How far does your money go when you hire a remote worker versus an in-office worker? What if you hired someone from outside the US?
We’re calling it the remote job parity; it’s our version of the Big Mac Index. And we’re jumping into the deep end of this topic to figure out whether hiring remote workers is worth it for your business.
We’ll consider factors common to most businesses – from productivity to cost-to-company. Then, we’ll see how the numbers stack up for in-office workers VS remote workers.
If you think we’ve missed an important factor, please let us know.
How Remote Workers Fare Next To US In-Office Workers
- In-Office Workers: According to the Bureau of Labor Statistics, an average American works 8.8 hours every day. But they’re productive for only 2 hours 53 minutes!
- Remote Workers: Studies from CoSo Cloud Solutions and US News and World Report says that remote workers put in 6-7 hours more than onsite workers.They also put in more effort.
- In-Office: This Harvard study reveals that 16% of in-office workers say their work environment distracts them, reducing their productivity. Everything from loud colleagues to phone calls leads to $1.8 Trillion in productivity loss in the US!
- Remote: A study from Sure Payroll shows that 2/3 of employers surveyed said their remote workers are more productive. They also work during vacations, on sick days, and return to work early from breaks.
- In-Office: For onsite workers, managers may be there all the time, but they aren’t available, and there is not much engagement.
- Remote: Gallup’s State of American Workplace Report shows that remote workers have the highest return on engagement. Because though they work outside of the office, they “meet” with their managers and colleagues regularly.
- In-Office: There is such a thing as collaboration overload, and Harvard says in the last 20 years, such activities have increased by 50%. But only 3-5% of employees, who are known and willing to help, actually contribute to collaborative projects.
- Remote: When it comes to collaboration, Harvard skews on the side of online. One reason it cites is that digital collaboration accommodates different working styles, allowing everyone to contribute, and thus engaging the whole team and getting better responses.
- In-Office: Often, managers are forced to fill a position with less-qualified people when employees leave, permanently or temporarily.
- Remote: Remote work is bringing more qualified people into the fold. People in retirement age are bringing their expertise to remote roles. Busy parents, who’d otherwise have taken years off, are continuing in their jobs remotely – and causing less disruption within a company.
- In-Office: Work, in general, has become digitized. Some employees struggle to keep up with the new ways of doing things.
- Remote: Remote work is fronted by digital natives, Millennials and Gen Z, and it makes sense that they come up aces as far as tech skills go. Using remote tools, communication tools, video conferencing, file sharing is second nature to remote workers.
- In-Office: The factors that make us human – the ones that supposedly help person-to-person communication – sometimes gets in the way of clear communication. Lack of confidence, stereotyping, body language, not paying attention – all affect office communication.
- Remote: Remote work wouldn’t flourish without remote communication tools. And because the bulk of distributed team interactions are happening on these platforms, they’re trackable, streamlined, fast, and easy.
- In-Office: When hiring a developer, the most suitable one may not live close to your HQ. And when you hire from out-of-town, you’ll incur extra expenses, like moving cost.
- Remote: If you paid an employee less money for working remotely, you’d be discriminating. But if you open up your employee talent pool to anywhere in the world, you’ll be paying a lot less in salary. Consider Java programmers, for instance. A senior programmer in the US makes $137K. In Sweden, $78K, Australia $70K, Spain $58K.
Cost to company
- In-Office: Having employees at the office increases overhead costs – from small perks like commuting stipends to the much bigger health insurance premiums.
- Remote: Companies can save in so many ways with remote work, as we’ve covered in details here and here. Besides, there are many indirect savings. A survey from FlexJobs found that 77% of remote employees are healthier, thus saving their employers money in healthcare premiums.
- In-Office: The lack of flexibility, missing out on important personal milestones, commuting, being stuck to a chair most of the day – all contribute to stress and the poor health of office workers.
- Remote: Work-life balance is difficult to achieve even for remote workers. But here’s the kicker – they have the opportunity and the flexibility to do so, unlike their in-office counterparts. Many studies corroborate this, including the State of Remote Work study fromTINYpulse/Owl Labs that states that 51% of remote employees have better work-life balance in their remote roles.
- In-Office: Employers are susceptible to losing one in four employees, and it’ll cost US employers $680 Billion by 2020, according to the Work Institute’s Retention Report.
- Remote: A study from Stanford suggests that remote workers are 50% less likely to quit than onsite workers. The survey fromTINYpulse/Owl Labs also mentions that companies that have remote workers have a 25% higher retention rate.
So, how many remote workers are equivalent to in-office workers? Just from a salary point of view—($137/$70K)—it’s about twice as many. But that’s oversimplifying because the potential contribution that an expert candidate can make in a diverse team is immeasurable.
One thing that is very clear from this exercise is that remote workers are above par to in-office workers in every respect. It also justifies why companies are continuing to embrace remote work. If you still have any doubts, please reach out.