Study: Employers could save $11,000 per remote worker
A remote work force could save employers almost $11,000 per employee each year for a worker telecommuting an average of 2 1/2 days a week, according to a new study. Seen here, passengers at the Ronkonkoma LIRR station on March 10, 2020. Credit: Newsday/Johh Paraskevas
U.S. businesses compatible with remote work could save almost $11,000 per employee each year if workers telecommuted an average of 2 1/2 days a week, a new study says.
The report, from San Diego-based consultancy Global Workplace Analytics, also found that part-time employees could net an average of $3,000 per person per year based on lower costs for transportation, meals and work clothes.
That figure reflects the higher expenses associated with working at home such as home energy costs.
Richard Vogel, dean of the Farmingdale State College School of Business, said that the $11,000 in savings "sounds like a reasonable figure," though a remote workforce could require some companies to bolster IT services.
Employers' savings are based on factors including: increased productivity; reduced office costs, lower absenteeism, and reduced turnover, the report said.
For instance, the study estimated part-time remote employees devote an extra 26 minutes per day to work time by eliminating the average 55-minute round-trip commute.
The report also estimated that workers have fewer interruptions at home (43 minutes a day versus 78 minutes at the office).
The study assumes an annual cost per employee of $99,000 in salary, benefits and taxes. Based on a 15% increase in productivity over 125 workdays a year, employers would reap $7,430 per worker, according to the study released Tuesday.
The study also estimated that employers could save by trimming office space by 25%, a $1,935 annual savings per half-time remote worker.
Kate Lister, president of Global Workplace Analytics, said the COVID-19 pandemic has forced the issue of remote work.
Before the pandemic, she said, about 7% of companies offered the "privilege" of remote work to higher-level employees.
"It was always a matter of trust," Lister said. "Now … people are forced to do it and companies realize we're not [merely] as productive, we're more productive."
Still, she said, major companies will not go completely remote.
"Half time is best," Lister said, providing engagement with the corporate culture in the office and productive time at home.
An indirect societal benefit from remote work is lessened pollution from commuters, Lister said. "In a matter of weeks, we've seen cleaner air."
Vogel said that his commute to Farmingdale State is 14 miles a day, which could take from 15 minutes to 45 minutes.
"The fact that I'm working at home means I'm saving at least one hour a day," he said.
The new car he bought in September has been barely broken in.
"I've put gas in it twice," he said.
The study was based on a database of business case studies and a Telework Savings Calculator on the web site of the consultancy.
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Remote Working By The Numbers
--$11,000: Employers' annual savings for average U.S. worker who telecommutes half time;
--$3,000: Employees' annual savings by working remotely an average of 2 1/2 days a week;
—78 minutes: Daily interruption time in the office (versus 43 minutes at home);
—26 minutes: Extra time spent working instead of commuting.
Source: The Business Case for Remote Work by Global Workplace Analytics
Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.
