As we have seen over recent months, it is possible for your business to get more mileage out of its current budget without digging into gigabytes of data (though data mining and workflow optimization offer one way to boost profits). More and more companies are ending their leases and transitioning to remote workforces. By transitioning to and operating as a remote workforce, your organization can spend less on costs associated with brick-and-mortar offices and positively impact your bottom line.
If you’re not convinced a company can operate completely distributed, check out GitLab’s success. Though this $2.75 billion company never intended to be fully remote, it is now well known for its lack of a central location. It’s likely that some of GitLab’s financial success was made possible by ditching the office model and all the costs associated with it. We can’t promise your business will grow to be worth $3 billion, but you can decrease office costs to increase your company’s value.
In fact, Global Workplace Analytics found that businesses can eliminate up to $11,000 in expenses per employee every year just by allowing them to work from home half the time! Take a look below to see how you can save money with a remote workforce.
Lower Overhead Costs
Companies that are completely remote have no need for the overhead costs associated with a centralized office. Rent, utilities, parking fees, security systems, and minor maintenance projects are all unnecessary when every team member works remotely.
Also, consider furniture and equipment expenses: no office, no desks. You won’t have to pay for chairs, couches, lamps, or decorations.
You’ll save money even if you only reduce some office space. Ctrip, China’s largest travel agency at 16,000 employees, saved almost $2,000 per employee on rent alone by reducing the size of its headquarters.
Reduce Employee Absences
Employers should offer paid time off (PTO). Whether they’re sick, taking a vacation, or just need a personal day, employees occasionally need time away from work.
It’s also true, however, that the time employees spend away from their jobs can make progress come to a halt in many areas of your business. You shouldn’t eliminate PTO, but you should create an environment in which employees won’t feel the need to request days off as often.
The remote workforce model gives teams the flexibility to balance work and life throughout each day. A person could work for a few hours, go to their child’s school program, and return home, all without having to request half a day off. Employees don’t waste time driving to work, then to the school, and then back to work. People with illnesses that aren’t too severe can still work without fear of spreading the virus to their coworkers. Some employees will travel while they work, choosing not to use vacation days.
According to Buffer’s 2019 State of Remote Work study, “43 percent of remote workers took between 2-3 weeks of vacation time, with an additional 20 percent selecting options between no vacation and one week per year.”
Increase Operational Output
Numerous studies suggest that remote workers get more work done than in-office teams. By simply eliminating long commutes and the distractions that accompany open-office layouts, businesses can expect to see their employees working more hours per day. In fact on-site workers are also working longer weeks — but for a very different reason. According to one study, in-office teams work more because it’s required, while remote workers work more because they’re fulfilled in their jobs.
Also, people on remote teams tend to be happier because of their freedom and flexibility. And guess what: Happy employees are usually more productive than their unhappy coworkers — an average of 12 percent more productive, as a study from the Social Market Foundation and the University of Warwick’s Centre on Competitive Advantage in the Global Economy discovered.
Reduce Employee Turnover
Speaking of happiness, that’s one of the main reasons employees remain in their jobs, and increased retention saves you money.
Aside from affecting morale and wasting time, high turnover levels can lead to a revolving door of employees, and the expenses of such frequent hiring can really add up. Many things factor into the cost, like sourcing, background checks, and assessment. All told, you may be spending $4,000 per hire. That doesn’t even account for the impact on profits from projects that may be stalled or delayed by a departing employee.
Clearly, you save money if your team members stick around for as long as possible. You can’t always count on loyalty, but you may have more luck if your workforce is distributed. Seventy-four percent of remote employees say the ability to work remotely makes them less likely to leave their employer. More specifically, remote workers are 13 percent more likely than on-site workers to stay with their current employer for the next five years.
Start Cutting Business Costs
We found a handy tool from Global Workplace Analytics that helps you calculate telework savings. Once you see how much you can save, you’ll need other tools to help facilitate the implementation and continued analysis of your distributed workforce.
A remote workforce management solution like ActivTrak gathers activity data from employees wherever they work. ActivTrak data helps you inventory computers, track time worked without a time clock, improve efficiency, and monitor team engagement. To see firsthand how ActivTrak can help, sign up for your free account.
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