Tag: impact

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14 Ways Remote Teams Can Impact A Company’s Financial (And Overall) Health

Around the world, the pandemic spurred a significant rise in remote work arrangements. Regardless of industry or business model, remote teams can have significant impacts—both positive and negative—on a company’s overall financial health. In some cases, remote teams require a company to buy new technology in order for employees to accomplish their work. On the other hand, many companies are saving significant amounts of money by not maintaining a physical office—and some are even seeing increased productivity.

As more companies are beginning to make the decision on whether to continue with remote work, head back to the office or settle on an arrangement that combines the two, it’s essential for leaders to carefully consider what’s right for their unique situation. Below, 14 members of Forbes Finance Council share ways your remote team may be impacting your company’s finances.

1. Increased Procrastination And Competition For Resources

I faced one of the negative effects of remote work: increased procrastination caused by a lack of communication. Additionally, there was a cost increase caused by remote market globalization—more and more businesses began going remote, so they started hiring employees globally. Before the pandemic, we had to compete for resources locally. Now we have to compete globally. – Peter Shubenok, RNDpoint

2. Potential Communications Breakdowns

A lack of communication can create headaches for remote teams. I have worked remotely since 2005, and I have found that increased communication is critical to meeting deadlines and avoiding misunderstandings. – Paul Davis, Strategic Resource Management

Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?

3. Higher Travel Costs

As we start coming back to work, remote teams will need to begin meeting up with their broader team at a central location every few months. This will mean that employees who rarely traveled, such as product managers and engineers, will be making four to six trips in a year that they didn’t before. Finance teams need to account for enabling these remote employees to spend time together, along with the associated costs. – Robin Gandhi, TripActions Liquid

4. The Need For A Robust Culture 

Working for a remote-first fintech, remote teams are quite literally the lifeblood of our organization. It can be easy to dismiss the concept of culture in remote teams, but when created, supported and pushed to thrive, culture can have a dramatic impact on the financial and overall success of an organization. Happy, engaged employees undisputedly do better work. – Michelle Prohaska, NYMBUS

5. Lower Overhead Costs

Remote work enables companies to remove traditional fixed overhead costs from their financials. Specific expenses, including rent, office supplies, utilities and salaries based on “handcuffed” geographies tied to a central office, can be reduced or eliminated from forward-looking plans. With these savings, management can invest more in R&D or employee learning to drive top-line growth. – John Tytko, Caremerge, Inc.

6. Reduced Need For Physical Expansions

We had considered expanding the physical footprint of our business regionally and nationally before Covid. Then everyone became more comfortable meeting virtually using services such as Zoom. Now, without leaving our office, we’re meeting with clients nationwide. So we’ve expanded our business not through remote teams as much as a remote business model—working with clients in other cities virtually. – Bill Keen, Keen Wealth Advisors

7. More Time Saved For Working And Expense Savings For Employees

Remote workers don’t need to spend money on commuting, eating out, dry cleaning, pet care and so on. On average, Americans spend almost one hour per day in total commute time. If employees capture 100{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of their “no-need-to-commute” expense savings but allocate 30 minutes more per day to working—splitting the time savings differential with their employer—they win, and their employers win. – Sean Brown, YCharts

8. Boosted Productivity

A hybrid model with some team members working remotely seems ideal. Less office space and resources are required, and studies have shown that working from home has boosted productivity in many ways. This is also a keen “perk” or benefit in today’s competitive recruiting landscape. Many would even take slightly less pay to be able to work from home. – Leslie Heimer, American Liberty Mortgage | Stockworth

9. Savings On Health Benefits

Offering benefits to a remote team, often scattered across the country, presents its share of unique financial challenges—but also potential savings opportunities. Extra vigilance is required when selecting and structuring benefit offerings. A high-deductible health plan paired with an employer-sponsored health savings account program can realize short- and long-term financial benefits for both the company and its employees. – Tom Torre, Bend Financial

10. Compromised Company Security

When employees are too relaxed about security compliance, it can put your entire company at risk for cyberthreats. To mitigate risk, invest in implementing automated phishing simulations and training videos and set up two-factor authentication. Educating remote teams on cybersecurity is crucial for keeping your company secure from costly threats. – Jody Grunden, Summit CPA Group

11. Access To Global Talent Pool

Remote teams empower companies to access the global talent pool at a fraction of the cost, which in turn drastically reduces recruitment costs—thereby directly impacting the bottom line of organizations that rely heavily on the brainpower of their workforce. – Anil Grandhi, AG FinTax

