A recent ONS report shows that a typical employer saves in excess of £8,000 pa, for every employee in their firm that works remotely for 50% or more of their normal working hours, which is quite a saving. In addition, the same employee would him or herself save at least £4,000 pa, from the additional costs of travel, clothing and food if they return to the office full-time.
Office Return: Is remote working efficient?
For a whole host of reasons, a decision to return to the pre-pandemic working full-time at the office is an issue that many businesses keep kicking down the road. The Omicron variant scuppered many firm’s plans to start the new year back at the office.
Currently the 1st of April is the next date that many firms are planning for, but it’s a complex decision to make. Firms need to balance what’s best for the business as opposed to how the employee wants to work, which will differ from person to person. Some are desperate to get back to the office, whilst others rather enjoy the time they gain from skipping their commute, plus they have a better work-life balance and more time to spend with friends and family.
Remote working isn’t suitable for everyone; some jobs require a physical presence and in those that don’t, the individual might need the social aspect of an office space to perform well. On a practical level, not everyone has access to an effective remote working environment, with stable broadband access.
There is no one-size-fits-all answer on whether or not to maintain the status quo or return fulltime to the office. Unless there’s an overwhelming reason to return to the office, many companies are still weighing their options. The key pressure to make a decision will come from businesses’ forward planning, especially on budgeting.
Office Return: Employee Costs
If you decide that you want everyone back at their desks, there will be costs such as additional training. Also, as many firms have already found, some employees will have decided that the grass is greener on the other side and resign, thus triggering recruitment costs. These leavers are likely to be your top-performers who can now potentially work with remote-work orientated companies anywhere in the world.
On the other hand, if your firm has included a remote work option, it is likely to retain key staff and if you’re based in a location that typically pays a premium, such as London, you could hire people from anywhere in the world, pay them more than what they would normally earn in their own country, but less than what you’d pay anyone local. I have two clients who have effectively done away with their IT sections and sourced their IT support from Mumbai in India.
Office Return: Office Costs
It is blindingly obvious that whatever decision you make, it’ll have a significant impact on your office needs. Whether you choose to be all-in, all-out or select a combination or the two, your overall office costs will be directly impacted as it’s unlikely you will need the same amount of office space. Individual desks could give way to hot desks, but as a consequence you’re likely to have to spend for more on tech.
Also, and not to be under-estimated, is how you encourage people to return, either full-time or on a hybrid basis. As a minimum, you’ll need decent connectivity, an attractive and comfortable space with decent facilities, good coffee and whatever else it is that is important to your people.
And do not forget, Omicron is unlikely to be the final Covid-19 variant, so it’s likely that we’ll be living with the nasty little bug for some time yet, so sanitation and ventilation will remain important.
Office Return: How many businesses have voted with their feet?
The ONS report also showed that around 50% of businesses have already come to a decision and the indications are that unless a physical presence is needed, because of the nature of the job, the hybrid model is being adopted by the majority of those businesses that have already made their decision.
Clearly, a switch of this type will take careful planning and a significant mindset shift, especially in traditional businesses, but the advantages are there. It is more likely that you’ll retain your most experienced staff, they are likely to be happier and both you and them will be better off!
Tax Accountant’s view
I’m rather ambivalent on this issue; I agree that a model that involves working from home will suit many businesses and their employees, but it is not ideal for everyone. The ONS report also made the point that working from home can have a disproportionately negative impact on junior and lower earning members of staff, who may not have a quiet space to work or struggle with the quality of their broadband.
It can also have a negative impact on productivity, an example of which is HMRC, who through most of the pandemic have had 80% of staff working from home and it’s been a shambles. So, in my opinion the jury is still out!