When the pandemic hit, many Americans with jobs that didn’t require face-to-face interaction were forced to work from home. This paradigm shift in how companies and employees managed operations created new norms and expectations. Many employees enjoyed ― and continue to embrace ― the freedom and flexibility of remote work plans.
Business owners have other factors to consider. If allowing your team to work from home can help you reduce operational costs or give your company other competitive advantages, you have a win-win situation. Here’s what business owners should know when evaluating the benefits of allowing remote work.
Along with remote work’s benefits for workers, business owners may find that remote work saves their companies money. For example, Sun Microsystems identified telecommuting-prompted savings of $68 million yearly in real estate costs while Dow Chemical and Nortel saved over 30 percent on non-real estate costs.
According to Global Workplace Analytics, nearly 60 percent of employers identify cost savings as a significant telecommuting benefit. It estimates that for all remote-work-compatible jobs, if everyone who wanted to work remotely did so just half of the time, the total money saved would be over $700 billion annually. This averages out to more than $11,000 per employee per year.
Here are some concrete ways remote work saves businesses money:
While direct money savings are crucial, other telecommuting benefits can save money in the long term.
It’s no secret that employees welcome remote work options. According to data from McKinsey’s 2022 American Opportunity Survey, 87 percent of employees will choose a remote work option when offered.
Enabling telecommuting and other flextime arrangements makes your company a more attractive place to work for existing employees and new recruits. For example, parents with child care responsibilities will appreciate the flexibility while other workers can enjoy an improved work-life balance. Happy, appreciative workers will likely stay, reducing employee turnover and boosting engagement.
While allowing employees to work from home requires trust, your business could benefit from increased productivity. In a joint study from the University of Chicago and the Mexico Autonomous Institute of Technology, 40 percent of respondents found their work-from-home productivity better than their in-person productivity. Additionally, 60 percent said they were more productive at home than expected.
Consider that office environment affects productivity. Remote workers can create an ideal environment free from noise and distractions. Additionally, stress can impact productivity, and remote workers don’t have to deal with the stress of commuting, which means they can focus on the task ahead instead of taking time to calm down after tackling the morning rush hour.
According to the Bureau of Labor Statistics, many employees would prefer to work from home instead of getting a pay raise. While businesses should always strive to provide fair, competitive compensation, enacting a telecommuting plan lets you reward employees while keeping payroll costs down.
Additionally, Global Workspace Analytics estimates that employees who work from home full-time save between $2,000 and $7,000 in transportation and work-related costs, giving them the equivalent of a raise. Many employees can also qualify for home office tax breaks. If the employee saves money on after-school programs or elder care, which only adds to the benefit.
Remote work policies can reduce employee absenteeism as employees respond to the benefits of greater flexibility. Flexible scheduling allows team members to fit their work around personal obligations that would otherwise necessitate time off.
A flexible work schedule may also lead to healthier employees. Remote workers tend to bounce back more quickly from illness, and there’s no risk of one cough or cold traveling through your entire workforce ― reducing employee sick days overall. Additionally, some employees will feel well enough to get some work done when they’re feeling under the weather if they can do so from home.
Most business owners appreciate that meetings can be a time suck and waste precious resources. Keeping everyone on track and organized is challenging, even with the most stringent agendas.
Additionally, delays result from trying to coordinate people from multiple departments into one venue. With online meeting technology, you can still collaborate, but your meetings will likely be better planned and remain on message.
To improve meeting productivity ― virtual and in-person ― set strict time limits, distribute a meeting agenda and ensure actionable follow-up tasks.
Remote work may save money, but it incurs some costs ― at least initially. For example, you may need to make infrastructure changes to support remote workers and prepare for remote technical support issues. While many solutions exist, you must factor these costs into your budget. You also must consider the software and tools your team will need for efficient remote work, including video conference software and communication tools.
Aside from costs, you may face the following drawbacks when enacting a remote work policy:
Since working from home became a reality for millions of Americans, more potential employees view remote work as a crucial employee benefit. When you combine this attitude shift with the environmental benefits of working from home, the convergence of two megatrends means everyone returning to the office is unlikely.
Many business owners should consider allowing all or some employees to work from home at least some of the time. Remote work can save your company money, improve productivity, reduce turnover and absenteeism and improve job satisfaction.
Of course, the nature of your business may disallow remote work. However, if possible, letting employees work from home may contribute to its overall success.
Jennifer Dublino contributed to this article.