12. More Focus On Teamwork, Communication And Goals

Remote teams can get the business to focus on teamwork, communication and goals. There are software tools to help you monitor all areas of your business and track the output of employees. This higher level of business monitoring can help focus teams on profitability and customer-centric actions. Trusted employees may be more productive remotely with the time added to the workday and measured output. – Dave Sackett, Visibility Corporation

13. Lower Tax Liability

Among the positive financial aspects of remote teams are the cost savings that come from reduced office spaces and insurance. But other savings include not dishing out huge local payroll taxes in cities such as San Francisco and New York. Utilizing remote teams can also lead to savings for the employees, including the elimination of commuting expenses—plus, they’re not losing any time commuting, which adds to the company’s benefit. – Kurt Kunselman, AccountingSuite™

14. Better Client Engagement

Unlike the days when client meetings meant costly travel and time away for commuting, remote teams can reach clients more frequently for video or call check-ins. Technology such as Zoom meetings also allows you to keep more members of your team engaged. – Sonya Thadhani Mughal, Bailard, Inc.

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Omicron’s economic impact expected to be only small, analysts say

Economists generally expect the world economy to weather any fresh wave of coronavirus infections caused by the Omicron variant relatively easily, even if the latest version of the virus has clouded the economic outlook with uncertainty.

A central reason for their relatively optimistic initial assessment is the growing ability of economies to adapt to past Covid-19 restrictions, alongside the rollout of vaccine programmes.

Any new wave of the virus was therefore also unlikely to curb the rise in inflation, the economists said, although it would raise doubts among central bankers about the wisdom of tightening monetary policy early.

Lockdowns have become less severe with each wave of coronavirus

Among the large range of analysts who published notes and forecasts on Monday morning — be they from investment banks or consultancies — all stressed the uncertainty generated by the Omicron variant’s ability to evade existing vaccines, cause severe disease and spread faster than the Delta variant.

At the same time, though, few thought there was a need to rip up their current economic projections.

Paul Donovan, chief economist at UBS Global Wealth Management, said that travel and tourism might be hard-hit in some places, but this was generally quite a small part of overall economic activity. The Omicron variant was “unlikely to change the broader economic narrative at this stage”, he added.

Holger Schmieding, chief economist of Berenberg Bank, said: “From wave to wave, the economic damage has lessened.” He pointed to the contrast between the first and second European waves of Covid-19: while the first knocked 15 per cent off eurozone economic activity in the second quarter of 2020, general adaptation to living with the virus led to only a 0.7 per cent drop in gross domestic product in the more severe second wave in early 2021.

Furthermore, even if the Omicron variant has greater resistance to current vaccines, the prevailing view is that inoculation against it will help to reduce the economic impact.

Daniele Antonucci, chief economist at Quintet Private Bank, said: “The developed world can now count on high vaccination rates, has ramped up its capacity to develop and produce vaccines, and has shown it can adjust working patterns fairly flexibly and adapt more generally.”

Most economists believed that any slowdown in economic activity was also unlikely to curb the recent surge in inflation, particularly in goods where demand has outstripped global supplies that have been riven by disruptions.

Neil Shearing, chief economist of Capital Economics, said: “A virus-related surge in goods spending, or port closures, would exacerbate existing supply strains and add upward pressure to goods inflation.”

“It’s not clear it’s [the Omicron variant] disinflationary,” said Jordan Rochester, a foreign exchange strategist at Nomura in London.

While accepting there is huge uncertainty, Goldman Sachs economists produced four possible scenarios for any coming Omicron wave, including one that is a false alarm and the new variant proves no more infectious than Delta.

Its main downside scenario suggested there would be only a small economic hit from the virus in 2022, because the impact of each subsequent lockdown in the past had been weaker. These restrictions would lower global growth significantly in the first quarter, until new vaccines arrived and brought with them a robust recovery.

Over the year as a whole, Daan Struyven, senior global economist at Goldman Sachs, said global growth would drop from 4.6 per cent in 2022 to 4.2 per cent. However, there would be a corresponding increase in 2023 growth as recovery took hold again.

Goldman Sachs' central forecast is that an Omicron wave would hit economic activity at the start of 2022 before recovery took hold again

In its most severe downside scenario, disease severity and immunity against hospitalisations were substantially worse than that for the Delta variant. But, Struyven added, there was also a positive scenario in which the severity of infection was lower and the global economy could “normalise”.

The uncertainty is likely to encourage central banks, particularly at the Federal Reserve and the Bank of England, to stay their hand and wait a little longer before deciding whether to tighten monetary policy, either by slowing the tapering of asset purchases in the US or delaying interest rate rises in the UK.

In a note on Friday, Citi’s European economists wrote that the new uncertainty would be “a major alert” for central banks and that “the recovery path may not be as straightforward as originally thought”.