July 20, 2021 by Andrea Rajic
Over 60% of companies with high revenue have already accepted the hybrid work model as their new normal. Do you need more compelling reasons to do the same?
You may have already heard that offering the possibility to work remotely makes you a more attractive employer and reduces your employee turnover. Your teams will appreciate the flexibility and reward you with productive performance, while their happiness index increases.
But how does the hybrid work model affect your finances?
It can save your money in more than one way.
In this article, we’ll present you with eight financial benefits you may experience if you ditch the traditional work models and become a hybrid business.
Let’s start with the most obvious way in which the hybrid work model saves you money.
When you introduce remote work/work from home as an option for your employees, you can either choose a few days when everyone should show up at the office, or assign specific days to each team when they should meet and work together. In both cases, your current, large office space may no longer be needed.
Switching to a smaller office, or even better, a flexible workspace that you can rent when necessary is more cost-effective than paying for an office that may be completely empty on some days.
On the other hand, a smaller office and remote days will mean:
These saves can seem irrelevant when looked at separately, but can actually turn into a significant amount of money at the end of the month. Additionally, managing remote workspace budgets can be easier and more flexible than office leases, making the job of People and Workplace teams more transparent and bringing cost savings.
One way hybrid work can save you money is by lowering employee turnover and improving your employee retention rate.
If your employees are happy with the conditions you offer (and are not threatening to quit if required to return to the office), they’re more likely to stay. That eliminates the potential costs of training new employees - time, resources, and maybe even new staff who would need to accompany them during the onboarding process.
The SHRM found that it can cost you six to nine times more to find and train a new employee than what the old one used to earn per month. The total recruiting and training costs can go up to $45,000 if the employee who quit had an annual salary of $60,000.
In the long run, promotions and raises are way more cost-effective than training new team members every two months.
A survey by Gallup showed that embracing the hybrid work model and all the flexibility that goes along can decrease absenteeism by 41%. That percentage is certainly impressive, and combined with the 17% increase in employee productivity can really make a difference in your business.
Employee absenteeism, regardless of why the employee isn’t at work (sick leave, family emergency, sabbatical, or other), can cause disruptions in your workflow. That can result in overdue tasks, unhappy clients, and other issues.
Here are a few ways remote work decreases absenteeism:
Of course, some situations won’t allow the employee to work from home, either, but some problems can be prevented by simply allowing your worker to telecommute at least a few days a week. It’s a very simple way to avoid issues in the workflow and meet all the deadlines, so you don’t have any additional costs to cover for the absent employee, or lose any revenue due to missed deadlines.
If they allow their employees to work from home half of the time, employers could save up to $11,000 per employee per year! That sounds too good to be true, doesn’t it?
But it is true, in fact. A recent survey even showed that the amount of money employers could save when combined measures in billions of dollars per year.
But there’s something even more important to this: by allowing your team remote days, you get to enjoy their increased productivity and engagement.
This claim is backed by another Gallup study. They found that employees who work remotely up to 80% of the time are optimally engaged, and the most motivated among them can generate a 15% productivity boost for the company.
With this in mind, it’s no wonder that companies that combine on-site and remote work have recently increased their profitability by 21%.
And here’s another mind-blowing fact: as you remove the long hours of commute from your employees’ workdays, their productivity may equal to an additional 16 days per year.
Looking for the right fit for your company can be a demanding and time-consuming task. And it’s not unheard of that recruiters fail to find a suitable candidate locally. That can cause issues in the workflow, especially if a former employee left abruptly and you don’t have much time to cover for them.
However, access to the global talent pool can easily solve this issue. Say you own a business in the US, and you’re in need of developers. Did you know Turkey has an amazing IT workforce? Most of their engineers are work-ready, so why not start hiring globally?
This decision can save your money in two ways. First, you’ll avoid the costs you would have faced due to delivering the work to your clients untimely.
On the other hand, your remote employees may cost less than local ones because of the difference in standards, contracts, local labor laws, and more.
TELUS has recently published a study that found that 80% of remote workers would quit their jobs to work for a company that focuses more on employee mental health.
That has two important implications:
By having a proper employee wellbeing strategy in place, you can help your employees cope with remote work-related stress. That helps them stay on top of their tasks, reduce absenteeism, and maintain their work-life balance. At the same time, it helps you build an image as a desirable employer.
Remote work does come with its share of stress, so it’s important to offer help to your remote team if you want to keep healthcare costs low. By providing your employees with ways to prevent burnout and other health issues, you’re nipping the problem in the bud and being cost-effective since the cure would have cost more than prevention.
A study that included more than 33,000 workers in the US found that over 50% of them have a close friend at work. Workplace friendships are important as they make your employees happier.
To nurture these friendships, you can organize different types of team activities both inside and outside of working hours, with team-building being the most popular way to boost team morale and improve relationships between coworkers.
Although it may be challenging, it’s possible to organize a fantastic virtual offsite and help your team members bond even though they’re at different locations. As you’re holding it online, you don’t have to pay for the venue or catering, so it results as more cost-effective.
Investing your resources in team building activities can be even more critical when you run a hybrid team. When you’re all at the office, at least you share the same working space and have those water-cooler moments that you’re deprived of when you work remotely. A well-planned team building can help your employees overcome that gap and get to know each other. That often leads to better collaboration, interpersonal relationships at work, and more productive brainstorming sessions.
The best thing about it? It may cost as little as nothing.
In September 2020, Yelp released a report with some frightening stats. Ever since the pandemic started, almost 98,000 businesses all over the US have permanently closed their doors. In just a month and a half, between mid-July and the end of August, the number of closed businesses increased by 23%.
We can only imagine that this number has increased even more by now.
This is sad news, but it’s also a lesson - those who weren’t able to adapt to the new normal couldn’t continue working. Of course, some industries simply can’t function virtually, but we can’t ignore the fact that a huge financial benefit of switching to a hybrid work model gives you more options in the time of crisis.
Since March 2020, for instance, many teachers have said goodbye to their traditional classrooms and started teaching online. Digital products such as courses or e-books have started booming. Many businesses discovered the hidden potential of moving their business to the virtual world and managed to even save some money, despite the crisis, like accountants or business consultants.
Their only extra cost may be a monthly or annual fee for quality software, but these also pay off in the long run thanks to automation and other helpful features they typically have.
Our professional worlds have irreversibly changed. No one can go back to the old normal, and most people don't want to do so anyway. And why would they when the hybrid work model has so many benefits?
From reducing your office space and employee turnover to increasing employee engagement and happiness, there are many ways in which combining office and remote work can be cost-effective for your business.
And if you’d like to ditch your old office space altogether and explore the possibility of flexible workspaces that are there for you when you need them, reach out to Gable - we’ll help you find an ideal place where you and your team can do your best work.