Business

Remote, Back to Office, or Hybrid? 4 FP&A Challenges to Consider

Published

2 years ago

September 24, 2022

The ongoing shift in the workplace, which has been nurtured by our ability to work remotely and the flexibility that companies need in order to cope with the unpredictable, has forced companies to rethink how and where they want to work: fully remote, return to the office, or hybrid work. Deciding which model fits their team best is a key strategic move, and it’s one that financial planning and analysis (FP&A) teams will have a crucial say in. There are, however, four important challenges that FP&A teams will need to tackle in order to provide the best support for their organizations. Let’s discuss them.

1. Understanding the shifts of a dynamic workplace

FP&As need to go beyond the numbers of their financial statements. In fact, they need to understand the trends that are shaping today’s workplace and the hurdles that a company may face if it opts to return to the office or go fully remote. In order to improve financial planning and deliver better insights, it is important for finance professionals to understand the implications associated with each option and the trends that are shaping the corporate world.

Based on data from various surveys, Nikodem Szumilo, Associate Professor at University College of London, and Thomas Wiegelmann, managing director of Schroder Real Estate, argue that there’s enough evidence that “most office workers actually want to go back to an office — but only two or three days per a week.” This kind of information should be taken into consideration by FP&As when measuring and forecasting things like productivity and retention rates.

Finance teams must understand the complexity that the various options in today’s workplace offer, as well as the fact that an option that suits employees best might not do the same for management. Finance can play a key role in making sure that both parties are happy, while also moving the company in a strategic direction.

Let’s look at this example: Many managers are eagerly looking forward to bringing employees back to the office to be able to physically keep tabs on their work progress. But if employees are rooting for a remote (or hybrid setup), it can be financed by a job to bring up tools like a project time tracker. Not only does this help managers have a better handle on their team’s work, but it also provides useful insight into business operations, finance, and daily decision-making.

2. Adopting a more strategic role

The modern finance department is rapidly moving from a transactional thinking approach to a strategic one. “The new operating model of finance recognizes the subject matter expertise of FP&A and its focus on delivering the best data for business decision-making,” explains Anders Liu-Lindberg, leading advisor to senior Finance and FP&A leaders.

Being able to meet that role will certainly be a challenge for many FP&A teams that are still solely focused on the transactional side of their business. Even if managing the cash flow is still an essential part of their job, finance professionals need to update their role within the organization. “The traditional roles of transaction processing and reporting remain, of course, but in an automated form that releases resources to explore value drivers in the business and move the focus to plan with an uninterrupted forward-looking view. FP&A is at the very heart of business decision-making,” argues Liu-Lindberg.

In terms of financial forecasting and financial planning, for example, FP&As should encourage their companies to truly understand where and how their employees would like to work. If they are able to gather and analyze such information, they will be able to better predict the amount of capital the company will need to invest in certain areas.

“If your organization is enforcing a strict back to the office mandate, you’ll likely need to plan for additional recruitment fees and training, as well as allowing for dips in productivity as you replace the people who inevitably resign,” argues Kevin Phillips, Founder, and CEO of idu Software. Considering this, if you are able to collect information about your employees’ working preferences, you will be able to forecast much more precisely.

3. Quantifying the impact of all the scenarios

Whether you are going fully remote, opting for a hybrid workplace, or going back to the office, this is one of the biggest challenges that FP&A teams need to face. In fact, in any of these scenarios, there are considerations to make from the financial point of view. According to Phillips, the following are the three things FP&A teams need to consider when quantifying the impact of each option:

Let’s review some of the practical costs that companies need to consider when opting for any of the three scenarios above.

Working from home 100%

If you decide that you and your employees are going to be working from home on a regular basis, “you need to account for mortgage and lease liabilities. What will it cost to get out from under a long lease agreement or to sell commercial real estate?” asks Janet Schijns, CEO of JS Group. Considering the crucial role that rent plays in any budget strategy, this is an important consideration to make.

