PSA To Deploy Systematically Work at Home Policy
PSA Will Make Work at Home its Default Option
In a recent article, French business paper Les Echos, highlighted how PSA is adopting Work at Home (WaH).
The company wants to make WaH as the option by default for 80,000 of its 200,000 employees. It targets employees working in its headquarters and offices, including sales & marketing, services, and R&D.
During the crisis, PSA more than doubled the number of employees working at home from 18,000 concurrent connections to its IT to 38,000. The company points to the positive impact of WaH for its carbon emissions, employee well-being, and cost reductions. In the mid-term, PSA wants to reduce its real estate presence.
Savings Will be Significant
PSA believes that its employees will still go to the office, 1.5 days a week. The company will during the May-June period adapt its WaH plans for each employee role and identify required IT investments. Along with these changes, it will adopt a flex office as early as summer 2020. Initially, the company will pilot this initiative in four sites, all in France.
It is ironic that an automotive OEM markets its work at home initiative as part of its employee-and environment-friendliness. We think the announcement is all about savings. The automobile industry is one of the main sources of pollution globally. Clearly, PSA is looking to reduce its costs in a difficult macro environment. The company has not indicated how much savings it was targeting: we estimate it to up to 50%. The cost savings will take to materialize as PSA will wait until the leases are due before letting offices go.
The home office side of the story is missing. We have all worked from home in the past two months. Some of our colleagues have a dedicated office room, especially those workmates that live in houses. However, colleagues working for headquarters, tend to live in cities, in flats and don’t have dedicated rooms. The future for these employees will be strained.
Work at Home Will Lead to Offshoring
We are expecting that providers such as ER&D service vendors will be impacted. Once remote working is the new norm, offshoring is the logical step. Well before the crisis, PSA had already a presence in Morroco for its derivative engineering needs. The crisis will amplify this trend: we are expecting PSA to accelerate offshoring in its French operations and possibly in Germany. Also, with PSA merging with FCA, Italian’s R&D operations will also be on the block sooner than later.