In the post-covid era, we’re finally able to look more critically at the effect the pandemic has had on the workplace. Working remotely is here to stay, but we can benefit from an investigation into the costs and benefits of remote work for our businesses.
Only you know how working remotely has affected your industry—and your unique workplace. Is working remote saving your business money? Here are some elements to consider as you evaluate the impact of remote work for your bottom line.
What we’ve learned about remote work
The improvement in cloud computing, teleconferencing quality, and the increasingly virtual nature of modern work have all contributed to a remote-friendly era. Even before the COVID-19 pandemic we saw the shift to remote work beginning. And now we know that remote work is here to stay, even once workplaces were cleared to reopen safely.
“Our best estimate is that 25-30% of the workforce will be working-from-home multiple days a week by the end of 2021.” – Kate Lister, President of Global Workplace Analytics
Employers are now facing the reality of a perpetually remote workforce, and need to address the demands for flexibility that they’re hearing from employees in the COVID aftermath. According to Bloomberg, 49% of younger workers (Millennials and Gen Z) will quit if asked to return to the office full time. Many remote workers have noticed thousands of dollars in savings when they stopped the commute (and other related expenses like buying lunch), and they’re not willing to give back those hours and savings.
A pleasant surprise is how much productivity rises with remote work. Prodoscore found a whopping 47% improvement in productivity, and also noticed that work-from-home removed the distractions of coworker interactions or getting drawn into unrelated conversations. Employees are better able to prioritize and focus, particularly if they feel supported by management.
Ways remote work saves your business money
Working remotely can increase productivity by 20-25%
Increasing employee retention – 78% of company managers surveyed are using flexwork and telecommuting as a non-monetary way to improve work-life balance for employees and improve employee retention.
Attracting better talent – 54% of employees would leave their current job to take one with better remote work flexibility. By offering roles with better flexibility you’ll be able to attract (and land) better talent in competitive fields. Additionally, talented working mothers need flexible hours and office schedules that will allow them to take jobs they would otherwise have to refuse.
“Optimal engagement” – Working from home 3-4 days a week is the sweet spot for optimal engagement and morale. Highly engaged workplaces enjoy 21% higher profitability.
Environmental costs – Offices are enjoying a significant decrease in operating costs and office expenses such as utilities, paper, snacks, and other workplace products. A non-monetary plus is increased air quality and smaller carbon footprints when employees aren’t commuting to and from the office.
Downsizing spaces – Many workplaces have been able to downsize their office spaces, whether that means subleasing parts of their building or moving into a smaller space.
Reduced absences – In a normal workplace, most of the “sick” days aren’t really about illness—they’re family emergencies, stress, and personal issues. Teleworking allows a remote employee to manage their personal lives without taking a full day of absence, resulting in a 63% reduction in absences.
Ways remote work is costing you
Technology cost – Providing computers, software, and additional tools for remote collaborations can be a significant cost for your business (Zoom grew to 300 million meeting participants in Q2 of 2020 and might have included your business).
Home office reimbursements – Labor laws vary by state, but there are some states like California that require employee reimbursement for remote work expenses (such as office furniture, phone and internet access, etc.).
Lack of recognition – Remote work can make it harder to connect and celebrate with your employees. A 2020 engagement report showed that 64% of employees are considering an exit from their current company and it’s largely tied to appreciation (only 13% get recognized monthly or more frequently).
Security risks – 73% of IT workers have reported an increased security threat when employees are working remotely. Phishing, insecure devices, and insecure networks made costly data breaches more common in 2020. Not to mention, training and additional layers of security can be costly, as can losing revenue due to fraud.
Poor management – If your leadership is poorly suited to managing remote employees, you may be wasting time and losing connections.
What this means for your business
Your business is unique, but you can use this data to take a closer look at what’s happening within your remote workforce. Here are the key questions you need to ask:
- Are our employees happy with the remote/in-office balance we’ve struck? Why or why not? How can we improve flexibility?
- Have we been able to trim our operating costs due to remote work? Can we downsize or otherwise cut fixed costs with remote work?
- How much are we spending on remote work-supporting software? A SaaS subscription audit might be in order.
- Are we staying connected with our employees? Are they regularly recognized for their work?
- What are we doing to actively prevent fraud and other security risks?
The shift to remote work has changed the economy forever, and it’s up to each small business owner to leverage the change for success. We encourage you to assess the ways remote work has impacted your business and to continue finding ways to spend smarter.
BILL provides insightful budgeting and expense management for small businesses, with free software and cards for every employee. See how we can transform the way you manage your small business finances.