Apart from lease liabilities, any financial planning needs to evaluate the remote setup costs that your employees may need. For those with a high-speed Internet connection, good hardware, and comfortable working space, things may be simple. However, for some other people, the remote setup costs could be steeper.

In fact, for “a telehealth provider or call center agent, you may need to cover VPN access, HIPAA-certified unified communications and collaboration licenses, secure cloud storage, improved broadband access, remote tech support, cyber insurance that covers risks associated with remote access and in some cases mobile devices and plans,” explains Schijns. On top of that, you may even need to reimburse some of your remote employees for the expense associated with their work.

However, going 100% remote work also offers some cost-saving benefits. Apart from not having to pay rent for a big office, the possibility of bringing remote hires into your team represents a good opportunity for saving money. “You can now hire top talent from anywhere in the world and pay them more than what they would earn locally, but less than what you’d have to pay at home. This is a win-win situation, especially for your salary costs,” argues Phillips.

Along those lines, FP&A teams must treat all the technological investment and organizational changes their companies adopted during the pandemic as an investment that favors the remote work option. The biggest cost of switching to remote or blended work is the cost of adapting to the new technology has already been paid. Nobody should commit to long-term remote work because they want to recover the sunk cost of moving online due to the pandemic. However, the pandemic irreversibly reduced the cost of switching to remote work and made this choice cheaper,” argueSzumilo and Wiegelmann.

Return to office

As we mentioned before, if you want everybody to go back to the office, your financial planning needs to consider the potential of facing resignations from employees who don’t want to lose the flexibility they gained during the pandemic. This will have an impact in terms of recruiting fees, training costs, and the additional perks you may need to offer if you want to persuade your top performers to stick with you.

Furthermore, any budget strategy designed around the option of going back to the office needs to bring into consideration some sort of investment in perks capable of compensating for the loss of flexibility and additional costs (e.g. commute, gas, lunches) that employees will need to pay when returning to the office.

Some companies are, indeed, already offering practical solutions to their employees. For instance, Bloomberg is giving its US employees a $75 daily commuting stipend while PwC in the UK is offering an extra £1,000 for commuters. “But these perks and stipends certainly don’t extend to all companies–meaning people are not only being asked to give up remote work but also spend more to do it,” argues writer Sophia Epstein.

The costs associated with healthy environments, however, are an element that should play an important role in the financial planning of any organization, and FP&As will play an important role in guiding companies in making the right investments. “More robust air filtration and newly installed outdoor spaces are among the items that will add to developers’ costs when more employees return. New cleaning practices may make those services more expensive, and landlords are offering new amenities to lure tenants back,” explains writer Julie Weed.

Providing this kind of guidance, however, can be a big challenge for FP&A teams that need to deal with top executives unwilling to incur those kinds of expenses. To tackle this, FP&A professionals need to quantify the potential effects of not implementing some of the needed structural changes. As stated by Nellie Brown, a health and safety specialist who provides training and technical assistance for New York State workplaces, “if you don’t spend money on upgrading your ventilation, you might be spending it on sick people.”

Hybrid workplace

Considering everything we mentioned about the two previous scenarios, it is easy to understand why a hybrid workplace has been embraced as the ideal to move forward by so many organizations around the world. While this model partly combines the disadvantages of the other two options, it fully combines the best of both worlds. For instance, with a hybrid work model, you will be able to improve your retention rate while saving costs on office space.

From the financial point of view, the reduction of office space is, in fact, one of the most attractive elements of a hybrid workplace. In fact, there is a broad consensus among CEOs that organizations will need less office space in the future. “This could drive significant cost savings in both operating costs and capital expenditures,” argue Deloitte managers James Griffin and David Asker.

In spite of these benefits, finance teams should carefully assess all the pros and cons that come with this model. In order to do that, FP&As will need to analyze the data accurately, and this could be a significant challenge for organizations that are still relying on spreadsheets and lack automation and data collection tools.

4. Making a strong business case

Right now, the business case that CEOs and top managers are using to justify the return to the office gravitates around two variables: productivity and management. The rationale is that some employees are more productive when they work in the office. Plus, many leaders think having everybody at the office allows managers to monitor the performance of those employees more effectively.

