When the pandemic hit in early 2020, it felt like the world of work had undergone a revolution, from which there was no going back. But more than one year on, workplaces are starting to buzz again and employers are preparing to expand their office spaces, rather than shrink them. So what’s changed and what role can credit management professionals and employers play in building back a better workplace?
Attending a roundtable event, chaired by the Chartered Institute of Credit Management (CICM), and hosted by accountancy firm, Menzies LLP, a diverse group of senior-level credit management professionals and Board-level executives gathered recently to share their experiences of re-engineering office culture at a time when restrictions are easing and life for some office-based workers is beginning to get back to normal.
To open the event, Sue Chapple, chief executive of the CICM, highlighted the plight of commercial property landlords, many of whom faced a wall of demands from tenants at the onset of the pandemic to downsize their portfolios and switch to more flexible terms. While this was undoubtedly a challenging time, the truth is that some landlords had started offering short-term leases and adapting their propositions to meet demands for greater flexibility, well before the pandemic. Commenting on how the commercial property market adapted, Ros Goode, managing director at Avison Young, said:
“Some employers took drastic action and reacted quickly by shrinking their property portfolios to allow for more remote working. However, some are now realising that they acted prematurely. Our conversations with businesses at the moment are centred on plans for growth and expansion and those businesses that retained most or all of their work space, now find themselves better placed and with more options when it comes to managing the return to the office.”
According to Ros, those commercial property landlords specialising in office space have fared well through the pandemic, as, in general, tenants have continued to generate revenues and rents have been paid. Those landlords with predominantly retail or hospitality & leisure assets have been less fortunate however, and some have been experiencing cashflow difficulties.
Sue Chapple added: “Credit management and business recovery professionals have been working closely with the worst-affected commercial property agents to support them in assessing the impact of the pandemic on their portfolios and find ways to protect their cash position. Some have been able to invoke ‘force majeure’ clauses in their insurance cover, which, along with the Government’s business support package, has helped them through the pandemic.”
How has the removal of most temporary insolvency protections impacted businesses?
The Government’s decision to phase out the temporary insolvency protections, with effect from the 1st October 2021, has pushed more employers to focus on getting workers back to the office as soon as possible. However, some new measures have been announced to provide ongoing protection for small businesses. Specifically, the debt threshold for a winding up petition will be raised to £10,000 to prevent creditors from enforcing relatively small debts. The new legislation will also require creditors to seek payment proposals from debtors, and to give debtors 21 days to respond before they can proceed with winding up action.
Simon Underwood, business recovery partner at Menzies LLP, said: “The removal of most of the temporary insolvency protections is a wake-up call to employers and a push to get trading back to some semblance of normal, and more quickly than some had imagined. With the economic activity rebounding, employers are no longer asking whether it is possible to get workers back to the office, but how best to manage their return and over what timescale.
“Those businesses that can provide great work spaces in prime locations that are energy-efficient and come with lifestyle benefits like bike racks, gyms, showers, coffee machines and outdoor terraces will have an advantage when it comes to retaining talented employees and attracting high quality candidates. For commercial property landlords, the outlook in terms of demand for quality office space is improving.”
Hybrid office models seems to be the favoured approach
There is no right or wrong when it comes to managing workers back to the office and, in many cases, employers are experimenting by creating a bespoke hybrid model that takes account of employees’ needs and preferences. For example, some employers are operating a 3/2 model; requiring workers to be in the office for three days each week. Others in London and some other city centre locations, have found that a 5/10 model works best, as this enables commuters to buy a weekly rail pass and work from home the following week. Looking further ahead, most people at the event felt that further change was likely from the start of next year, as employers seek to re-establish office-based working. In readiness for this, more in-person events are taking place and the option to attend virtually is not always included.
Several of the employers at the event were operating ‘work from anywhere’ policies and had introduced a hot desking app or other online system, allowing workers to pre-book a desk at the office as and when they wish. Teams are also encouraged to meet up regularly for training or team-building activities, and creative meetings are also more likely to take place face-to-face.
Alan Kemp, litigation and debt sale at Eon Energy, said: “Initially, off-site working was a challenge for our business due to the size of the workforce. However, now that we have the technology in place to facilitate remote working at all levels, we are finding that there is an upside. We are now able to recruit from a much larger employment pool, as there is no reason why we can’t hire a worker based in Leeds to work with a team based at the Essex office, for example. The quality of candidates has improved as a result. Coming into the office is still optional at present, although teams are encouraged to meet up for creativity or cultural reasons.”
offices can’t open quickly enough for some employees
For some employees, particularly young people and those working in metropolitan areas, employers noted that the return to the office can’t come quickly enough. Going to work, as opposed to working from home, has become a lifestyle choice for such workers as they look forward to meeting up with colleagues and value workplace comforts, such as free food and drinks, as well as the opportunity to socialise after work. Employers that are willing to fork out for a few treats and have invested in upgrading their office space to provide more lifestyle benefits and more break-out areas, where teams can meet up, have found it easier to entice workers back to the office.
For credit managers, much like their counterparts in other business functions, there have been many challenges while working from home. Some have needed to adapt their role in order to stay in touch with workers more frequently and in more structured way. The best managers recognised the importance of empathy and being willing and available to listen to workers’ personal and professional problems. John Kane, head of strategic relationships at the CICM, commented: “Over communication did become a problem for some teams, but better this than a lack of communication. Credit management professionals tend to be astute and pick up on verbal and non-verbal cues quickly, so coping with home working was less of a problem here than it might have been elsewhere. However, getting back to the office will help to relieve some of the pressure on managers.”
Summing up one of the key messages from the event, Karen Young, director at recruitment firm, Hays, added: “Employers can invest in creating a great workspace, but they must also focus on enabling human connections. This has always been important to creating the right culture and attracting and retaining the best people, but even more so after the pandemic.”
Everyone at the event shared the view that the pandemic has been a challenging time for employers and workers at all levels, mainly because of the lack of human contact that many people have experienced. Most agreed that a strong focus on creating a positive, inclusive and supportive office culture would be even more important in the future.
This report is based on a roundtable event for employers and credit management professionals, chaired by the CICM and hosted by accountancy firm, Menzies LLP.