Organizations around the world are using remote working arrangements to save on real estate and other operational costs.
A recent survey by the Capgemini Research Institute involving more than 500 organizations from various sectors around the world, featuring 5,000 employee responses has revealed Covid-19 has impacted workforce trends.
The survey shows that global markets have begun to normalize remote working as lockdowns, restrictions on travel become normal.
This has increased the demand for virtual operations and brought to light the unexpected advantages of remote working to organizations, including productivity and cost-cutting.
The survey revealed expected weighted average cost savings on real estate of 32 per cent due to remote working in the next 2-3 years.
“Ever since lockdown measures were put in place, organizations have been looking at their real estate infrastructure and revisiting ownership and leasing strategies. In our survey, 88% of organizations agree that they have realized real-estate cost savings with remote working in the last three to four months, and 92% expect savings in the next two to three years,” said Jerome Buvat, Global Head of Research at Capgemini Research Institute.
According to the research, the public sector stands to realize the most cost savings from remote working when compared to other sectors, with some public organizations able to cut back expenses by nearly half (48%).
“According to the World Bank, governments and the public sector are extremely asset-heavy in terms of real estate and need to readily reevaluate their long-term real estate portfolios and strategies to offset declining revenues as a result of the Covid-19 pandemic,” explained Buvat.
Insurance, retail and financial services could also realize significant cost savings owing to their rapidly expanding digital base.
The study says even labour-heavy industries such as industrial manufacturing, consumer products, telecoms, energy and utilities stand to gain by at least 20%
About half of all organizations surveyed said they were planning to cut down on office space in the next two to three years.
Around 20% of these plan to cut up to a quarter of their office space, while an additional 10% plan to make an even bigger cut. And this is just to do with real estate savings.
Employees however have mixed reactions on the outlook for remote working, mostly in contrast to employer perspectives. After a year, it seems employees have grown weary of working from home, a change in sentiments from the early work from home drive at the onset of the pandemic.
Up to 61% of employees said they had fewer opportunities to network with peers and seniors as a result of remote working arrangements. Another 58% felt that remote working hinders tasks that require internal or external collaboration while 57% said they thrive in an inter-personal/social setting.
Employees also said they felt disconnected from the organization and colleagues due to remote working. The pattern suggests that in the long-term employers are better off with a more hybrid approach.