A year ago, the daily commute to work for Wendy meant spending about an hour in traffic on average. By the time she got to work, she would be tired already, something that negatively affected her productivity. She really hated this morning commute.

Fortunately, Wendy doesn’t have to deal with the hectic commute anymore. Nowadays, her commute to work takes about a minute – the time it takes for her to saunter from her living room to her home office.

This is because Wendy was able to convince her boss to allow her to work from home. After all, most of her work can be done remotely. She only needs to go to the office about once a week.

Like Wendy, working from home is quickly becoming a reality for a growing number of people in the world. According to a report by Owl Labs, 30% of the US workforce works remotely full-time, while 48% of the US workforce works from home at least once per week.

The increasing shift to remote working has been driven by factors such as technological advancements that have made it possible for people to do their work without having to be physically present in the office, as well as the growth of the on-demand economy, which chiefly comprises freelancers, consultants, contractors, and the self-employed.

With the Coronavirus pandemic that has taken the entire world by storm and disrupted the economies of most countries, even more companies have started embracing work-from-home arrangements as governments across the world implement stringent measures – including lockdowns and banning of gatherings – to help deal with the pandemic.

When it comes to conversations around working from home, most people are only aware of the benefits to employees. However, working from home can benefit employers as much as it does employees. Some of the benefits of remote working for employers include:

REDUCED COSTS

Operating physical working premises is not a cheap affair. You have to deal with expenses like rent for the office space, electricity costs, water bills, and so on, which eat into your company’s profits.

Allowing your employees to work from home allows you to save on many of these costs.

For instance, while you might not be able to completely eliminate the need for office premises, you won’t need as much office space, which means you can move to smaller premises where the rent costs are much lower.

Having your employees working from home also allows you to save on furniture costs, since you won’t need as much furniture as you would have with everyone working in the office.

Even if your employees are not working from home on a full-time basis, you can have an arrangement where two or more employees can share the same furniture by coming to the office on different days.

With less employees needing to come to the office, other expenses like electricity bills, water bill, phone bills, cost of tea and break room snacks, and so on will also go down.

Allowing your employees to work from home also allows you to save on the cost of equipment and technology maintenance. Employees who work from home typically use their own computers and devices, which means that the cost of this equipment will not be on the company.

According to a report by Global Workplace Analytics, having half the workforce in the United States work from home half the time would lead to savings in office premises rent costs, electricity bills, employee turnover and absenteeism amounting to about $11,000 per employee per year, or about $500 billion cumulatively in annual savings.

REDUCED EMPLOYEE TURNOVER

Employee turnover is a huge problem for businesses, especially small businesses that do not have the financial muscle to compete with larger companies when it comes to offering better salaries and better employee benefits and perks.

According to the Society for Human Resource Management, the cost of replacing an employee is, on average, equal to the employee’s salary for about six to nine months. This means that if you have an employee making $60,000 a year, it will cost you between $30,000 and $45,000 to replace them when they quit.

This is because of the costs associated with hiring a new employee (fees paid to external recruiters, advertising costs for the vacancy, interview and post-interview costs, signing bonuses and relocation expenses), training them, and the opportunity cost of lost productivity while the position remains vacant.

With employee replacement costs being so high, it makes sense that reducing employee turnover is a priority for most businesses. Fortunately, allowing your employees to work from home can help you improve employee retention.

There are several reasons why working from home arrangements can lead to increased employee retention.

First, allowing your employees to work from home leads to improved work-life balance. Employees also don’t have to deal with stressors like long daily commutes. Allowing your employees to work from home also shows that you trust them.

All these lead to increased employee satisfaction. Satisfied employees are less likely to want to quit their jobs.

According to a survey conducted by Amerisleep, employees who work from home are 57% more likely to be satisfied with their jobs compared to the average American worker.

82% of employees say that being allowed to work from home would lead to increased loyalty to their employers. Studies also show that employee turnover for companies allowing their employees to work from home is 25% lower compared to that of companies that do not allow employees to work remotely.

INCREASED PRODUCTIVITY

One of the main reasons why working from home is not as common as it should be is the fact that a lot of employers believe that allowing their employees to work from home would end up making them less productive.

They assume that without someone to watch over the employees’ shoulders, the employees will engage in personal activities at the expense of their work.

Companies that have experimented with work from home arrangements have found out, however, that allowing your employees to work from home can actually lead to increased productivity. Don’t believe it? Check out the following studies that came to the same conclusion:

According to a survey by Canada Life, employees who work from home rate their productivity at 7.7 out of 10, compared to 6.5 for employees working at the office.

A survey conducted by researchers from Stanford University found that working from home leads to a 13% improvement in productivity compared to working in-office. This is almost equivalent to an extra day of productivity every week.

This study reports that 53% of employees working from home are willing to work overtime, compared to only 28% of those working in-office.

According to the same study, 45% of those working from home report being able to get more work done in less time, while 44% say there are less distractions when they work from home.

There are several reason why working from home allows employees to be more productive.

First, an employee is less likely to have distractions when they are working from home. No colleagues sliding up to their desk or cubicle for a few minutes of useless chitchat, no water cooler conversations, and so on.

Second, working from home gives employees greater autonomy over how they do their work, which unlocks their creativity and leads to improved productivity.

