In response to abrupt and often severe economic disruptions due to COVID-19, many companies have made huge investments in technological infrastructure to deliver goods and services quickly and efficiently. Many have had to change their business models in the process. Much of this had been on the horizon, but certain technological changes have come far earlier than expected.
The rise of working from home (WFH) across many sectors poses two particularly important issues: how to evaluate staff in a virtual environment and—as in-person gatherings become safe again—how to apply a hybrid office model.
Staff Performance Evaluation in a Virtual Environment
WFH has become routine since widespread public health restrictions took effect in the spring of 2020. But with the new year and the beginning of the traditional period for year-end staff performance evaluations, most companies are only now, for the first time, undertaking these evaluations in a virtual environment.
Staff performance evaluations are essential to assess contribution to the firm, motivate staff, promote recognition and improve communication. As laid out in the Guide to Practice Management for Small- and Medium-Sized Practices (SMPs), the principles behind staff performance evaluations might not need to change in a virtual environment, but their application will look different. For example: job descriptions that fit before the pandemic might not correspond to actual roles that have developed under WFH. As working conditions changed, firms might not have outlined clearly for staff how performance evaluations would evolve with these larger changes.
How Can SMPs Be Prepared?
In a recent IFAC Small- and Medium-Sized Practices Advisory Group (SMPAG) session, members suggested the following approaches when asked how they would deal with staff management and performance evaluation in a virtual environment:
- Mutual trust is a must. Management needs to feel confident that staff are benefiting from WFH policies without abusing them, and staff need to feel that management is fairly and transparently assigning workloads, supervising staff, and setting metrics for staff performance. Frequent and detailed communication between management and staff about progress on certain tasks can help build this trust. For example, a staff member can send a brief report to his or her manager everyday on any progress and any remaining tasks.
- A virtual work environment can translate well to quantitative performance evaluation. The digital record of an employee’s time on the clock, for example, is a useful metric for billable hours and productivity—and a decent substitute for measuring hours at a brick-and-mortar office. Deliverables are another less direct, but still useful, quantitative metric.
- Management can turn to prevailing practice management tools not only to support the evaluation process, but also to help staff to manage their time productively so they can focus on the substantial, rather than the administrative, aspects of assignments. For example, using the native features of many practice management software will allow staff to see the status of their follow-up requests to clients and send timely reminders without active prompting.
- Whenever external events disrupt business operations, management and staff need to agree at the onset (or as soon as practicable) to revised performance indicators; the year-end evaluation will be more challenging if management and staff do not have a mutual understanding of expectations and evaluation. (As with any skill set, managers may need to be trained if they are to do this well.)
- Frequent, open, two-way communication between management and staff about the performance evaluation process itself is critical. A strong evaluation process will be the product of ongoing communication—not last-minute adjustments.
- Staff deserve recognition for their achievements in a virtual environment; the company’s successful adaptation to WFH is, essentially, their staff’s adaptation. Some firms offer a “Cause for Applause”: feedback from colleagues not necessarily from the same line of reporting that, when an employee goes above and beyond his or her responsibility, reaches the person responsible for evaluating that employee’s performance. It is a cause for the firm, as a whole, to celebrate the staff’s effort.
The Hybrid Office
Google’s CEO Sundar Pichai said recently that the future of work involves a “hybrid model.” He offered Google as an example: the company is reconfiguring its workplace for the majority of Google employees to work from home most of the time and occasionally meet in-person at an office. He said, “We firmly believe that in-person, being together, having that sense of community, is super important for whenever you have to solve hard problems, you have to create something new. So we don't see that changing; we don't think the future is just 100% remote but rather a seamless hybrid model of how people would like to work”.
Hybrid Office – The Consequences for the Profession
As with other trends in technology in the workplace, companies will thoroughly understand the benefits and challenges of a hybrid office model only after it has become a common practice. But the profession—and SMPs, especially—can see many things coming:
- Because companies with a hybrid office will need less physical space—or the same amount of space less often—they can find savings on rent. Forming satellite offices (i.e., small, dispersed offices that reach outside a city center) can provide flexibility to staff. In addition, a robust management system to monitor the availability of space at any given time (managed capacity) will reduce the hassle of booking spaces in advance for teams sitting together in a hot-desking environment.
- New office arrangements might affect staff compensation packages. For example, companies might reconsider offering transit benefits that far exceed the frequency with which an employee will commute to a hybrid office. Other incentives might make more sense, such as free catered meals for staff on their days in the office.
- Building a positive firm culture may be difficult in a hybrid office environment. There will be a need for more regular team communications and potentially more training on interpersonal skills. Leadership will need to consider specific initiatives to ensure appropriate coordination and collaboration exist, possibly through using IT platforms. Many SMPAG members think the hybrid office model is here to stay. Some members have either migrated to this model already or have seriously considered doing so in 2021. The SMPAG has found a hybrid office to be suitable for nearly all services rendered by accounting firms, with the possible exception of those involving confidential information, such as payroll services.
Hot-desking—the system of multiple workers using a single physical work station during different time periods—is an attractive option in a hybrid office environment, but there are some concerns about less privacy among staff, especially for certain service lines, such as forensic audit. Giving staff lockers in which to store sensitive information, along with the use of relatively small conversation booths or meeting rooms when discussing confidential matters with clients, are feasible solutions.
In a hot-desking environment, hygiene is always an issue. Additional cleaning costs will be incurred to maintain proper hygiene of common equipment and furniture. Companies might need to spend more on the maintenance of equipment in common areas. Various legislation on the permissible density for safe social distancing in offices and constant changes to such regulation will need to be regularly monitored and managed by the firm leadership.
Staff performance evaluation in a virtual environment and the use of the hybrid office model are likely to be with the profession for the long-term. All firms need to prioritize the health and safety of employees, facilitate virtual operations and support staff’s flexible working. Embracing change is one of four key areas for firms of the future covered in IFAC’s Practice Transformation Action Plan. With flexibility, WFH can be a smart strategy to attract and retain quality staff while the adoption of a hybrid office model may result in less need for expensive office space in a central business district.