tim taylor circle - 3 Costly CFO Concerns for Reopening

 

Written by: Tim Taylor, CFO of FM:Systems

 

This time last year, at the beginning of the pandemic when employees began working from home, many CFOs expected productivity loss due to a lack of remote capabilities. At that time, companies were in the early stages of crisis response figuring out Zoom and Teams for virtual meetings, not yet thinking about strategies for recovery. Today, with lockdowns and mask mandates lifting across the globe, leaders of nations and companies accept that economies will reopen and function alongside a virus that remains a constant threat.  

As workplaces reopen, many have debated hot topics of employee wellbeing, office layout, and even the work from home (WFH) benefits with productivity levels at an all time high. So much so, nearly 94 percent of over 800 surveyed employers reported productivity remained the same or increased during the forced work from home period (a far cry from original predictions). 

However, most CFOs have other concerns on their mind as organizations ask people to come back into the office: talent retention, the new cost of the flexible workplace and, of course, liability. I call these the “Costly Concerns” that not only consider the safety and well-being of every employee, but also the impact on the organization’s bottom line. Let’s break each of these down to consider the true cost and path forward:

 

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Costly Concern #1: Reshaping Retention Strategy

 

When it comes to employees, you don’t want to just “retain” your best people. You want to keep them engaged, satisfied and invested. Company culture, community and purpose are values that define most employee experiences alongside benefits. 

It’s clear many employees appreciate the flexibility of WFH and the hybrid work environment to feel safe. By suddenly moving away from this now inherent benefit of the workplace, retention could increase and cost the company irreplaceable dollars. According to The Society for Human Resource Management (SHRM), the cost to replace an employee can be upwards of six to nine months’ of their salary – which can be hundreds of thousands of dollars for more senior and mid-level employees.

As the return to work decisions unfold, CFOs need to determine when, how, and at what level to bring employees back in order to cater to the evolved needs of the agile workforce. Ultimately, there is no one-size-fits-all answer to this costly concern. Most CFOs can provide flexibility by shifting to a hybrid workplace model – combining the best of in-office with work from home – as well as ongoing, direct communication with employees to get a good handle on retention. 

There will also be a growing need to consider new ways of working that enhances the creativity required to sustain talent. For example, new tools that keep employees engaged like AI-based personal digital assistants and reinforcing incentives and rewards. I wouldn’t be surprised if WFH ends up becoming another fad in Corporate America – just as open environments and siloed departments once were. Until then, CFOs need to help companies evolve and leverage analytics to the best of their ability to retain their best talent. 

 

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Costly Concern #2: Implementing the Hybrid Workplace

 

Corporate real estate is the second largest cost of all organizations. With most offices either completely empty or underutilized over the last year, organizations were burning an even bigger hole in their pockets. Traditionally, workplaces included a mix of “me spaces” and “we spaces,” such as private offices and conference rooms. In fact, 73 percent of our customers at FM:Systems used this more traditional, assigned seating workplace design model. However, to manage the cost of real estate going forward, organizations need to convert their workplaces into primarily “we spaces” as many can – and even prefer to – use their home offices as their “me space.” 

 

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A workplace at its best should be used for collaborative environment benefits to interact with coworkers or work on projects. Bringing people together in the office for meetings that are best done in-person, like creative brainstorms, kicking off new projects or simply for an opportunity to bond as a team, are a few examples for how we plan to use our offices while also saving on overhead costs. Post-pandemic, it’s evident workplaces don’t need major campuses anymore with only five percent of surveyed customers at FM:Systems returning to a traditional workplace and 72 percent planning a hybrid strategy. What’s not as clear is how much less space organizations need when transitioning into a hybrid office

While many understand the hybrid office is the reimagined office of the future, the question many CFOs are currently trying to answer is what’s the right amount of space for a flexible CDC-approved workspace while half their workforce plans to remain working from home. The primary goal of reopening is to do so safely, but for a CFO that also means cost-effectively. We should always abide by local and state orders on social distancing for your space and to encourage employees and customers back to your place of business, each place of business will have to make many changes to their workplace. Those changes increase your cost of doing business. A smaller real estate footprint can help offset some of those costs. 

Learn the pros and cons of traditional and hybrid workplace strategies > 

 

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Costly Concern #3: The Risk

 

Asking employees to return to the office? Each CFO needs to ask (and ask again) how their organization ensures they are following CDC recommendations and doing everything they possibly can to take all the safety measures. Simply put: you can’t be too careful. From adding hand sanitizing stations to logging movement, a company must do everything proactively within their measure to control and limit the spread. This includes improving indoor air quality (IAQ) to further ensure a safe and healthy work environment

HVAC systems play a critical role in controlling the movement of air and therefore affecting the potential spread of contaminants. IAQ sensors can help you understand the environmental conditions within specific areas of your facilities. Values for humidity, temperature, CO2, equivalent VOCs, light levels, sound and occupancy parameters provide full visibility into environmental quality for each space and how it relates to occupancy levels. 

 

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The first phase in reopening is understanding all of the company’s and building’s responsibility and potential liability of requiring employees to come back into the office. Imagine the scenario that a non-essential worker is asked to return to the office who previously said they would prefer to stay home and then they get sick. That wouldn’t bode well for the company’s reputation or wallet. Then, there is the “vaccine liability” – or lack thereof. While I imagine a majority of the workforce will go out and get vaccinated, organizations cannot discriminate against people who did or didn’t get the vaccine. And while there are some contact tracing applications out there, the privacy of such solutions has been questioned. 

In the coming years, I imagine the courts will eventually rule on vaccine and workplace responsibility. Until then, each CFO needs to first understand and track their compliance within their industry’s guidelines and regulations – whether HIPAA in healthcare or various state laws. That can be a job in itself to ensure you are within regulation and avoid hefty fines down the line. 

As CFOs look to a post-crisis future and figure out the best outcome for these three costly concerns to reopen, the health and safety of every employee needs to be the driving cost of every workplace. Technology is at the forefront of reopening and CFOs today have solutions at their fingertips to help make the most informed decision available – from analyzing space utilization for better forecast on supplies, cleaning and desk needs to “hoteling” solutions that help track movement and meet CDC guidelines.

Whether the legal liability, the fear of losing good talent, or simply the cost of rightsizing, all three concerns have a bottom line impact that each CFO needs to consider as we reopen buildings and welcome back employees.

 

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