5 Ways Remote Work Will Improve Your Company’s Bottom LineFuture of Work Managing Teams Productivity Wellness
For many businesses, the transition to a remote workplace isn’t just a way to survive the pandemic. Remote work is a realistic long-term solution to more effectively and efficiently conduct daily operations, one that produces happier employees and a healthier bottom line. We've identified five proven ways companies like yours can reap financial benefits from a distributed workforce.
1. Lower Overhead
The biggest line-item savings of a remote workforce is, of course, real estate. Allowing your employees to continue working from home could save you hundreds of thousands of dollars in rent, especially if your company is based in an expensive city. In New York, the most expensive US city, the average cost to rent office space is $14,800 per employee annually. In Atlanta, one of the least expensive cities, you could still save $4,194 per employee per year.
With less office space, your other business expenses will also decrease. You’ll pay less for utilities, parking, security, and other costs of maintaining brick-and-mortar locations.
2. Decreased Labor Costs
The virtual workplace reduces labor costs in some unexpected ways. You may still have the same number of employees with a distributed workforce, but the cost of finding and hiring them is cheaper. You’ll be able to choose from a global pool of workers, not just the people who live within commuting distance of your office. And if your business is in a city where the cost of living is high, you can recruit candidates from more affordable places, where salary expectations are lower.
Research has also shown that employees are willing to forgo raises or even take pay cuts in order to work remotely. A study by Global Workplace Analytics found that 36 percent of employees would rather telecommute than receive a pay raise. And a report from Owl Labs suggested in 2019 that 34 percent of workers would take a pay cut of up to 5 percent to work remotely.
It’s no mystery why employees prefer working from home: Going into the office is expensive. The typical worker spends $2,000-$5,000 a year commuting. Employees are much more flexible with their salary requirements if they don’t have to pay for gas, lunches out, a full week of business attire, and dry cleaning.
3. Increased Productivity
Research from Global Workplace Analytics shows that remote workers gain 35 minutes of focused work time per day because they have fewer distractions.
The biggest time savings come when employees are doing independent work, which accounts for 57 percent of their day, on average. They’re able to stay on task 75 percent of the time when telecommuting, versus only 63 percent of the time at the office.
“This one really surprised us,” says Kate Lister, president of Global Workplace Analytics. “Even with the unusual challenges to working from home right now—spouses, children, pets—employees say they are less distracted than when they are at the office.”
The culprit for all the distractions? Quite possibly it’s the open-plan office, which creates a noisy environment that can lead to frequent interruptions. At home, employees have more control over their work environment.
Another surprising finding is that employees tend to log longer hours when working remotely. NordVPN found that American workers have been using its network service for three extra hours every day since the pandemic started. When employees don’t have to dress up, commute to work, and attend work lunches, they can devote more time to completing important tasks.
4. Improved Retention
Employees who are happy with their work situation quit less often, which creates additional savings in terms of recruitment and training costs. According to Owl Labs, 71 percent of remote workers are happy in their jobs, compared to just 55 percent of on-site employees. The Global Workplace Analytics survey found that 82 percent of American office workers want to continue to telecommute after the end of the pandemic, at least on a weekly basis.
“Having had a taste, even under less than ideal conditions, employees are saying they want more. The genie is out of the bottle and it’s not going back in,” says Lister.
Just how important is remote work to employees? Well, many say they will switch jobs to get it. According to a study by Indeed, 37 percent of employees who aren’t allowed to telecommute have considered looking for a new job with remote work privileges, and 14 percent are actively searching. Two-thirds of employees also say that they’d take another job if it merely shortened their commute.
Millennials are especially concerned about workplace flexibility, according to Gallup. Because millennials are among the most difficult and critical groups to recruit and retain, remote work is could be the powerful strategy for keeping them engaged at work. (Baby boomers and Gen Xers also appreciate the opportunity to work from home, but they tend to value paid vacation more.)
5. Reduced Absenteeism
Employees who work remotely save companies money by showing up to work more often. Absenteeism costs a typical business $1,800 per employee per year. But surveys show that many workers who call in sick aren’t actually ill. Nearly 80 percent are dealing with personal or family issues. Telecommuters, by contrast, have flexibility in their schedules that enables them to care for a sick child or go to the doctor without taking an unscheduled day off. They’re also happier, which makes them less likely to call out due to stress.
Telecommuting also cuts down on the number of legitimate sick days because remote workers catch colds less often at home than in an office. Furthermore, they return to work sooner after having surgery or other health issues.
Companies that have tried to improve absenteeism by allowing employees to work from home have seen promising results. For example, after implementing a remote work program, the American Management Association decreased unscheduled absences by 63 percent.
Reap the Financial Benefits of a Remote Workforce
Employers who have tested the benefits of work from home teams can attest to lower utility bills and other expenses. Your company can realize these benefits and more by building a remote workforce, even part-time, that’s happier, more productive, and, ultimately, more profitable.