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Finance leaders, scouring balance sheets for costs to cut, are considering reducing the need for office space by permanently shifting a portion of employees to working remotely, according to a survey released Friday.
Allowing employees to work from home, which was once considered a perk for senior employees or hotly sought after hires, is now a lifeline for countless companies hoping to keep operations running amid social-distancing measures aimed at slowing the COVID-19 outbreak.
It’s becoming increasingly likely, however, that many workers, who have hastily converted guest rooms and breakfast nooks into home offices, won’t return to company headquarters even after the public health crisis is over.
Nearly three out of four finance leaders surveyed earlier this week by Gartner, a research and advisory firm, said they plan to move at least 5% of their workforce that had previously reported to an office to a full-time, remote schedule. Gartner interviewed 317 finance leaders, including more than 200 CFOs, from companies that ranged between about $500 million and $50 billion in annual revenue, with as many as 100,000 employees.
“This data is an example of the lasting impact the current coronavirus crisis will have on the way companies do business,” said Alexander Bant, practice vice president, research for the Gartner finance practice. “CFOs, already under pressure to tightly manage costs, clearly sense an opportunity to realize the cost benefits of a remote workforce.”
Some respondents to the Gartner survey said they would look to permanently transition far more than an additional 5% of employees to remote work. About 4% of survey takers said they would leave 50% of their workforce remote, 17% of respondents said 20% would remain offsite, another 25% said 10% of workers wouldn’t return to an office.
CFOs “want to make sure they are squared away in the short term. Depending on how long the social distancing continues, they want to see what kind of concessions they can get from landlords,” Bant said. But beyond the immediate response to the public health emergency, the shift to more remote workers is a cost-saving measure finance chiefs have been circling even before the novel coronavirus pandemic, he added. One crucial implication of maintaining more remote workers is that “CFOs can take advantage of different labor markets if they don’t need to hire staff into their central office,” Bant said. “It could be offshore or other domestic markets. It gives them access to skilled workers in new locations that they wouldn’t have considered in the past.”
Other costs cutting moves finance leaders have made in response to the COVID-19 outbreak include canceling all offsite events, enacting a hiring freeze and delaying capital expenditure investments and payments to suppliers, the Gartner survey said.
“All CFOs are truly looking at how to match expenses to revenue. There’s a number of things — capex and real estate and compensation — (that) are always major expenses in an organization,” said Paul McDonald, senior executive director at staffing firm Robert Half International.
McDonald added that CFOs are still learning what departments and functions in their companies can make the transition to remote work, for both the short-term and permanent. “It might be too soon to make those predictions,” McDonald said. “What I would say is that I’m very impressed at how companies I am dealing with quickly adapted to this health crisis.”