Working remotely is good for finance. Here’s why!
February 11, 2021
Working remotely, or working from home (WFH), is not a new concept. I transitioned to working remotely about five years ago, but before 2020, many companies only used WFH options on an exception basis. Perceptions that people were less productive when working from home – along with technology barriers and concerns about control and trust – imposed limits on working remotely.
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The pandemic changed everything, making remote work a necessity rather than an option. While employees dealt with significant challenges in making the transition (including finding suitable schooling and/or childcare solutions) many have embraced working from home. As many as 30% have said they would quit if they had to return to working in an office after the pandemic, and 80% expect to work from home at least three days per week. Moreover, according to a survey by the Institute for Corporate Productivity, 50% of respondents said they planned to expand flexible work arrangements in the future. Finance, in particular, is positioned to thrive in a remote model. Evidence shows that traditional in-person activities like monthly close went smoothly for many companies despite working from home. In many instances, the close went even better than expected due to the enforcement of materiality thresholds and diligent communications.
Finance is positioned to thrive in a remote model
In the finance function, we expect to see remote work continue whether in “hybrid” or “fully remote” models. Tasks not requiring an on-site physical presence or a high level of in-person interaction with others are prime candidates for remote models.
The fact is that a majority of accounting work can be done remotely with the right enablers in place. For example, companies could move to 100% electronic invoicing and payment to cut out the need to be in-office to scan snail mail and send checks. However, site-specific work, like cash collection in a Direct Store Delivery (DSD) model for a bottling company, would need to be done on-site until contactless transactions become widespread. Areas such as Financial Planning and Analysis (FP&A), which require more business partnering, may benefit from in-person collaboration but can likely be transitioned to a fully remote model over time (see figure below).
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Source: Accenture analysis, January 2021
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Finance functions need to have a few basic elements in place to make remote models work:
- Technology enablement. This means advanced cloud and automation capabilities as well as strong cybersecurity and data protection practices.
- Comprehensive policies and support for employees. Employees need training and resources to leverage the full value of collaboration tools, along with proper at-home infrastructure.
- An inclusive culture. Companies should articulate the expectations and implications of working from home models. They should also promote a culture which embraces flexible work models and promotes and develops employees regardless of where they work.
This won’t happen by itself. Companies, for example, need to train managers to effectively coach, counsel and provide effective feedback on a virtual basis.
Benefits of a remote workforce go beyond cost reduction
While there are some savings associated with remote models – including a reduction in facilities and personnel expenses or the removal of ancillary benefits such as commuter rewards – cost reduction is not the primary value lever. CFOs are likely to find greater benefits from increases in productivity and employee satisfaction and the expansion of the talent pool across geographic borders.
- Cost Reduction: On average, and according to Accenture benchmarking data, it is estimated that companies spend $11,000 per full-time equivalent (FTE) on facilities expenses per year, but we expect remote models to reduce that figure dramatically. Our data also confirms that personnel costs represent approximately 70% of the typical finance budget.1 Some companies have experimented with location differentials in compensation planning, while others plan to compensate employees the same regardless of where they live and work.
- Productivity and Retention: Furthermore, a recent survey claims that employees are 15% more productive working from home than in an office location. Several CFOs, in fact, have said they have found their own remote work experiences to be remarkably productive. Similarly, employee satisfaction and retention increase significantly with the flexibility afforded by remote work, as employees gain time lost to commuting, spend more time with family and are better able to stay fit and pursue personal interests. As well, for employees that work remotely, seven out of 10 claim they would be more likely to recommend their company to a friend. There are also indicators that more flexible work options lead to increased gender equality in the workplace, especially at senior levels. In my own personal experience, WFH allowed me to stay intellectually stimulated while balancing the needs of a growing family. In the long term, remote options may even help increase the number of female CFOs (currently 12 out of the Forbes Global 100) by retaining female talent in the workforce.
- Borderless Talent Pool: Finally, one of the biggest upsides to a remote workforce is the ability to attract new employees who live in places where the company might not have looked for talent in the past. This is especially true for finance leaders who require skills which are not geographically concentrated in specific regions.
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Because of the pandemic, many finance functions had no choice but to transition quickly to remote work models. As CFOs are discovering, however, the swift move to remote work is delivering unforeseen benefits and may well become the norm in the post-pandemic work environment.
Reference:
1. Accenture Enterprise Value Targeting Benchmarking Data, Cross Industry, January 2021.