The problem with this rationale is that there’s little evidence that supports such claims. In fact, there are numerous surveys that claim just the opposite. Because of this, one of the most important emerging challenges faced by the finance controller today relies on its ability to provide guidance in regard to the business case that a company uses to justify the return to the office.

If you want to make your case in terms of productivity and management, you need numbers that support those arguments and this is where an FP&A team needs to provide support. However, coming out with those numbers may be difficult especially if productivity has been sustained during the health crisis.

An opportunity to update your company

Not all FP&A teams will need to deal with the challenges we mentioned above. For some companies, the decision to bring their employees back to the office has been already made with hardly any single financial consideration other than a space cost-saving strategy. In a world where so many people are scared to death to lose their jobs and so many managers need physical control to legitimize their roles, companies have found little to no resistance when ordering people to go back to the office.

However, companies that are truly interested in improving their KPIs, building a healthy corporate culture, and saving costs through a well-defined budget strategy and financial planning, need FP&A teams that are strategic and able to quantify (with the right tools) all the possible options to move forward. By doing that, they will not only provide valuable insights into the organization, but they’ll also reinforce the business case that companies need to persuade employees to do their best. Meeting the challenges we mentioned throughout this article represents a great opportunity to update and prepare your company for the future.

Related Topics:Business Featured FP&A Challenges

Business

How to Start an IT Company in The UK

Published

3 weeks ago

January 1, 2025

Daniel Egusa

The IT industry in the UK is one of the country’s largest and most dynamic sectors. It is a constantly evolving and growing sector, with new technologies and innovations always emerging.

Overview of the IT Industry in the UK

The IT industry in the UK is diverse and covers a wide range of sectors, including software development, hardware manufacturing, and IT services. Despite the pandemic, it is also one of the fastest-growing sectors in the UK economy.

One of the key strengths of the IT industry in the UK is its focus on innovation. The country has a strong history of developing new technologies and continues to be at the forefront of innovation in areas such as artificial intelligence (AI), cybersecurity, and fintech. The UK also has a thriving startup scene, with many new IT companies established yearly.

Starting an IT company in the UK can be exciting and challenging. This blog will outline the process for starting an IT company in the UK.

Step By Step to Start an IT Company in the United Kingdom

Starting an IT company in the UK requires careful planning and preparation. By following these steps, you can ensure that you have everything in place to launch your business successfully. Remember to stay up to date with changes in the market and regulatory environment, and be prepared to adapt your business as needed. You can build a successful IT company in the UK with hard work and dedication.

Define your business idea

Before starting any business, it is essential to have a clear understanding of your business idea. Ask yourself what services or products you will offer, who your target audience is, and how you will differentiate yourself from your competitors. Once you have a clear idea, you can develop a business plan.

Develop a business plan

A business plan is a written document that outlines your business idea, market research, marketing strategy, financial projections, and other key information about your company. It will help you to organize your thoughts and ideas and provide a roadmap for your business.

Conduct market research

Market research is crucial for any business, as it will help you to understand your target audience, competition, and industry trends. You can use various methods to conduct market research, including online surveys, focus groups, and industry reports.

Choose a business structure

In the UK, several business structures exist, including partnership, sole trader, limited liability partnership (LLP), partnership, and limited company. Each has its benefits and drawbacks, so it is essential to research and choose the structure that best suits your business needs.

Register your business

Once you have decided on your business structure, register your company with Companies House. This is the government agency responsible for maintaining the public register of UK companies. You must provide details such as your company name, registered office address, and the names of directors and shareholders.

Obtain necessary licenses and permits

On the basis of the nature of your business, you may also require to obtain permits and licenses from local and national authorities. For example, if you plan to handle sensitive data, you may need to obtain a data protection license from the Information Commissioner’s Office (ICO).

Set up a business bank account

Setting up a separate business bank account is essential to keep your business finances separate from your personal finances. This will make tracking your expenses, receiving payments, and paying taxes easier.

