Right now, you’re more than likely asking yourself: How can I cut costs for my small business?
Finding smart ways to reduce expenses will not only help your business recover in the short-term, but it will also mean leaner, more profitable operations in the years to come.
One result of our communities’ efforts to “flatten the curve” was an unprecedented wave of remote work. For some businesses, their services, business model, and technology made it an easy transition. For others, it meant abandoning certain products or services and innovating to maintain cash flow.
The abrupt social distancing was not an ideal way for businesses to experiment with remote work. Yet, it has helped some discover whether telecommuting could offer significant cost savings — even after the threat of COVID-19 passes.
But what are those cost savings, and are they worth the dramatic change in operations?
Below we’re sharing the most significant financial benefits of a remote workforce. By weighing the financial savings and culture costs of remote work, you can determine whether going remote is an opportunity worth taking.
Save on Office Space Costs
The most obvious benefit to a remote workforce is the ability to downsize to a smaller office space — or even no office space at all. Rent and utilities are often the largest fixed expenses for many businesses. To reduce the size needed for your office, you could allow some employees to work remotely full-time. Or, you could offer rotating work-from-home days for employees, combined with a hot-desk policy in the office (where desk space is for anyone’s use and not assigned to one employee).
Yes, it has been more or less scientifically proven that productivity does not decrease when employees work from home. It’s actually shown to increase.
A two-year study by Stanford professor Nicholas Bloom set out to find the proven effects of working from home. Bloom conducted the study with a large Chinese company that was looking for a better solution to sky-high office costs in Bejing. The 500-employee company was divided into two groups: employees who continued to work from the office as usual, and employees who only worked remotely. After two years, the research showed that the group of “telecommuters” had a productivity boost equivalent to a full day’s work when compared to their in-office counterparts.
And that’s not all: telecommuters also had lower employee attrition (by 50 percent!) and were found to take shorter breaks, have fewer sick days, and spend less time on vacation.
Think about all the costs that go into keeping your office going. Stocking up on break room necessities, replenishing office supplies, and replacing office furniture adds up. Offices require constant investment. With fewer employees or less hours in the office each month, you can cut down on these expenses.
A Tempting Benefit
Incorporating remote work into your operations can be a tempting benefit when hiring — one that doesn’t cost you extra to offer. In some cases, it’s such a valuable benefit that people are willing to take less pay in exchange for it. In fact, 34 percent of employees are willing to take a pay cut in exchange for remote work. When evaluating annual raises or new hire needs this year, the incentive of remote work may be an economical solution.
An Investment in Retention
When employees must relocate for personal reasons, you can lose a valuable member of the team. But, by implementing a remote schedule for trusted employees, you ensure their career with your company doesn’t end when life happens. In addition, many Millennials and Gen Z professionals look for flexibility when it comes to their career. A company that offers the flexibility for employees to relocate may better retain younger employees who can grow and develop as leaders within the business.
Studies show significant financial and productivity benefits to a partial or complete remote workforce. While a shift to remote work presents a significant culture shift for lots of businesses, the weeks of quarantining may have provided a crash course in a new kind of culture.
Could your business save money by incorporating remote work? Are you ready to take on a new way of doing business in 2020?
The financial experts at Pine & Co. help small businesses like yours cut costs and increase profits through sound financial strategy. Call or contact us today to better understand what remote work could mean for your financial future.