By rethinking how employees work, companies could reduce the amount of office space they need, driving lower costs and a better employee experience.
For many organizations, the results of the pandemic-driven shift to remote work have been better than expected. Respondents to the January 2021 Fortune/Deloitte CEO Survey confirmed their October 2020 findings, indicating that remote working is here to stay: More than one-third of their employees will continue to work from home even a year from now. This has prompted leaders across industries to rethink where their employees work for the longer term—and how this could change their need for office space.
The October 2020 Fortune/Deloitte CEO Survey found that 76% of CEOs indicated that their organizations would need less space moving forward. This could drive significant cost savings in both operating costs and capital expenditures. Real estate and facilities are often one of an organization’s top three expenses; as a rule of thumb, they can represent 2% to 5% of organizational revenue.
The extent of the potential savings depends on several factors, including:
Depending on how aggressive organizations are with these and other considerations, our experience shows that they may find it possible to reduce real estate and facilities costs by 10% to more than 20%. And cost savings aren’t the only potential benefits of shifting work to the home. The ability to recruit workers from anywhere could open up a much broader talent pool, and the flexibility that remote work enables could improve the employee experience.
CFOs know finance transformation can be difficult and time-consuming. But they also know it’s an effective way to keep up with the changing needs of the business. Whether it’s technology disruption, business model innovation, or a new industry ecosystem, Deloitte helps finance organizations look ahead to what’s next while keeping the ship on a steady course.