Since the pandemic proved that most jobs can be carried out from home, remote working has boomed. More and more workers are actively seeking jobs that allow them to work from home, a trend that has had major consequences for businesses in terms of cost, culture, and productivity.
Today, we’re discussing the true cost of remote work for businesses. Many businesses only think of the cost savings that come with eliminating rate payments, but the true cost goes far, far deeper. Could it actually be that remote working is costing businesses more money? Let’s discuss the different contributing factors.
Overhead Costs
Let’s start with the obvious cost saving that we’ve already mentioned, rent. Some businesses choose to offer remote working while also allowing staff to come into work if they desire, which allows them to downsize and benefit from lower overheads. Other businesses choose to go fully remote, negating the need for an office entirely and subsequently fully eliminating rent costs.
There are other overheads that will be impacted as a result of moving to remote working. It’s worth considering if your company offers commuting subsidies to staff members, as this is another cost that could be either reduced or eliminated entirely.
All in all, overheads should be greatly reduced as a result of shifting to remote working.
Equipment Costs
Obviously, offices need equipment, and this is another area where you can cut costs as a result of shifting to remote working. Think about how much money is spent on items like computers, printers and stationery each year.
However, it’s also unfair to expect your staff to foot the bill, so you may need to supply employees with equipment or a work-from-home budget that allows them to set up a home working environment. This should still work out cheaper than filling an office full of machinery and equipment, but it’s worth considering that your savings may not be as great as you initially imagined.
Productivity Costs
Poor productivity costs businesses money, so it’s important to consider how a shift to remote working will impact your staff’s productivity levels. Some employees are more productive when working from the comfort of their own home, while others may struggle to get into the working mood.
Poor productivity could also come from poor company culture, which can become an issue when your team isn’t having direct interactions with each other.
Staff Turnover
Replacing staff also costs money. It costs time to go through the hiring process, but it also comes with a financial cost in terms of training new members of staff. Most employees will be more satisfied with remote working, especially if this is an option rather than a forced change. If so, this would subsequently reduce hiring costs as fewer staff would need to leave the company and therefore need to be replaced.
However, as discussed, a remote team can cause the workplace culture to deteriorate. Failing to prevent this from happening will likely lead to unhappy staff who may ultimately want to leave the business in the near future.
Sick Leave
Sick days can also be costly to businesses. While contracts and laws differ from country to country, most businesses are expected to pay staff if they need to take time off for medical reasons, something that is mandatory in many countries. Even businesses that don’t pay staff for sick days will experience a drop in productivity which, as we’ve already discussed, is indirectly linked to increased costs.
However, if employees are working from their home or another remote location, a business should see their number of sick days fall. Working remotely allows staff to work through minor or contagious illnesses, while this may not be possible in an office environment.
Talent Pool
As mentioned at the start of this article, employees are now seeking out remote jobs for a better work-life balance. Businesses that fail to offer this run the risk of not being able to attract the best talent. But what has this got to do with costs?
As recruitment is no longer restricted by geographical location, you can expect more applicants, which could subsequently drive down salaries and cut costs.
Final Thoughts
When considering the financial implications of remote working, it’s also important to consider how it will impact your business on a wider scale. For example, it’s much easier for a digital marketing agency to work remotely than it is for a real estate agency that requires a physical branch to advertise properties to passersby. For most office-based businesses, the best solution could lie in a hybrid approach that sees staff work some days from their own home and other days from a shared office space. This approach allows businesses to benefit from cutting costs without harming culture or productivity too much.
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