Reducing Overhead and Increasing Productivity by Having Employees Work from Home

We live in a society that is more connected than ever before by mobile phones, the Internet, and Wi-Fi enabled devices. All of these factors help the average working adult to stay up to date on projects, take advantage of meetings on the go, and get information at lightning speed without having to set foot in a traditional office cubicle. Therefore, it makes sense that many organizations are turning to remote workforces to save costs while increasing productivity at the same time.

Working from Home Benefits

There are many obvious benefits of allowing at least a portion of your staff to work from home offices, an arrangement often referred to as telecommuting. With some 2.8 million people working from home as of 2012 a majority of the time (Telework Research Network), this can be ideal for any business to gain a competitive edge in the market.

Some of the benefits of allowing a work from home business model include the following:

Greater staff productivity

Numerous studies have shown that when employees are happy, they are far more productive than their counterparts. A Gallup poll showed the correlation between employee engagement and the overall financial outcome of the businesses worked for. Polling over 150 organizations, the findings were that “Actively disengaged employees erode an organization's bottom line while breaking the spirits of colleagues in the process. Within the U.S. workforce, Gallup estimates this cost to be more than $300 billion in lost productivity alone.” (Gallup)

Businesses that make concerted efforts to increase the satisfaction levels of their staff are building upon a more sustainable business model with employees who are actively engaged in the overall success and growth of the organization. A Towers Watson employee engagement study of showed that 25 companies with 300,000 or more employees were performing at 27 percent higher margins than their competitors even while the economy was sluggish, due to increased focus on engaging the workforce through rewards that included the ability to work remotely. (Towers Watson)

Reducing overhead costs

Telecommuting can also significantly reduce overhead costs for both a business and the employees. When you consider the average costs of maintaining an office space, from rental fees and utilities to on-site vendors and cleaning, this can be a huge cost factor for any business. Then there are the costs of transportation, which on average cost employees’ $25-50 per week just for gasoline or public transportation fees. Allowing your workforce to work from a home office could save your company “nearly $8,000 annually for each telecommuter”. (Lister and Harnish)

These savings add up to millions in dollars that could be used for improved employee training and benefit programs, wellness initiatives, and capital investment in the growth of the organization.

What does it cost to get an employee started as a telecommuter?

A home office set up is relatively inexpensive as compared to a traditional office. This generally includes a home office desk, combined with a telephone and Internet service installed. Reliable computers and fax machines are a lot less expensive than in the past. Total estimated costs for a new home office would be somewhere in the $1,000-2,000 ballpark range. An added bonus is that employees can write most of these costs off on their individual tax returns, including their office portion of their mortgage/rent and office supplies.

Better managed recruiting and training

Perhaps one of the areas that can be a major cost savings for any business, and a benefit to employees too, is being able to hire home workers who are independent contractor status. This allows companies to hire professionals from a wide range of backgrounds and skill-sets to work on projects either short term or long term, depending on the fluctuations of the market. This eases the recruitment process, as well as allows for virtual training vs. in-house development of employees.  It reduces the liability for employees in terms of healthcare benefits, which is something that has come about as a result of Healthcare reform in the USA.

There are clearly multiple benefits of allowing at least a portion of your workforce to manage their duties from a home office. Obviously, this is based on the type of business you have, and the requirements of each job type. Find a way to allow for telecommuting in your workforce to reduce overhead costs and provide more work-life balance for a highly productive team.