of replacing staff are significant including recruitment time, recruitment fees, loss of productivity of the leaver and time to integrate the new starter.
We can zoom and MS Teams all day long but it’s much harder to gauge staff wellbeing through a computer screen. Being with your people and supporting them where necessary will ensure your staff are productive, less likely to need time off and again promote that staff retention figure.
What does this mean?
Unlike the savings element, each of these options are far harder to put a monetary value on – but each one of them will cost you money and time if the balance isn’t right.
Half and Half
The consensus is that a hybrid is needed to suit the needs of the employees but also to balance cashflow pressures in a time when we are recovering from lockdown.
The good news is that good landlords are moving with the times and see the need to move away from strict six- or twelve-month contracts. Some city centre landlords offering three or five days per week options and the flexibility is clearly there.
It really is too easy to look at property costs as the saving and not consider the other significant impacts which in time will too impact your cashflow.
Want to Learn More?
Helen Fleet of HF Financial Strategy works as a Finance Director. She guides companies to deliver their financial and business objectives, which can include cashflow planning, pricing reviews and ways to improve profitability.
If you’d like to discover more about remote working and the HR considerations you should be making, be sure to check out our latest blog: Remote Working – Connection That Transcends Distance.