Written by David Cross
March 10, 2021
Ask the Question: What is the End Goal?
I’ve been thinking recently about the proverb “Necessity is the mother of invention.” That came to me because I keep discussing with our clients the impact that COVID-19 has had on the way companies are doing business. When COVID-19 hit, virtually any company that could operate on a work-from-home (WFH) basis did so. And now that companies are planning their return to pre-COVID operations, some are finding that there may be benefits to maintaining some forms of WFH for their employees.
I keep hearing comments like:
However, when talking about any anticipated outcomes, organizations really need to go back to this fundamental question: why would our company change its operating strategy to be more oriented to WFH?
Identifying Your Desired Business Outcome
Before making any decision related to adjusting workplace arrangements, leadership needs to consider the many possibilities through the lens of a much larger set of issues that all circle back to the specific rationale for taking such actions.
To help with this process, I created a table that lays out the different business rationales and the implications of each policy.
|If your objective is . . .||Need to consider . . .|
|Realize cost savings||Whether new expenses such as home office equipment, additional administrative burdens, and continuing to maintain some office structure for employees really results in cost savings.|
|Broaden the talent pool beyond the traditional geographic area||While this may increase talent pool, it also could create a more unstable workforce with employees increasingly being able to ‘vote with their feet’ in finding another job for more pay, etc.|
|Maintain a strong compensation tie to the external market||A WFH structure will likely have an impact on an organization’s compensation strategy. Organizations may need to consider such factors as: geographic adjustments, labor markets for talent, the importance of the internal equity, targeted %ile for base salary and total cash, etc.|
|Realize productivity improvement||There is some evidence showing that employees don’t work the same amount of time they did when they were in the office. This will put pressure on the company’s ability to set more robust measures of performance – both for individuals and for the business.|
|Recruit diverse employees||With a broader geography to hire employees, highly skilled foreign workers with specialized talent and knowledge requiring H1-B1 visas may be less inclined to join an organization in lieu of working for a company that would sponsor such a visa to work in a specific geography.|
|Lower administrative cost / process||With people possibly working from other geographies, additional payroll processes for taxes in a larger footprint of geographies, for example, may increase administrative burden and associated costs.|
|Respond to employee demand||While there is survey information showing that employees prefer a WFH environment, that is not universally the case. For companies that have a mix of office vs. WFH, a company will need to be diligent to ensure that there are not two ‘classes’ of employees that may have implications on the culture of the company.|
When I talk to clients, I am continuing to press on the fundamental question people should be asking – what are you trying to achieve? Pretty basic I know, but sometimes the best approach is to start with the simplest of questions.