Hire employees

If you plan to hire employees, you must register as an employer with HM Revenue & Customs (HMRC). You will also need to provide your employees with a contract of employment and ensure that you comply with employment laws and regulations.

Obtain business insurance

Business insurance is essential to protect your company against theft, property damage, and liability claims. Depending on the nature of your business, you may need to obtain different types of insurance.

Set up an accounting system.

Finally, setting up an accounting system to manage your finances is essential. This will help you to track your income and expenses, prepare financial statements, and file taxes. You can choose to do this yourself or hire an accountant or bookkeeper to help you.

Conclusion

The IT industry in the UK is a diverse and dynamic sector that is constantly evolving. It covers a wide range of products and services, and it is one of the fastest-growing sectors in the UK economy. While the sector faces several challenges, there are also many opportunities for growth and innovation. With the right skills and expertise, UK IT companies are well-positioned to compete on a global stage and drive the future of technology.

Business

How to Apply for the UK Skilled Worker Visa as an International Professional

Published

1 month ago

December 20, 2024

William Watson

Apply for the UK Skilled Worker Visa as an International Professional

The United Kingdom is a popular place for skilled people from all over the world because of its great history, culture, and strong economy. A big reason for this is the UK Skilled Worker Visa. This visa shows that the UK wants to bring in skilled people from everywhere. It’s a key part of the UK’s system to let people in based on points.

This visa does two main things: it lets skilled people from other countries come and work in the UK, and it also helps the UK by adding more skills to its job market. So, it’s good for both the people coming in and for the UK.

The UK Skilled Worker Visa provides an opportunity for professionals from around the globe to live and work in the UK. It’s part of the UK’s points-based immigration system, offering an accessible route for talented individuals to contribute to the British economy and society. If you’re an international professional considering relocating to the UK,

If you want to apply for the UK Skilled Worker Visa as an international professional, it’s important to know the process well. It’s not easy, and you need to be careful when applying. So, if you’re thinking about moving to the UK for work, make sure you understand how to apply for the UK Skilled Worker Visa as an international professional properly. This will give you the best chance to live and work in the UK.

Steps To Apply for the UK Skilled Worker Visa as an International Professional

1. Determine Your Eligibility

Before you start, ensure you meet the following criteria:

A valid job offer from a UK employer.
The job offer must be at a required skill level – RQF3 (A-level) or above.
Proof of English language proficiency.
A minimum salary threshold is set by the UK government, which varies by occupation.

2. Collect Necessary Documentation

A Certificate of Sponsorship (CoS) from your UK employer.
Proof of English language proficiency, which can be from an English language test result or an academic qualification taught in English.
Bank statements or payslips show you can support yourself.
Travel history and a valid passport.
Criminal record certificates from countries where you’ve lived for 12 months or more in the past ten years if required.

3. Applying Online for the UK Skilled Worker Visa:

Want to work in the UK? Start by applying online. Go to the UK government’s official website to begin. There, you’ll find a simple form to fill out. Make sure you have all your documents ready to upload. After filling in your details, you’ll be asked to pay an application fee.

The usual cost is between £719 and £1,500, but it can change based on your situation. Remember, this fee might also vary depending on how long your job in the UK will be and where you’re applying from. Double-check everything to make sure it’s all correct. Once done, you’ve taken your first big step to work in the UK.

4. Submitting Your Biometric Information

After successfully completing the online visa application, an essential next step awaits you: the biometric information submission. This process is more than just a formal requirement; it’s a security measure ensuring the authenticity of each applicant.

To facilitate this, you’ll be required to schedule an appointment at a designated visa application center within your residing country. During this visit, professionals will collect vital biometric details, including your fingerprints and a recent photograph. It’s advisable to be punctual for this appointment and bring any requested documentation to ensure a smooth process.

5. Paying the Health Surcharge

A crucial aspect of relocating to the UK is ensuring you have adequate health coverage. This is where the health surcharge comes into play. Most visa applicants will encounter this fee, which is designed to provide them with access to the UK’s renowned National Health Service (NHS).

