The business case for letting employees work from home
Most companies view working from home as an employee perk, but perhaps they should consider the model as a viable business strategy for increased productivity and lower labor costs. Far from sitting at home in their pajamas, remote workers have proven themselves productive in study after study. In fact, nearly 60% of employers identify costs savings with telecommuting. Here are eight ways telecommuters make a positive contribution to the bottom line, compared to colleagues in the office.
Nicholas Bloom, a professor of economics at Stanford, conducted a randomized experiment on 16,000 employees of Chinese firm CTrip to see how remote (home) workers compared to their in office peers. Bloom found that home working increased productivity by 13% and saved CTrip approximately $2,000 per year per remote employee. Global Workforce Analytics confirms that over two-thirds of employers report increased productivity among telecommuters.
Reduction in turnover
Nicholas Bloom’s research discovered that attrition fell among the remote workers at CTrip. Employees working from home reported higher work satisfaction and were 50% less likely to quit than their peers in the office. Attrition costs employers $10,000 to $30,000 per valued employee, according to Global Workforce Analytics.
Lower payroll costs
Having a telework program can help lower overall payroll costs in several ways. First, employers are able to hire the best talent, regardless of geographic location, enabling them to take on great new employees in lower cost-of-living areas. Another reason that employers can offer remote workers a bit lower salary is that remote employees save nearly $5,000 and an average of 50 minutes each day by eliminating commuting.
Finally, 37% of employees surveyed indicate they would be willing to take a 10% pay cut in order to work from home, and 36% of employees would choose telework over a pay raise—indicating that this ‘benefit’ has monetary value to employees when it is time to negotiate salary packages.
The physical and mental wellbeing of employees has an impact on the cost of healthcare. Employees who work at home can more easily eat healthier meals they prepare themselves instead of eating in restaurants. Remote workers may have an opportunity to sleep a bit longer than their commuting colleagues—getting closer to the recommended seven to eight hours of sleep per night. They also report suffering less stress.
Reduction in unscheduled absences
Unscheduled absences cost employers $1,800 per employee each year, and according to Global Workforce Analytics, 78% of employees who call in sick actually do so because of family issues, personal needs and stress. Organizations that implement telework enjoy a 64% reduction in unscheduled absences.
Remote employees are often able to still work from home on days they would otherwise have had unscheduled absences. For example, a parent can continue to work with a child home from school. Sick employees can work without spreading a virus to coworkers. Employees can return to work after surgery or illness more quickly. Employees who suffer chronic pain can work more comfortably at home.
Expanded talent pool
A telework program enables businesses to hire employees anywhere without relocating them. Flexible and remote work options help keep Baby Boomers in the workforce longer, preserving their critical institutional knowledge. Finally, when the organization is has the technology to enable effective remote working, it also becomes easier to incorporate contractors and part-time talent for a cost-effective, scalable labor pool.
With fewer employees in the office, many businesses can significantly lower their real estate costs. You may be able to use workspace optimization strategies such as hoteling or free address to enable employees to reserve a space to work when they are in the office, allowing you to increase the employee-to-desk ratio and eliminate unneeded offices.
According to Global Workforce Analytics, the average real estate savings associated with a full-time remote worker is $10,000 per year. Plus you can save tens of thousands of dollars for every new hire that you don’t have to pay to relocate. Large, global enterprises are able to save millions of dollars by optimizing real estate costs.
Asure Software’s Workspace Management solutions help businesses optimize their real estate footprint to achieve more productivity in a rightsized footprint and reduce costs.