Financial Benefits of Remote Work Beyond the Pandemic
By: Ernest Sampera on January 20, 2021
In early spring of 2020, the Coronavirus swept across the globe forcing lockdowns and seeing many businesses require employees to work from home heralding an unprecedented shift in the workplace unlike any we’ve ever seen. Had it not been for the pandemic, no one would have predicted it nor believed such a massive shift would have been possible. However, over the last year, the result of this transformation has become abundantly clear: employers from industries who previously shunned remote work are now lauding the benefits. In fact, according to a Gartner survey of 317 CFOs and Finance leaders in March 2020, 74% will move at least 5% of their previously on-site workforce to permanently remote positions post-COVID 19.
In contrast to what was anticipated, productivity levels increased. While increased productivity often translates to cost savings or efficiency, what also interested business leaders, specifically CFOs, were the additional cost savings associated with remote work. From small expenses like office supplies to larger expenditures like property rental or taxes, remote work can have a significant impact on company spending.
The benefits notwithstanding, we cannot fail to acknowledge that none of this would have been possible without technological advancement and readiness to facilitate what, for many, was a quick shift. There is little doubt and less debate about how a business’s IT agility will remain a driving force for long-term remote working.
How the Pandemic Has Accelerated Remote Working Trends
A good portion of the public, even some of those enjoying remote work options now, believe it to be a relatively recent phenomenon. However, over a decade ago, 40% of IBM’s employees were remote workers. Presumably, that remote work was possible for a few reasons, the first of which is the technological root of the work being completed, but what’s also possible is that, because of a demand for complicated skill sets related to computer programming, the workers just weren’t, geographically, where IBM needed them.
However, in 2017, during a slump in revenue, IBM called a good number of those workers back into the office. Deemed a failure, remote work just didn’t seem like a feasible option. Workers were unavailable when needed, and likely technology couldn’t keep up with demands for bandwidth, for data transfers, for applications, and costly hardware that would likely need to be provided for workers.
For years, some businesses, again largely those in the tech sector, experimented with formats for work from home and remote work options, but for a long time, that option was limited to specific roles, specific skill sets, and, as noted, specific industries that were uniquely prepared to handle that setup.
Flash forward to 2020. We all know how this turned out. The Coronavirus pandemic, with the need for people to stay socially distanced, came in like any other natural disaster and immediately changed the landscape. Suddenly, workers from across nearly every vertical, in every business, those deemed “non-essential” to our survival were asked to stay home. For many businesses, the challenges of remote work were thrust upon them. Without adapting, without enacting some kind of disaster continuity plan, many businesses would be forced to shutter.
Not only was remote work on the table, but for many CFOs, so were cost-cutting measures. To survive this kind of shift, as well as the market and consumer spending, businesses were going to have to adapt, and quickly. Of course, remote work and work from home options became the norm and now has the potential to stay that way.
Will Remote Work Trends Transcend the Pandemic?
Nearly a year into the pandemic-induced closures, lockdowns, and isolation, business leaders and workers alike find themselves asking, will remote work trends continue once the vaccine has been widely distributed and the risk deemed low?
The truth of this is mixed. While there are some workers whose jobs will require a return to the workplace, primarily because of job function, businesses whose workers perform duties and tasks that can be handled remotely are considering both full and hybrid remote work options. As expected, those working with data and information, which can largely be handled by technology are more likely to continue to work from home.
At this point, executives and business leaders will need to weigh their options and gauge whether the long-term benefits of remote work outweigh any potential costs or risks. Given the information we have about both productivity and cost-savings, remote work, in some form, is likely to become a staple of the world economy.
The Long-Term Financial Benefits of Remote Working
In 2013, a study potentially, predicted productivity increases in employees working from home. That prediction has, reportedly, come to fruition. Workers, who also report increased satisfaction, even if Zoom calls are interrupted by family, pets, or external noises, are eager to continue to enjoy this perk. But, it’s not just the workers who are seeing benefits. CFO’s who are watching expenditures and seeing costs savings in multiple areas are, certainly, eager to investigate and capitalize on the financial benefits of remote work.
One of the biggest areas for potential savings is in overhead costs. Everything from office supplies, cleaning services, space rental or property taxes, has the potential for reduction. Many companies may find they need less space. In fact, some businesses may realize savings of up to $11,000 per employee with remote work options.
Potentially Reduced Healthcare Costs
With more time at home, many folks have re-invested in exercise regimes, been better able to monitor eating habits, and found stress levels lower due to a better work-life balance. While certainly the pandemic has had the opposite effect on many individuals as well, some suggest that relief from the pandemic might see a bigger shift to healthier lifestyle that could see lower healthcare costs.
Certainly pandemic restrictions lowered these costs immediately as travel restrictions were imposed. However, our recent reliance on video calls and conferences, as well as an understanding of how digital communication tools could be leveraged to foster relationships, expect travel costs to be analyzed more closely and trips limited to those which require a physical presence.
For many businesses, a cost that is sometimes overlooked is the cost of replacing and training new employees when employees leave. In fact, research suggests issues of attrition may cost up to $30,000. Further, remote workers are more likely to return to work quickly after medical events, reduces absences, and reduces potential for human resource conflicts which can, sometimes, be costly.
Over the long-term, other factors will also likely result in long term costs savings such as increased productivity and other secondary impacts such as improved customer service due to a happier workforce. Clearly, the potential financial benefits of remote work are significant.
Technology Readiness Empowering the Remote Workforce Shift
Early remote work adopters were in the technology industry, so it should come as no surprise that the primary facilitator of this shift across the globe has been the tech industry. With the accelerated adoption of cloud-based office software, business instant messaging, and audio/video conferencing tools during the pandemic, employers have the basic tools to enable communication and collaboration for a remote team.
Available technology certainly saved the day for many businesses, enabling most work functions to happen regardless of staff/team locations. Further, the drive to online business and transactions meant an even greater demand on IT infrastructure. Businesses using scalable solutions, like data centers and colocation services, were uniquely positioned to respond to those growing demands or a remote workforce and the uptick in online traffic.
Simplify Your Shift to Remote Working with vXchnge's Cutting-Edge Colocation Services
If your business is interested in realizing some of these financial benefits, or capitalizing on the societal shift to online transactions, interactions, and application, or simply looking to be prepared for how this online shift may drive security needs or concerns, then colocation services may be right for you.
While the shift to remote work has certainly been a boon in some regards, it will not be without its challenges as well, growth and security first among them. If you’re ready to talk about how colocation services can help you meet those challenges, let’s talk today.
About Ernest Sampera
Ernie Sampera is the Chief Marketing Officer at vXchnge. Ernie is responsible for product marketing, external & corporate communications and business development.