By paying this surcharge, you’re not only fulfilling a visa requirement but also securing your health welfare during your stay. The NHS offers a range of medical services, and this payment ensures you can avail of them without any hindrances, allowing you to focus on your professional journey in the UK with peace of mind. The Health Surcharge fee is £624 per year.

6. The Waiting Phase for Visa Decision

Once you’ve dotted the i’s and crossed the t’s of your application, the waiting period begins. This interval, often filled with anticipation, sees your application undergo meticulous processing by the UK immigration authorities.

While it may seem lengthy, decisions for applications originating from outside the UK are generally relayed within three weeks. It’s important to be patient during this period and refrain from sending repeated queries, as it ensures that the authorities can work efficiently to assess your application’s merits.

7. Securing Your Biometric Residence Permit:

Congratulations on your approval! This monumental step is signified by the placement of a 30-day vignette (a form of sticker) within your passport. But there’s an immediate action required on your part. As soon as you step foot in the UK, a clock starts ticking. You have a window of ten days to collect your Biometric Residence Permit.

This isn’t just an administrative formality; the permit serves as an official validation of your immigration status and is integral for various aspects of your life in the UK, from employment verification to potential housing contracts.

8. Staying Informed with Constant Vigilance

The landscape of UK immigration isn’t static; it’s an ever-evolving domain. As such, the onus falls on visa holders and applicants to stay abreast of potential changes. The most authoritative source of this information is the official UK government website, which provides timely updates on any shifts in policy or procedures.

For those who desire an added layer of assurance, engaging with immigration specialists can prove invaluable. These experts monitor changes, offer insights, and can provide guidance tailored to individual circumstances. In the dynamic world of immigration, staying informed is not just advisable; it’s imperative.

Conclusion

the UK Skilled Worker Visa stands as a remarkable opportunity for international professionals aiming to expand their horizons and contribute to one of the world’s most dynamic economies. The process, while detailed, is a testament to the UK’s commitment to ensuring a diverse and talented workforce.

By meeting the criteria and navigating the application process diligently, aspirants unlock a realm of professional growth and experiences in a country rich in history, culture, and opportunities. For any international professional, securing this visa is not just about working in the UK; it’s about embracing a journey of learning, innovation, and global collaboration.

FAQs

1. What is the UK Skilled Worker Visa?

The UK Skilled Worker Visa is a route designed for non-UK residents who possess professional skills and have secured a job offer in the UK. It is part of the UK’s points-based immigration system and allows qualified individuals to live and work in the UK for a specified duration.

2. Who is eligible to apply for the Skilled Worker Visa?

Eligibility is primarily based on having a valid job offer from a licensed UK employer, meeting a salary threshold specific to the job, demonstrating the required skill level (typically RQF3 or above), and proving proficiency in the English language.

3. How long can I stay in the UK on a Skilled Worker Visa?

The visa’s duration usually aligns with the length of your job contract. Most visas are valid for up to 5 years but can be shorter depending on the employment duration. After this period, visa holders might be eligible for an extension or even apply for indefinite leave to remain.

4. Is there an age limit to apply for this visa?

While there’s no strict age limit, the visa is tailored for working professionals. Hence, applicants should be of working age, have relevant qualifications, and have a genuine job offer from a UK employer.

5. What documents are required during the application process?

Applicants typically need to present a current passport, the Certificate of Sponsorship (proof of job offer), evidence of English language proficiency (e.g., IELTS test results), and sometimes proof of financial means or professional qualifications, depending on the job.

6. How much does the Skilled Worker Visa application cost?

The application fee generally ranges between £719 and £1,500, but this can vary based on individual circumstances, application location, and the visa’s duration. Additionally, other costs like the health surcharge might apply.

7. Can my family accompany me if I secure a Skilled Worker Visa?

Yes, immediate family members, including spouses, partners, and children under 18, can apply as dependents. They will need to provide relevant documents and may also need to pay healthcare surcharges.

