Mass adoption of remote work could result in a $700 billion economic benefit
Friday, July 24, 2020
The pandemic has forced many employees to work from home. And even when the coast is clear (although it might not be clear for a while), some employees will continue to work from home.
Opinions are mixed. While some people enjoy rolling out of bed and going down the hallway to work — often in an unshaven and partially clothed state — others long for the camaraderie and social interactions of an office setting. And, admittedly, some parents pine for a child-free work environment.
Personal preferences aside, working from home can provide numerous economic benefits. According to Kate Lister, president of Global Workplace Analytics, a research-based consulting firm, over 100 million employees are currently working remotely. And the longer they work from home, the greater the rates of adoption will be. “By the end of 2021, we think that 25% to 30% of the total workforce will be working from home multiple days a week.”
And Lister says working remotely is advantageous to both employees and companies.
Benefits to employees who work remotely
“Employees save three of their most precious commodities: time, money, and health,” Lister says. For example, she says employees save an average of 11 workdays a year — that’s the total time they would have otherwise spent commuting.
“They save between $2,500 and $4,000 a year, primarily as a result of reduced costs for transportation, parking, and food.” And in larger cities, she says this amount could be much higher. It’s less wear and tear on their vehicles, and they’re also spending less money on fuel. By being at home, they’re not paying parking fees. Also, employees tend to eat out at work — and often stop to grab breakfast before work and pick up dinner after work.
Granted, employees are also spending money by staying at home all day. “However, our estimates are net of additional energy costs and home food costs,” Lister explains.
“In addition, research repeatedly shows that being able to work from home reduces employee stress and for some, improves their diet and exercise,” she says. To be clear, some workers may be experiencing more stress with their kids home from school. In addition, some workers don’t have the level of privacy or space needed to work from home, which can cause a greater level of anxiety.
But if these issues are addressed, working from home should indeed be less stressful for several reasons. The daily commute can often be the most pressure-filled part of the day. Dealing with various office personalities can also take a toll, as can a boss breathing down an employee’s neck. Not having to deal with these issues can positively impact an employee’s mental health.
Global Workplace Analytics has also created an Employee Savings Calculator to help workers calculate their own savings.
Benefits to companies when employees work remotely
As much as working remotely is advantageous to employees, the benefits to companies are substantial.
“They include increased productivity, better employee engagement, lower absenteeism, lower turnover, the ability to reduce office space, and improved resilience,” Lister says. “In total, an average employer can save $11,000 per half-time remote worker per year.”
And the lower attrition rate is significant. “In fact, 36% of employees would choose telecommuting over a pay raise, and 80% consider telecommuting a perk,” she reveals. Among companies that provide work from home options, 46% say it has reduced attrition, and 95% say it has a high impact on employee retention.
Remote work can also reduce unscheduled absences. “Unscheduled absences can cost employees $1,800 per employee per year. But companies that implemented a telework program saw a 63% reduction in unscheduled absences,” Lister says.
In addition, when employees work from home, Lister says they tend to work even when they’re sick, and return to work faster after having surgery or a medical issue. And employees can shift their schedule to run errands without losing a workday.
Companies can calculate their own savings here.
But is it for everyone?
However, this doesn’t mean that all employees want to work completely remotely. “Only 19% in North America want to say goodbye to the office forever (16% globally), with most preferring a bit of both,” Lister says. “Half of the time in each place seems to be the sweet spot in the U.S. and slightly less in Europe.”
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