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Scope of this report and target audience
There is much variation in the degree to which the workforces of European businesses are distributed. Also the way their operations, employees and communications technologies are structured is undergoing constant change.
Traditionally, their infrastructure has been based around a network of buildings that house employees, but technology today allows a wider physical network of locations, including employees’ homes, customer premises and other 3rd party locations, to become electronically integrated.
The degree of distribution varies by industry, but it is not just a function of the business a particular organization is in; it is as much a function of how an individual business embraces the opportunity to be run more efficiently, serve customers better and attract good staff through being able to support a highly distributed ecosystem of employees and external workers.
This report looks at the degree to which businesses are distributed in the early 21st century, the reasons some are pushing this to its limits whilst others are holding back and, in both cases, where the benefits and pitfalls lie.
This report should be of interest to managers in any organization that has multiple locations and/or where at least some of its employees leave its premises on a regular basis to carry out their day-to-day tasks. As the research shows, this means pretty much any business.
The research behind this report was based on interviews with 315 business and technology managers across Europe’s largest economies, Germany, the UK and France. The research targeted organizations with one thousand or more employees.
Europe’s distributed workers
One of the greatest influences on change in the way businesses have been run in the last two decades has been the ability to support remote workers. The effect has been either to better enable employees who were already remote such as drivers, field service engineers and sales people, or to allow other employees to work more flexibly than they could before.
The ability to integrate remote individuals has also extended beyond employees to external workers, enabling better automation of communication with customers and suppliers but also allowing more tasks to be outsourced to specialist partners. However, the backbone to the majority of businesses is still a headquarters (HQ) with a branch network.
Fewer branches or more?
4.2% of the organizations contacted by Quocirca for this survey have just one location and were not interviewed.
All 315 that were interviewed had two or more locations; the average number of locations across this sample was 33 (Figure 1). Over 60% of the businesses interviewed had a HQ with a number of smaller branches (Figure 2). There was also significant variation between the different countries, with French and German businesses having an average of 36 locations, whilst for the UK it was just 27.4 (the full national figures are shown in Appendix A).
The average number of employees per location was 700, but given the differing sizes of HQs and branches this figure has little meaning except that it might be expected to decrease as remote working and outsourcing increases.
The number of employees in branches may also decrease because it has become more practical to manage workforces from afar. Many management functions, be they finance, technology or general, can be aggregated up to centralized staff, maintaining just a core of customer-facing staff in the branch itself.
There are different pressures in different industries that are likely to drive the number of branches up or down. Shoppers have to rely on a smaller number of increasingly larger retail organizations, so the number of stores per retailer is increasing. As banks interact with more and more customers online or by phone they have less need for branches in every town.
Change is likely to continue. Some predict that new pressures being imposed on employers in the form of carbon taxes, planning restrictions, parking charges and so on will change employment practices.
In the future it may make sense for businesses to have more numerous small locations near to centers of population to reduce commuting and be closer to customers. Businesses that do this will rely increasingly on electronic collaboration technology to keep employees in communication with each other.
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