Should Your Business Continue to Work Remotely? 7 Benefits to Consider.
Companies that were once uncertain about remote work are now capitalizing on the benefits of remote work.
Around the world, millions of employees are working in the comfort of their homes—not by choice, but by necessity. As the COVID-19 pandemic forces people to shelter in place, companies that were once uncertain about remote work are now seeing the silver lining of benefits.
The Brookings Institution estimates that up to half of American workers are currently working from home, more than double the number who worked from home (at least occasionally) in 2017-2018. This large-scale, work-from-home experiment is revealing the pros and cons of telecommuting in real-time. If you’re a business owner or manager, you may be asking yourself: “After the pandemic is over, should we continue working from home?”
Making a temporary situation permanent
According to a recent survey from Gartner, 74% of Chief Financial Officers intend to shift some employees to remote work permanently after the pandemic is resolved. “CFOs, already under pressure to tightly manage costs, clearly sense an opportunity to realize the cost benefits of a remote workforce. In fact, nearly a quarter of respondents said they will move at least 20% of their on-site employees to permanent remote positions,” said Alexander Bant, practice vice president, research for the Gartner Finance Practice.
Of course, not every job is suited to be done remotely—and there are downsides. Notably, managing remote teams can be more challenging, staff members may feel isolated working at home, and instead of becoming more productive, some employees may become more distracted. Despite these potential disadvantages, more CFOs, business owners, and managers are recognizing that remote work can deliver significant cost savings (and other benefits) in the long run. Let’s delve into the top benefits of telecommuting.
- Save money
First and foremost, telecommuting can save your small business a significant amount of money. With all or some of your employees working from home, you’ll be saving money on:
- Real estate—Currently, you may be locked into a lease for a period of years. However, if you decide to downsize your office space or forgo it entirely in the future, you’ll save a significant amount of money.
- Operational costs—From heating and air conditioning to office supplies and copy machines, you’ll likely be able to cut many operational costs. However, you may incur costs associated with setting up your employees’ home offices and implementing telecommuting systems and software.
- Perks—When employees work at home, they make their own coffee (or swing by a local coffee shop), prepare their own lunches, and pour their own beers for Zoom happy hours with their co-workers. With a remote team, you can switch these office perks to invest in valuable benefits such as starting a 401(k) plan or increasing your company matching contributions.
So how much could you save?
According to a March 2020 report from Global Workplace Analytics, a typical employer can save an average of $11,000 per half-time telecommuter per year. It’s the net sum of things like increased productivity, lower real estate costs, reduced absenteeism and turnover, and better disaster preparedness. Want to calculate your own savings? Global Workplace Analytics offers a free TeleworkSavings Calculator™.
- Make employees happy
According to Global Workplace Analytics, 80% of employees want to work from home at least some of the time.¹ In particular, Millennials appreciate flexibility and remote work opportunities. Telecommuting is such a draw that office workers would even take a pay cut if they could work from home!
More than a third of workers would take a pay cut of up to 5% in exchange for the option to work remotely at least some of the time; a quarter would take a 10% pay cut; 20% would take an even greater cut.²
- Improve employees’ financial wellbeing
Many studies have shown that personal financial stress negatively impacts employees’ performance, productivity, and ability to focus—all of which can lead to higher employee turnover. However, telecommuting can help your employees cut costs, improve their work-life balance, and boost their financial wellbeing.
In fact, employees could save hundreds (or even thousands) of dollars on commuting expenses, take-out lunches, and even business clothes! According to a USA Today interview with FlexJobs, remote workers typically save about $4,000 a year by telecommuting. The money employees save can help them improve their current standard of living, invest for retirement and other long-term goals, and gain an overall sense of financial wellbeing.
- Increase productivity
While the perception is that remote workers work less, the reality is actually quite different. A recent study from Airtasker , a gig economy platform, which surveyed more than 1,000 full-time employees across the United States, 505 of whom worked remotely, found that:
- Remote workers averaged 27 minutes of unproductive time a day, compared to 37 minutes for in-office workers
- Remote workers worked an average of 1.4 more days every month (or 16.8 more days every year)
Plus, a remote job eliminates many of the typical “time sucks” of the average in-office workday like lengthy commute times, chats by the water bubbler, and unnecessary meetings.
- Minimize workforce turnover
If you ask someone what they don’t like about their job, you’ll get a lot of different answers. “I hate my commute!” “My schedule isn’t flexible!” “I work so hard, but I don’t earn enough money.” “My boss micromanages me!” Many of these common reasons why people are dissatisfied at their job can be solved through remote work. By trusting your employees to telecommute, you give them the flexibility, free time, and money they need to be happy enough to stick around.
- Hire the best talent (regardless of location)
Relocation expenses ranging from moving services to temporary housing can cost your company thousands of dollars per employee. Instead, consider hiring the best talent from around the world, allowing them to work remotely. You’ll save significant upfront costs and be able to draw from a larger pool of talented potential staff members (who may also strongly prefer to work from home).
Plus, if your company is based in a city with a high cost of living and you hire a remote worker in a rural, lower cost of living area, you may be able to pay them a lower rate that’s still competitive for their location.
- Keep your business on track in the best (and worst) of times
As we’ve witnessed over the last several weeks, companies that had already invested in telecommuting software—and had a corporate culture conducive to remote work—were able to more smoothly transition their workforce. While we hope that COVID-19 is the last pandemic that the world ever faces, the fact of the matter is that business disruptions happen. Whether it’s a major tropical storm or a health crisis, it helps to have a contingency in place that allows your employees to work remotely on a full-time or part-time basis.
Capitalizing on the benefits of remote work
If you decide to reap the benefits of telecommuting, you may be wondering: “What should I do with all the money my company saves?” Well, it’s a perfect opportunity to invest in your company’s future by starting a 401(k) plan or adding a company match. According to a Betterment for Business survey, 67% of plan participants said that a good 401(k) plan was important in their evaluation of a job offer. By providing this valuable benefit, you’ll improve your company’s ability to recruit and retain top talent. Plus, living and working through a pandemic is challenging for everyone. Reward your employees and show how much you appreciate them by investing in their futures with a 401(k) plan.
There’s never been a better time to start a 401(k) plan than right now. With the recent passage of the SECURE Act, you can now receive up to $15,000 in tax credits to help defray the start-up costs of your 401(k) plan. Also, if you add an eligible automatic enrollment feature, you could earn an additional $1,500 in tax credits. See how.
Betterment makes it easy for you to offer your employees a better 401(k)—at a fraction of the cost of most providers. Want to learn more? Let’s talk.
- https://globalworkplaceanalytics.com/telecommuting-statistics(State of the American Workforce, Gallup, 2016)
- https://globalworkplaceanalytics.com/telecommuting-statistics(State of Remote Work 2019, Owl Labs)
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