8 Ways Remote Work Saves Your Company Money

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 flexible work model affect your finances?

In this article, we’ll present you with eight financial benefits of remote work, from real estate costs to increased engagement of a remote workforce. And these factors benefit everyone, from small business owners to multinational corporations, so keep on reading!

Office Space: Reduced Rent and Supplies Cost

Let’s start with the most obvious way in which the hybrid model saves you money.

When you introduce remote work or working at 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. If your company has offices in a big city like New York or San Francisco, you know just how expensive office spaces can be.

On the other hand, a smaller office and remote days will mean:

• Lower utility bills
• Lower cleaning service expenses
• Less frequent shopping for food and coffee for the office kitchen
• Reduced need for office supplies

These saves can seem irrelevant when looked at separately, but can actually turn into a lot of money affecting your bottom line. 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. On top of all this, just think about the amount of pollution and emissions you can eliminate by cutting down on commuting!

Better Employee Retention and Lower Turnover

One way hybrid work can save you money is by lowering employee turnover and improving your employee retention.

If your employees are happy with their work arrangements (and are not threatening to quit if required to return to the office full-time), 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 full-time 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.

Hybrid Work and Lower Absenteeism

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 absences, 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 telecommuting decreases absenteeism:

• Employees don’t expose themselves to a sick coworker
• An occupational hazard is less likely to happen
• The back-to-work transition is easier after an illness
• Breastfeeding moms may be able to work while staying at home with the baby

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 work from their home office 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.

Higher Employee Productivity and Engagement

If they allow their employees to work from home half of the time, employers could save up to $11,000 per employee per year, according to Global Workplace Analytics. That sounds too good to be true, doesn’t it?

But it is true. A recent survey even showed that the 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 telework 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 increase may equal an additional 16 days per year. Of course, these gains only happen if employees aren’t swarmed with video conferencing and endless meetings!

Access to the Global Talent Pool

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 you 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.

Lower Health Costs

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 achieve better work-life balance, you’re nipping the problem in the bud and being cost-effective since the cure would have cost more than prevention.

Lower Team Building Costs

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 is 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’s a perk that may cost as little as nothing.

Higher Continuity During a Crisis

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 huge financial benefit of switching to a hybrid work model gives you more options in times 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 implementing flexibility into how employees work and managed to save some money, despite the crisis.

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

Hybrid Work is a Win-Win Situation

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.