Remote Work Could Help Increase Profitability for Your Business
Companies started to embrace working from home more since 2005, and since then, its popularity has increased significantly. In fact, in 2020, 3.4% of the U.S. workforce is working from home at least half of the week. This number is likely to be higher now since many companies have adopted a remote work model to be able to keep their operations running as we get through the Covid-19 crisis.
There are many reasons why employees appreciate working from home, but remote work also offers many benefits for employers, including a potential profitability increase thanks to cost savings. Here are some of the ways remote work helps you save money and build profit margins:
Lower Turnover Rates
Losing long-term employees is costly for companies. Employees who work from home are more satisfied with their job, thanks to all the benefits they experience under this work model. It has a direct impact on attrition or turnover rates, which leads to reduced costs in recruiting, hiring, and training of new employees. A study concluded that 46 percent of companies that offer telework had experienced lower attrition rates, while 95 percent confirm remote work improves employee retention. CiscoSystems implemented a remote work policy, which has been in place over the past decade, to retain talent and increase employee happiness. They have reported that thanks to this policy, they save $277 million every year.
Lower Operating Costs
By allowing your employees to work from home, you can save a significant amount in office supplies and even office space every year. You could rent a smaller office or building, and have employees rotate areas rather than having a desk for each employee. This approach could potentially save you $11,000 per employee on average, a study showed.
On-site offices are generally full of distractions, from colleagues stopping to chat to voices from other people’s conference calls, and everything in between. In contrast, home offices are likely to be more controlled environments where people can make themselves comfortable and have to ability to move away from distractions if needed. Working from home also means employees don’t have to deal with morning traffic, which helps minimize tardiness. In general, remote work can help you save valuable time to put toward productive tasks. American Express found that after implementing a work-from-home policy, their employees increased their business output by 43 percent and managed 26 percent more calls.