CFOs Grapple With Cost and Cultural Balance Around Return to Office

remote worker

The cost realities of today’s environment have CFOs shifting focus to their organization’s profitability basics.

And as business leaders look to realize efficiencies and cut costs; answering the question of hybrid, remote, or full-time in-office employment policies is growing critical to reassessing internal spend.

This, as the pandemic-era autonomy given to employees over where and how they work appears to be shifting back toward on-premises, return to office (RTO) requirements.

Employer plans for work from home (WFH) are trending down, according to new research (Feb. 12) from the Survey of Working Arrangements and Attitudes (SWAA) conducted by Stanford University and University of Chicago economists, which finds that 13% of full-time workers are fully remote compared to 59% who are full-time on site, while 28% are in a hybrid arrangement.

This hasn’t stopped nearly 3 out of 4 London workers (73%)  from reporting they would rather quit their jobs than return to the office full-time, with many saying it would take a pay raise of at least 16% for them to consider the shift, per Bloomberg data.

Working from home is more common in major cities than smaller cities and towns, and remote employment is most common in the technology, finance, and professional and business services sectors, the SWAA findings show.

In Manhattan alone, remote work is costing restaurant, retail, and service businesses over $12 billion a year as desk workers no longer line up to buy lattes and salads or expense taxis and black cars for their commutes.

As PYMNTS reported, already new iterations of B2B businesses that serve office workers, such as catering lunches, are emerging in response to hybrid working’s new normal.

What CFOs Are Saying About a Return to Work

“From a CFO perspective payroll is the largest P&L line item,” Milan Parikh, CFO at workplace equity platform Syndio, told PYMNTS in an earlier interview, “and when you have happy employees you have a higher retention rate. The number one thing you want to take care of is your own employees.”

While many workers are reluctant to give up the flexibility they’ve come to enjoy while working from home, many employers view a return to office as necessary for building a strong, cohesive workplace culture.

Syndio itself embraces a remote model. “Fundamentally, I think it comes down to how do we keep people productive no matter where they are … I think there’s some revolt and some rebellion that’s happening right now [around the return to office]. So I think we’re going to come to a new paradigm in terms of what balance means around being in the office versus working from home,” Parikh added. “I think that striking that balance is the nut people are still trying to figure out how to crack.”

Lara Stell, CFO at mPulse Mobile, told PYMNTS last month that while remote work offers attractive cost savings and working capital efficiencies, she is making sure to keep an eye on the career progression of the company’s new employees. “I started out as an auditor and then went the CFO route because of where I was sitting, now you don’t really have those water cooler side conversations where you hear what options are out there, what people are doing organically.”

Kevin Held, CFO at Hazeltree said in a January discussion that while he is always looking where the company’s cash goes, he sees efficiencies on both sides of the conversation. “We would like to get the employees back in the office, but we do understand there is a balancing act needed from the standpoint of what the employee wants. Still, there is something to be said about having everyone together in one space.”

As Nathaniel Katz, CFO at ROKT, told PYMNTS, people are at the heart of process, and process is at the heart of profits.

Recent PYMNTS research in the “12 Months of the Connected Economy” report finds that work from home and hybrid work increased by 10% last year, despite a relaxation of pandemic restrictions.

And while the work-from-home trend is hurting brick-and-mortar businesses in urban downtowns, it’s good for eCommerce. PYMNTS’ research found that these workers shop online twice as much as their onsite peers.

Outside of macro and reactionary needs, decisions around employee policies should be made in such a way that they best support overall organizational goals.

This means they will look different very each organization depending on the type, stage, and unique culture of the company. For now, CFOs are taking the future of work one day at a time.