11 Ways Your Company Can Save Money Hiring Remote Workers
If you’ve ever suffered from the notion that remote work is for the likes of “stay-at-home moms,” you’re sorely missing out on some fascinating changes in the corporate world.
Did you, for instance, know that telecommuting is most prevalent amongst managers? Or that an average remote worker is more educated than an in-office worker? Professionals from the STEM industries make up the most significant number of remote employees?
As a matter of fact, remote work is “a very professional and viable option, and it’s not going anywhere” according to Sutton Fell, the CEO of FlexJobs.
And discerning businesses know this. FlexJobs saw a 20% rise in remote job postings across its boards, particularly in industries like real estate, HR, accounting, and finance. Just look at the below slide taken from the presentation Telework: Overcoming the Obstacles by Telework Research Network (TRN).
Image Source: Telework: Overcoming the Obstacles by Telework Research Network
Granted, your company may not be the size of Best Buy or Microsoft or HP. But the principles still hold. In your small- or mid-sized business, don’t you face issues like exorbitant rent, employees calling in sick or not engaged in their work, or having to keep offices closed due to inclement weather? Remote work solves these problems – almost in one fell swoop.
Let’s consider the variables that can save your company money by hiring remote workers.
- Remote Workers Are More Productive – Despite the raging debate whether remote workers are more productive than in-office workers, it has been found repeatedly that people work better when they have some peace and quiet. Open offices (which is what 70% of US offices are) decrease productivity by 15%. Businesses approximately lose $600 Billion a year due to workplace distractions, according to the TRN. There is no exact figure as to how much more productive remote workers are, when compared to office workers (because the correct answer is “it depends”). But in one survey by CoSo Cloud remote workers were 77% more productive than office workers!
- Remote work reduces absenteeism – The same survey by CoSo Cloud also showed that remote workers are 52% less likely to take time off work when sick. That finding is corroborated by another study from Softchoice, which showed that 57% of remote workers worked when ill and 44% worked on vacation. Smaller tasks like answering emails or phone calls, or completing urgent tasks don’t get put off even when remote workers are on vacation. Because they’d prefer to get it done immediately, rather than let everything pile up (and they already have the means to work from beyond their desks).
- Remote work decreases turnover – TRN research suggests that 72% of office workers are disengaged from their work. It’s one of the most significant ways businesses fall behind. According to Gallup, remote workers are somewhat more engaged (32%) compared to their office counterparts (28%). But because they save an average of $5000/year working from home, remote employees are more likely to stay with a company longer. They also put in longer hours (in the case of AT&T, five more hours per remote employee per week). And they spend a part of the time saved from commuting on work, such as Sun Microsystems employees do.
Image Source: Telework: Overcoming the Obstacles byTelework Research Network
- Remote work reduces healthcare costs – While working from open offices increases the probability of sickness, people working from home tend to get sick far fewer times. A survey from PGI showed that 82% of remote workers reported reduced stress and 80% better morale. Understandable – when the stress decreases and morale improves, health automatically follows suit. So as a small business owner, if you pay for your remote workers’ health insurance, your premiums will go down.
- Complete eradication of costs related to on-site injuries – According to the Occupational Safety and Health Act of 1970 (OSH Act), employers are responsible for maintaining a safe and healthy work environment. More importantly, injuries or accidents that happen in the workplace is the burden of the employer. Serious work injuries cost US businesses $59.9 Billion each year, according to the Liberty Mutual Workplace Safety Index 2017. As a small business owner, you’re liable to pay workers comp. But remote workers don’t have any grounds to file, except for rare cases.
- Remote workers mean no need for commuter benefits – Many businesses provide transportation and commuter benefits to its employees. It may be a fringe benefit, or in some cities (District of Columbia, New York, and San Francisco) employers may be required to do so by law. Either way, as of 2018, IRS announced that each employee could receive up to $260 pretax dollars per month to cover for transport. That is one thing you don’t have to worry about with your remote workers. If you’re a small remote business with only ten employees, your savings potential is $2600 per month!
- BYOD translates to no office equipment expenses – There is no mandate as to which equipment you should provide your remote employees with. You could provide them with a complete home office set-up, provide them with a few basics, such as laptop or smartphone. You could even offer a monthly allowance. But at the same time, you could go BYOD – bring your own device. Today 64% of workers already use their own tools at work. According to a Cisco study, 89% of businesses already allow their employees to BYOD, and for US businesses the estimated savings is an astounding $3150 per employee per year.