8. What happens if my job ends while I’m on a Skilled Worker Visa?

If employment ends, visa holders usually have a 60-day grace period to find another eligible job or apply for a different visa category. Failure to secure another position or visa might necessitate leaving the UK.

9. Can I switch jobs while on a Skilled Worker Visa?

Switching jobs is permissible, but the new role must also satisfy the Skilled Worker Visa criteria. A new Certificate of Sponsorship from the new employer will be necessary, and you might need to apply for a new visa.

10. How can I stay updated on changes to the UK Skilled Worker Visa policies?

The UK’s immigration rules can change, so it’s crucial to monitor the official UK government website for updates. Alternatively, consulting with immigration specialists or legal professionals can help you remain informed.

Business

How to Register Your Business in The UK: A Comprehensive Guide

Published

1 month ago

December 13, 2024

Daniel Egusa

Are you looking to start a business in the UK? If so, you’ll need to know how to register your business. This comprehensive guide will walk you through the process step-by-step. We’ll cover everything from registering with HMRC to obtaining an Employer Identification Number (EIN). So whether you’re just starting out or you’re ready to take your business to the next level, this guide has got you covered! To register your business in the UK, you’ll need to follow these steps:

Tips to Register Your Business in The United Kingdom

Register with HMRC

HMRC is responsible for the collection of taxes and the enforcement of tax laws in the UK. When you register with HMRC, you’ll be assigned a unique Tax Identification Number (TIN). This number will be used on all of your business paperwork and filings. You can register with HMRC online or by mail. To register online, visit the HMRC website and click “Register for Self-Assessment.” You’ll need to provide some basic information about your business, including its name, address, and contact information. Once your registration is complete, you’ll receive an activation code via email which you’ll need to enter on the HMRC website. To register by mail, download and complete the HMRC Business Registration Form (form SA100). Mail the completed form to the address listed on the form.

Obtain an Employer Identification Number (EIN)

An EIN is a unique nine-digit number issued by the IRS that identifies your business for tax purposes. You’ll need an EIN if you hire employees or have other taxable business activity. You can apply for an EIN online or by mail. To apply online, visit the IRS website and click “Apply for an Employer Identification Number.” You’ll need to provide some basic information about your business, including its name, address, and contact information. Once your application is complete, you’ll receive an EIN via email. To apply by mail, download and complete the IRS Form SS- Employer Identification Number Application (form SS-16). Mail the completed form to the address listed on the form.

Register with Companies House

Companies House is a government agency that registers companies and provides information about them to the public. When you register with Companies House, you’ll be assigned a unique Company Registration Number (CRN). You’ll need this number to file annual reports, register company officers, and more. You can register with Companies House online or by mail. To register online, visit the Companies House website and click “Register a New Company.” You’ll need to provide some basic information about your business, including its name, address, and contact information. Once your registration is complete, you’ll receive a confirmation email. To register by mail, download and complete the Companies House Registration Form (form CO01). Mail the completed form to the address listed on the form.

Register for VAT

If your business in the UK has an annual turnover of more than £85,000, you’ll need to register for Value-Added Tax (VAT). VAT is a tax charged on goods and services purchased in the UK. When you register for VAT, you’ll be assigned a unique VAT number. You can apply for a VAT number online or by mail. To apply online, visit the HMRC website and click “Register for VAT.” You’ll need to provide some basic information about your business, including its name, address, and contact information. Once your application is complete, you’ll receive a confirmation email. To apply by mail, download and complete the HMRC VAT Registration Form (form VAT-REG). Mail the completed form to the address listed on the form.

Set Up a Business Bank Account

To run your business in the UK, you’ll need a bank account specifically for your business. When you’re ready to open a business bank account, be sure to compare rates and fees from different banks. You can find more information about opening a bank account for businesses here. Once you’ve registered your business with the necessary government agencies and set up a business bank account, you’re ready to start doing business in the UK!

Thank you for reading this comprehensive guide on how to register your business in the UK. We hope you find it helpful! If you have any questions, please don’t hesitate to contact us.