Working from Home: A New Business Strategy and Positive Outcome of the Pandemic
Contributed by Anne L. Bohn, MBA, CPA (inactive)
Working from home as a business strategy may be a new concept for management, but it can make sense, both economically and strategically, as it provides great flexibility for both the employer and employee.
We all know that some jobs require person to person contact best done on the premises of an employer. But there are many jobs previously done in the “office” that can be done at home. The Pandemic has forced some employers and employees to work from home, dragging both into the 21st century of online software and internet connectivity. This may be a good time for companies to continue to experiment with the work from home (WFH) strategy to determine both its effectiveness and longer-term benefits.
The benefits for employees who wish to work from home can be substantial – the ability to work from home is a benefit in itself and often generates great company loyalty. For the home-based employee, additional benefits include:
- No commuting time or cost resulting in extra time and money for employees that can be used for other needs and responsibilities
- No dress code – at the employee’s professional discretion
- Flexible work schedules that enable employees to meet both family and employer obligations
- The ability to respond to meetings in varying time zones around the world efficiently without leaving home
- Increased productivity with less interruptions
- Company sponsored office furniture and equipment
There are some employer benefits as well.
Reduced Turnover
Hiring and training employees is expensive. Employers want to hire the most qualified people possible and retain them while minimizing costs. Employee turnover is one of the most expensive parts of running a successful enterprise. According to Gallup Workplace, “The cost of replacing an individual employee can range from one-half to two times the employee’s annual salary — and that’s a conservative estimate.”
As a result, employers want to minimize turnover. Often, the most qualified candidate has WFH requirements such as childcare, ageing parent care, disabilities etc. that keep them from accepting a job that requires in-office work. Allowing and even promoting certain jobs that can be done effectively from home, especially those jobs that can accommodate a flexible schedule, allows the employer to tap into those highly valued talent markets. I was the CFO of a company that intentionally hired employees to work from their home offices around the country with great success. In this case, we found that WFH employees produced the best results and were very loyal.
Reducing Expenses
Office space is expensive. Furnishing an office with ergonomically correct office furniture and equipment along with the related amenities such as a reception room, kitchen, meeting rooms, storage and file areas, exercise facilities, snacks, lunches and coffee can add up. By strategically choosing what jobs can be done at home, management can significantly reduce or even eliminate office space expenditures. A portion of these savings can be used to provide the tools and equipment needed by the WFH employee – at a very reduced cost to the company. A company might provide a reasonable home office allowance to WFH employees that covers the one time set up costs of an at-home office. We found that the allowance approach gave employees flexibility of choice and relieved the company from purchasing responsibilities.
Client Proximity
As we are finding out, travel is not as necessary as we previously thought. Travel was significantly reduced during 9/11 when airplanes were grounded and border-crossing were restricted. This is happening again with the shelter-at-home directive most states are experiencing during this Pandemic. In our increasingly globalized world of business, employees working from home can be hired by region thereby providing greater coverage for their employer when servicing similarly regionalized customers. For example, a west coast-based employer with east coast clients can hire east coast talent to provide better client service and coverage while also reducing the time and expense of employee travel to service those customers. Previously, it made most sense to have these employees based out of a corporate office and travel to clients as needed. With the adoption of connectivity and the increased reliance on customer integration and relationships, it may not make more sense for the client’s location to be the hub for those employees.
Key to Success
The key to successfully adopting a WFH workforce business strategy is management’s commitment coupled with communication, communication, communication. Not all jobs qualify – management should identify which jobs can be realistically done from home and which cannot. This information should be published for all employees and job candidates to see.
Management should avoid micro-managing by establishing clear communication channels, performance expectations and expected results. It is management’s responsibility to provide consistent and honest communication – including bad news – this helps generate employee trust. Examples of management communication might include:
- Clear and consistent communication of Annual Strategic Plan and related Operating Plan
- Weekly newsletters for all employees from top management
- Weekly one on one meetings for direct reports
- Monthly online meetings from top management with updates about status of Annual Strategic Plan and related Operating Plan with any revisions
- Quarterly in person functional area meetings
- Semiannual or annual all hands in person meetings for all employees
Support
A home-based employee must have the proper tools which should be provided by the employer. Such tools include an office set up similar to that which would have been provided in the office (i.e. ergonomically correct desk and chair, laptop, monitors, printers/scanners, fast internet connectivity, VPN). With the wide adoption of connectivity and communication tools employers can grant access to employees easily and securely. Examples of these tools are MS Outlook, Gmail, Slack, Zoom, MS One Drive, Google Drive, Expensify, Certify, When I Work, GroupMe, Microsoft Teams.
Many companies are already paperless and store their information either online or in a company-wide electronic document storage with proper security and access. These companies are ahead of the game since the WFH employee can easily access necessary documents and information outside of the office.
Successfully implemented, the WFH strategy can improve employee retention and morale, reduce costs, and improve profitability. Now, during this Pandemic, might be the perfect time to try it out!
For more information on successfully managing a remote workforce, click here to view our webinar.