- Remote work means less money spent on continuity of operations – Any business worth their salt should have emergency contingency plans that’ll help it get back on its feet once disaster strikes. Even remote ones. But what’s at stake if all your employees work from one physical location is enormously greater. Be it as simple as a snow day when most of the office is out or something horrific like a terror attack – working from a single location can bring your business operations to a halt. Working from home, you’d still need security, IT back up, working smoke alarms and so on. But you wouldn’t need to spend thousands of dollars on insurance, secure HVAC systems, CPR training for large groups of people, or getting corporate buildings fire or earthquake ready. Remote work also ensures the safety of your employees.
- Remote work gives you the freedom to hire the right candidates – Possibly the best side effect of going remote is the ability to recruit candidates that’ll fit your company and carry out responsibilities with precision. Companies can spend anywhere from $1000 to $7000 per hire – that’s money you won’t get back if you don’t hire the right candidate. Small Business Trends says hiring the wrong person can cost you up to 27 times that position’s base salary. Shortage of talent is a pandemic that hiring managers have been battling in every industry, possibly more so in the technology sector. According to the 2018 Robert Half Technology Salary Guide, “the persistent shortage of technology workers is no longer just an inconvenience for many employers — it’s quickly becoming a significant business problem.” Well, it’s a business problem you can quickly solve by expanding your talent pool to include remote workers.
- Remote work can save you from the risky business of offshoring – What’s the best way to take advantage of all the benefits of offshoring without any of the risks? You guessed correctly, remote work. It gives you a chance at all the inherent benefits associated with offshoring – such as greater availability of talents at a fairer pay scale – without having to open shop in a foreign land or subjecting your business to geopolitical risks or international bureaucracy. The hidden costs of offshoring should make you think twice before you embark on a BPO. It’s estimated that offshoring can end up costing your business 65% higher than expected!
- Hiring full-time remote global workers is the best way your business can save money – The 2018 Robert Half Technology Salary Guide mentions that 44% of CIOs say they miss out on top talents because they cannot afford the expected salary. Tech salaries, which are some of the highest in the country, vary regionally. You can use the Robert Half Salary Calculator to figure out the exact number based on your location. But here’s what you’re looking at on average for 2018, according to Hired:
- SF Bay Area ($142K)
- Seattle ($132K)
- Los Angeles ($129K)
- New York ($129K)
- Austin ($118K)
- Boston ($118K)
- Washington, DC ($116K)
- Chicago ($113K)
- Denver ($112K)
- San Diego ($108K)
Compare that with the average software developer salaries from across the world.
Image Source: Daxx
And if you’re thinking, that’s all well and good for the IT industry, what about the rest. Here you go:
Image Source: Organisation for Economic Co-operation and Development
Based on the Organisation for Economic Co-operation and Development (OECD) data, US has the second highest average salary in the world. Kudos. That’s a loophole you can use to your benefit. You can choose to hire from practically anywhere in the world and still can pay less than you would your American employees.
As it happens, countries like Poland, Korea, Italy, Spain, New Zealand, and Finland have standout education programs, and you’ll be spoiled for choice as far as finding the right candidate goes.
But isn’t’ that bad…like promoting a sweatshop mentality, you ask? No, along with average salary, the U.S. also has one of the highest cost of living. Hence, a reduction in the wages of a prospective employee from another part of the world still lets you be fair to them. And, you know it, many of the countries where the average salaries are low, and the education standard is high, also happen to have lower costs of living than the U.S. This list includes Sweden, Canada, Germany, South Korea, Italy, and Spain and so on.
You may know that remote work is gaining incredible momentum with predictions slating it to become the standard way everyone will work in the not-so-distant future. But there are a few things you may not be familiar with. Here are some highlights from the 2017 State of Telecommuting in the U.S. Employee Workforce report:
- Remote work has seen a 115% increase in the USA since 2005.
- It closes the gender gap – 48% of remoter workers are women.
- Remote workers are older, have more graduate degrees, and make more money than the average worker.
- As a means of transport, telecommuting has grown faster than any other mode of commute.
Whether you like to look at the details (like the happiness of your employees) or look at the big picture (sustainable long-term plan for the planet) or only worry about your business (imagine the savings you’ll enjoy) – remote work is the answer.
If you’re ready to take the plunge and save your business some significant dough, we’re here to help. Write us or chat with us now.