Kathryn Vassilissin, Sales Manager, Vendor Finance, Siemens Financial Services UK
Judging by the views of employees and HR teams, hybrid working is here to stay – or should be. Almost eight in ten workers (79%) say flexible working locations are an important factor in their job[i], and seven out of ten organisations that offer home / hybrid working say it allows them to attract and retain more talent[ii].
For Facilities Management teams (FM), this enthusiasm for hybrid raises some knotty questions. How can they best fit offices with the high-functioning environments and technology to accommodate how businesses want to work when the need for those facilities fluctuates so steeply? And how can they invest in this when faced with inflationary pressures and a reluctance to commit valuable capital? Creative solutions are needed.
Flexing to the needs of hybrid work
Despite regular reports of companies issuing Return-To-Office mandates[iii], the number of people hybrid-working continues to rise, with 64% of business leaders saying their workplace has adopted a hybrid model[iv]. This prompts some to question facilities managers along the lines of, ‘If occupancy of [the] workplace has dropped 50%, shouldn’t FM costs fall by a similar amount?’[v]
FM teams will know it’s more complicated than that, especially when occupancy may range from below 10% on a Friday to 70% midweek[vi]. FM provision must be seamlessly scalable to cater for this, cost-effectively meeting the needs of the hybrid workforce (as well as remote and on-site teams) regardless of where and when they are working. This should involve looking at every aspect of the workplace, and the technology and facilities provided there.
Going beyond connectivity
The finance sector may long ago have evolved connectivity and cybersecurity management to reflect hybrid working practices, given that both are so core to the sector’s operations. However, there are a raft of other FM and technology issues to consider, all of which come with capital investment requirements.
A simple example is catering services. Pre-pandemic, facilities managers may have offered staffed catering facilities, while mid-pandemic they may not have offered any. Now, with hybrid working likely to stick around, a third way is needed. Rather than operate an underused staffed service, what about switching to self-service catering, including hot or chilled meals, via a vending minimarket? These seemingly little things can have a positive impact on staff attitudes about working in the office.
There are multiple other decisions to be made too, from how to manage reception facilities, to how to flex temperature and lighting controls to reflect fluctuating occupancy levels and also cut energy costs and emissions. All these decisions could be informed by smart technology that registers when and how people use the office.
Surmountable obstacles
Implementing these smart facilities comes with an unwelcome financial burden at a time of inflationary pressures. With rising staff and operational costs already exerting pressure on businesses, the need to invest in new hybrid-friendly assets represents a significant financial challenge – even if in the medium and longer term it could reduce operating costs.
In addition, businesses and their FM suppliers may hesitate to invest capital in depreciating equipment or facilities upgrades if geopolitics continues to create volatility in financial markets. This is where specialist finance can move the dial, helping to overcome financial and confidence obstacles.
For any business reluctant to tie up cash in the current inflationary environment, leasing arrangements can be a highly attractive and efficient alternative to capital investment. Rather than using cash or loan finance to cover upfront costs, the cost of investment is spread over an agreed period, with payments aligned to match cashflow. Capital and cashflow are retained for liquidity or for investment in other parts of the business, and there can be tax advantages too.
A choice of finance options
Another attraction of specialist leasing arrangements is the option to finance office technology and equipment under a single holistic agreement, in a more favourable deal than using stand-alone finance arrangements for different assets.
Specialist finance partners in this space, such as Siemens Financial Services, can fund a wide range of assets in a single package, bringing together their expertise and deep understanding of workplace technology and the evolving needs of hybrid offices. Such a package could cover a multitude of elements including door entry systems and 24-hour security, catering machines, hardware / software, connectivity, and smart heating, ventilation and air condition (HVAC) systems.
Adding further flexibility, these financing packages can take various forms, from basic leasing and hire purchase agreements to master leases with an agreed line of credit – allowing for the rapid acquisition of significant volumes of equipment without the need for paperwork for each asset. Another option is a managed service agreement, where the costs of the equipment, delivery, installation and maintenance are all provided for a fixed monthly cost, and the uptime and capabilities of an agreed service level are all guaranteed.
A dilemma that must – and can – be solved
When hybrid and flexible working are clearly so important to workers in 2025, the finance and FM sectors face an imperative to cater for this – not just in their hiring and HR practices but in managing their workplaces. Smart workplaces and technology that flexes to fluctuating occupancy are increasingly becoming a must-have, even if this investment presents a dilemma for businesses grappling with inflationary and cost pressures. By embracing specialist finance solutions that spread the cost and protect capital, facilities managers have an answer to their dilemma.
[i] https://owllabs.co.uk/state-of-hybrid-work/2024
[ii] https://www.cipd.org/globalassets/media/knowledge/knowledge-hub/reports/2024-pdfs/8662-resource-and-talent-planning-2024-report-web.pdf
[iii] https://sloanreview.mit.edu/article/five-hybrid-work-trends-to-watch-in-2025/
[iv] https://news.zoom.us/zoom-survey-reveals-hybrid-work-reigns-supreme-and-delivers-unexpected-value-to-global-organizations/
[v] https://www.colliers.com/en-xe/research/cre2-leveraging-digital-facilities-management-to-drive-workplace-experience
[vi] https://www.colliers.com/en-xe/research/cre2-leveraging-digital-facilities-management-to-drive-workplace-experience
