Could Remote Working Save Your Company Money?

With Covid-19, it can feel like remote working has been imposed on your business. However, it’s worth thinking about the benefits that remote working can bring. Importantly, within the context of the financial pressures businesses are facing, it’s encouraging to know that remote working can save your business money.

There are two main tenets to this principle: cutting costs and increasing productivity. There is a smattering of other positive money saving elements, and we’ll cover these, but it’s this wonderfully double-edged sword of cost savings plus productivity that means we really need to sit up and pay attention to the remote working phenomenon.

And we don’t just have coronavirus to thank for remote working. Yes, it’s put some rocket fuel into the acceleration of remote working practices, but it wasn’t the driving force behind its emergence .

Back in 2017, when Covid-19 had yet to send seismic shocks across the globe, it was predicted that 50% of the UK workforce would be working from home by 2020. We did indeed nearly hit 50% of us working from home at the height of lockdown in April 2020. The remote working revolution, without Covid-19, has been slower than predicted, but it is still a notable change in our working landscape.

Covid-19 is undoubtedly bringing some of the toughest financial challenges businesses have ever faced. However, in amongst this is an opportunity with remote working. You need to secure your company’s financial health in 2020, and remote working is one weapon in your arsenal.

The reasons that remote working saves businesses money

As we say, there are two main reasons behind remote working saving money:

· Cost savings

· Increased productivity

However, we need to dive into these concepts to truly understand why they occur, and how we can maximise their potential.

Cost savings of remote working

There are some costs which you can save when remote working is employed.

· Premises

The enormous overhead of premises is perhaps the clearest cut. If your entire workforce can be remote then you simply have no rent, rates, utilities and other premises-related overheads to pay. For service-based industries it is often possible to move entirely remote thanks to the connectivity potential of cloud-based technology. As the New Statesman coined, “work is a thing you do, not a place you go.”

Remember, connectivity is a low cost affair. There really is very little difference in those costs of having premises versus remote workers on connectivity grounds. Even if you still need a physical site, with those who can work remotely doing so, those premises can be smaller. It won’t cost you more to connect them to each other.

· Cost of workers

This brings us onto the next cost saving of remote working. There are a number of ways that workers can cost you less when they are remote.

You aren’t limited by location. You can employ workers from anywhere. You don’t need to pay to cover expensive commutes to expensive city centres, or to cover lunches and coffees for all those internal meetings. You spend less on office supplies.

Realistically, if you can’t justify a full-time permanent employee, you can still get the service you need. You can hire consultants and freelancers to get the work done without the painful associated costs of a permanent member of staff.

· Absenteeism

Absence costs the average UK employer a huge amount. The CBI estimated the total annual costs of absence in the UK as £11bn. The CIPD puts it at £522 per employee.

Those sharing offices are more likely to be ill than those who don’t. They eat more healthily, get more sleep, are less stressed, exercise more, have better relationships, are able to maintain a better work-life balance. In short, they are healthier.

This all adds up to the fact that remote workers take less sickness leave.

· Lower recruitment costs

With remote working, your recruitment costs can be notably lower. The primary reason for this is staff retention. In other words, you don’t need to hire as frequently because your staff are more likely to stay.

Remote workers have a 25% lower turnover rate than on-site employees. The average cost to hire a new employee is £3000.

Increased productivity

The other big factor in using remote working to save money is more accurately about the better making of money. Remote working can improve productivity. Again, this happens due to a number of different reasons. The BBC reports that working from home increases productivity by 13%.

· More effort

Research shows that nearly three-quarters of employees put in more effort when working from home.

· More hours

The same pre-Covid research shows that 39% of homeworkers work extra hours. They are also more inclined to use some of the time they spent on the commute for work instead.

· More focus

Anyone who has worked from home knows that, generally, there are fewer distractions. You can focus more easily. No one is stopping by your desk for a quick chat and there’s no background noise from your colleague on the phone.

· More diversity

With remote working you can more easily hire a more diverse workforce. Increased diversity is mirrored with increased productivity.

· More satisfied

It turns out that remote workers are more satisfied in their work and happier than their onsite counterparts. Satisfied employers give more. They are loyal, engaged and invested in their work.

Remote working doesn’t guarantee cost savings

It’s important to note that the plethora of enticing factors above don’t just happen because you nominally introduce remote working. There are ways to maximise the benefits, and ways to lose out too. It needs to be a conscious and deliberate business approach.

At Plummer Parsons, we go beyond accounting to offer business management advice to startups and small businesses. Our experts can help you to capitalise on the cost savings and increased productivity of remote working, while avoiding the pitfalls.