We recommend checking out our previous piece titled “Eleven Ways Your Business Can Save Money by Using Remote Employees” to discover how adopting a remote working model can boost your company’s profitability. Furthermore, we elaborated on how partnering with us can connect you to top-notch talent with ease.
Embracing remote work has a plethora of advantages in the long run. By allowing most employees to work from home, the dependency on a physical office is lessened considerably, if not completely eliminated, leading to a significant reduction in operational expenses tied to maintaining a workplace.
While it’s crucial to take financial calculations into account when evaluating the gains of a project, other aspects should also be considered to determine return on investment. For instance, the initiative may bolster the brand’s reputation or lead to higher commendations for corporate social responsibility endeavours. Although it may be challenging to measure them, the value of these outcomes is just as significant.
If you’re still uncertain about the advantages of remote work for your enterprise, here are some additional remarkable chances for cost-cutting to ponder.
Eliminate the need for expensive office space:Renting office space is one of the most significant expenses for businesses. As property is a highly coveted commodity in the US, office space costs vary widely across the country, as demonstrated in the chart below. An employee’s workspace could amount to anywhere between $1.74 to $6.16 per square foot annually, averaging $14,800. However, if a cap of $5,000 is set on this cost, this data visualisation provides an overview of the currently available market value. With remote work becoming more prevalent, a physical office is no longer a necessity, and this expense can be eliminated, allowing businesses to reduce their overhead costs.
Projected office rental rates in the largest US cities for 2023
No office means no expenses for utility bills:Water, heating, electricity, waste disposal, recycling and Wi-Fi are indispensable amenities required by all commercial properties. Even though landlines may seem outdated, they can still be useful and hold sentimental value for some. As per recent studies, companies situated in the Mid-Atlantic area of the United States pay an average of $722 per month for their electricity bills.
Paying for a business parking spot can be a significant expense:If no one is physically occupying the workplace, a parking lot is unnecessary. Even the restrooms and kitchen will not be needed. All the fixtures in the building, including elevators, restrooms, stairways, and landscaping, are not owned by you. Though your lease may cover routine maintenance of shared areas, you may also be responsible for more expensive upgrades such as new windows. Such expenses can be overwhelming for small business owners, as an unanticipated cost of £5,000, even when shared among all tenants, can be catastrophic.
Minimize or eliminate all office-related expenses:Every business incurs various overhead costs such as computer equipment, printers, salaries of non-revenue generating staff (e.g., janitors and maintenance workers), and office meals, which must be taken into account. Although some of these costs may qualify for tax deductions, they still need to be paid. The Operational Expenditure Ratio (OER) represents the proportion of revenue allocated towards covering operating costs. While remote work can reduce operating expenses, it cannot eliminate them entirely. However, cutting your OER in half can result in a significant increase in your company’s profits.
Large Corporations Have Saved Millions by Abolishing Physical Offices
Companies can benefit from substantially reduced tax rates:Like any other organisation, small businesses are obligated to comply with various types of taxation. Luckily, the Business Property Tax that is based on the property’s value is no longer applicable as the company is now operating remotely. Moreover, the portion of your home’s space utilized for business purposes can be subtracted from your taxes. Furthermore, those who don’t have to commute for work may be exempt from paying the Excise Tax.
Expand your company with minimal added expenses:If you choose to expand your business through traditional means, you will eventually have to bear the costs of acquiring additional premises or land, along with expenses such as construction, security and ongoing maintenance. This will have a continuous impact on your finances, and it may seem as though the world is penalizing your success. A cost-effective and alternative solution is hiring staff remotely. By doing so, you can recruit as many employees as you’d like without incurring any additional expenses, apart from the one-time cost of adding them to your remote project management software.
Benefits of Telecommuting Towards Your Company’s Social Responsibility
In today’s world, Corporate Social Responsibility (CSR) is a crucial factor for businesses to consider, regardless of their size. Even if remote work cannot be formally incorporated into your CSR strategy, it can still contribute to making your company more ethical. Ultimately, this can position your business as a more progressive organization, attracting top-notch employees and dependable business partners. As per the 2023 Robert Half Technology Salary Guide, 34% of employers offer telecommuting, while 62% offer flexible scheduling.
Distant work can benefit local economies and promote social cohesion:There are significant opportunities when you are not limited to recruiting locally, and when your employees do not have to endure long commutes. Rural and suburban areas may offer a wealth of qualified candidates. Once these remote workers are hired, they become legitimate taxpayers, promoting economic activity by spending money at local businesses. Remote workers do not have to commute to cities, which can help to reduce rural-urban migration, while also fostering rural expansion and development.
Remote work may be a potential path towards a sustainable future.
The Image’s Creator: Telework Research Network
Remote work contributes to environmental sustainability:As a result of fewer people commuting on a daily basis, we can expect to see a decrease in oil consumption, greenhouse gas emissions, traffic congestion, and road damage. The Traffic Research Network (TRN) reports that for every vehicle taken off the road, traffic congestion is reduced by a factor of three. This domino effect of remote work has a remarkable impact; for example, reducing paper usage alone could offset the emissions of 279,000 motor vehicles and waste produced by 44,000 garbage trucks.
Experience several intangible benefits:It’s challenging to precisely quantify the monetary value of all the benefits remote work can offer businesses. However, companies may see a sizeable return on investment (ROI) resulting from these changes. According to the “The State of Telecommuting in the US Employee Workforce” 2023 report, there are also several intangible advantages associated with telecommuting, including but not limited to:
- Expand the available pool of workers and aid in filling skill gaps.
- Optimize available space.
- Enhance your company’s flexibility and adaptability.
- Reduce the time spent commuting to and from meetings.
- Foster employee participation and involvement.
- Reduce the cost of technological advancements.
- Lowering employee stress levels.
- Reduce the conflict between work and personal life.
- Prevent brain drain.
- Enhance creativity and innovation.
- Emphasize productivity rather than attendance in employee evaluations.
- Save filing cabinet space by reducing paper consumption.
- Expand without increasing their impact on the environment.
- Decrease or eliminate funding for parking and public transportation.
- Avoid environmental fines and compliance expenses.
- Strive to attain recognition as an employer of choice.
- Explore solutions for accommodating parking shortages.
- Enhance the company’s public image.
It’s high time to consider the benefits of remote work for your organisation, whether it’s for financial incentives or to exhibit greater social awareness. Don’t assume that it’s just a passing fad or that it only applies to larger corporations. According to the findings of the 2023 report on telecommuting in the American workforce, medium-sized businesses are 75% more likely to provide remote work as a full-time (8%) rather than a part-time (2%) option.
The evidence presented in this report, as well as our prior report, confirms that the current situation is highly beneficial and your counterparts are already reaping the rewards. Thus, we encourage you to get in touch with Works without delay, so that we can commence progress.