This is the third and final analysis in a three-part series that highlights different business observations uncovered when we conducted our Q1 2021 SaaS CFO Pulse Survey in March.
In today’s post, we review the 2021 plans regarding “Hybrid & Remote Work Models for 2021,” and “Office Space Planning” from approximately 100 senior Finance executives in SaaS & cloud companies. As well as key findings from Microsoft’s Work Trend Index regarding hybrid-remote work.
Hybrid & Remote Work Is Changing the Way SaaS Companies Have to Operate
We start with 78% of SaaS Finance executives saying their companies were planning to continue hybrid-remote (partially remote and partially in person) and 18% said their companies would continue to operate fully remote.
Hybrid & Remote Work Impacts Office Space Planning
As hybrid models become permanent, 65% of SaaS Finance executives agree that they plan to decrease office space in 2021, while 21% are expecting to increase office space.
Increased hiring in 2021 is commensurate with expected, continued growth in SaaS companies, and is driving some SaaS companies to look for more office space. Even when less than 100% of employees are actually working in the office, as many companies may still be planning to work in a hybrid-remote model in 2021, more space is still a requirement.
Hybrid-Remote is Changing the Way Companies Operate
With more fully remote operating SaaS companies, and most other companies working hybrid-remote, big changes are happening in 2021 with the way companies are planning.
If COVID-19 taught us anything, it is that we can make big changes fast. Most of us thought a year ago that the shift in how we work was only short-term, but we are starting to understand that many of the changes are permanent.
At the end of March, Microsoft released the findings from its first annual Work Trend Index. The overarching conclusion of the report is that hybrid-remote work is here to stay and companies must rethink long-held assumptions.
“The choices you make today will impact your organization for years to come. It’s a moment that requires clear vision and a growth mindset,” said Jared Spataro, corporate vice president for Microsoft 365. “These decisions will impact everything from how you shape culture, to how you attract and retain talent, to how you can better foster collaboration and innovation.”
Considering Microsoft’s data from Teams, Outlook, and LinkedIn, their findings are pretty compelling:
- 73% of workers surveyed want flexible remote work options to continue.
- Remote job postings on LinkedIn increased more than five times during the pandemic.
- Over 40% of the global workforce is considering leaving their employer this year, and 46% are planning to move now that they can work remotely.
One of the findings from our discussions with finance leaders is a split in the way that senior managers view remote work versus younger workers.
For 20-something employees, working remotely during Covid was difficult: isolated and working in small living spaces, usually with roommates and little outdoor space. In conversations with younger workers, they repeatedly mention that they can’t wait to go back to the office.
Working at home has become an attractive alternative to long commutes and even longer workdays away from home for more mature workers with families and homes in the suburbs. As a result, managers have to re-think ways to engage younger employees and facilitate collaboration between remote and in-office teams, especially those SaaS companies with younger employees.
Beyond the generational and lifestyle issues raised by COVID-19, the world is becoming more and more integrated with in-person interactions, digital experiences, and workflows for everyone. SaaS companies are in the middle of this evolution, as innovators, vendors, and as users themselves of digital technologies. The fully digital workplace for remote workers requires new investments and management processes which are still evolving.
Microsoft defines five strategies for executives to meet these challenges:
- Create a plan to empower people for extreme flexibility.
- Invest in space and technology to bridge the physical and digital worlds.
- Combat digital exhaustion from the top.
- Prioritize rebuilding social capital and culture.
- Rethink the employee experience to compete for the best and most diverse talent.
The new working remote and hybrid models have implications far across the company, including real estate, facilities, and recruiting. Digital systems will need to help employees collaborate while working remotely and find solutions for HR to train far-flung employees. These working models will affect the norms for company P&Ls.
A meaningful way to help do the best planning for your company is to keep benchmarking against peers to see what is and isn’t changing. Then implement effective business solutions for the uncovered changes. It bears repeating that the choices and investments that companies make today will affect your company for years to come.
Our goal with these quarterly SaaS CFO surveys is to provide you with valuable operating insights and peer context to help you plan for the rest of the year. We encourage you to read the results we shared in Part One: Top Factors Impacting the SaaS Business Environment for 2021 and in Part Two – The Top Five Growth Initiatives for SaaS Investment in 2021 to fully understand the industry outlook as seen through the eyes of SaaS finance leaders.