Employees working from home also have the opportunity to take breaks whenever they deem it necessary, which can also boost an employee’s creativity and motivation, leading to improved productivity.

LESS TIME SPEND COMMUTING

Like Wendy, working in the office means having to deal with a long and stressful commute to and from work each and every day, something that almost every employee hates.

Allowing your employees to work from home eliminates this potential stressor. While the benefits of eliminating the commute are clear for employees, it can also be beneficial for employers.

First, eliminating the daily commute helps your employees save time. According to an article published on the Washington Post, the average American worker spent about 9 days commuting in 2019. If they didn’t have to commute, this is time they would have spent working on something that actually matters to your business.

In addition to helping your employees save time, eliminating the daily commute can also help reduce employee absenteeism and increase employee satisfaction.

According to this study, there is a correlation between longer commutes to work and increased absenteeism, while this other study found out that the impact of a 20 minutes increase in daily commuting time was equivalent to an employee taking a 19% pay cut.

Finally, not having to deal with the morning commute means that your employees will get to their work stations feeling fresh and energized, which results in higher morale and increased productivity.

A WIDER TALENT POOL TO PICK FROM

Every organization wants to make sure that it is hiring the best talent available. Sometimes, however, organizations are forced to make some compromises because the kind of talent they want is not available from the talent pool they have accessible to them.

For instance, a company located in a small town might have a challenge finding the kind of talent they want within their immediate geographical location. While the kind of talent might be available elsewhere, they might have reservations about moving to a smaller town, forcing the company to settle for the available talent.

However, if such a company was willing to allow its employees to work remotely, it wouldn’t be forced to settle for the talent available within their immediate geographic location. Instead, it would be possible for the company to hire talent from anywhere in the country or the world and have them work from home.

In addition, millennials – who are about to become the largest generation in the workforce – are increasingly considering the ability to work from home when choosing where they want to work.

Statistics show that 70% of millennials say that the ability to work from home is one of their key considerations when choosing their next job. Without embracing work from home arrangements, you could end up locking yourself out from accessing this talent pool.

REDUCED WAGE BILL

According to a report by Owl Labs, 34% of employees are willing to take up to a 5% pay cut in exchange for the opportunity to work from home.

According to the same report, 24% of employees will take up to a 10% pay cut, while 20% of employees will take a pay cut exceeding 10% in order to be able to work from home.

While I am not asking you to reduce your employees pay before allowing them to work from home, you can still use this to your advantage and lower your wage bill.

For instance, when it comes to hiring, instead of offering an excessively high salary in order to hire the right talent, you can give them the standard market salary plus the ability to work remotely.

Alternatively, instead of rewarding an employee with a salary increase for good performance, you can reward them with the flexibility to work remotely. Both approaches allow you to keep your employees motivated without increasing your wage bill.

In addition, when your allow your employees to work remotely, you have access to a wider talent pool as we saw above, which makes it easier for you to find employees with the right skill set for the job, instead of being forced to hire someone from a smaller pool – who might not have the necessary skills – and then having to train them. This can help you save on employee training expenses.

BETTER DISASTER PREPAREDNESS

Giving your employees the flexibility to work from home makes your business better prepared in case of disaster that makes it difficult, or even impossible for your employees to get to work.

For instance, following the outbreak of the Covid-19 pandemic, governments across the world have implemented lockdowns in a bid to slow down the spread of the virus, making it impossible for workers to access their places of work. Other disasters, such as earthquakes, or even inclement weather might also make it difficult for your employees to get to the office.

In such situations, having created an environment where your employees can work from home would allow your business to handle such disasters better.

For instance, following the Covid-19 pandemic, businesses across the world are struggling to put in place measures to allow their employees to work from home.

However, business that already had a work from home protocol quickly made a seamless switch with hardly any disruption to their business operations.

IT INCREASES TRUST

Over the last couple of decades, many business managers have run companies under the belief that employees can only be productive when they are under strict supervision.

Such managers try to micro-manage their charges in every way, checking things like the time they entered or left the building, the time they spent for lunch, and so on.

Unfortunately, such approaches show employers that you don’t trust them, and very often turns the relationship between employees and managers into some sort of cat and mouse relationships.

The employees work when they are being supervised, but stop working without the supervision.

It is impossible to exercise this kind of supervision with remote working.

By giving your employees the flexibility to work from home, you are essentially telling them that you trust that they will do the right thing and get their work done without you having to constantly look over their shoulder.

Showing your employees that you trust them can lead to increased motivation and productivity.

IMPROVES EMPLOYEE HEALTH AND WELLNESS

Allowing your employees to work from home can also boost their health and wellness, both physical and mental.

Working from home offers your employees better work life balance and allows them to create the kind of environment that is well suited to their personal needs.

This, as well as the elimination of stressors such as the daily commute can contribute to improved mental health for your employees and decrease risk of problems like anxiety and depression.

According to the report of a study conducted by PGi, 82% of employees who work from home have lower stress levels compared to employees who work in-office.

Working from home also makes it easier for organizations to manage the effects of employee illness.

For instance, if an employee is suffering from the flu, they would have to keep away from the office until they feel better to avoid spreading the flu virus to their colleagues.

This absence from work translates to lost productivity for the organization.

With the flexibility to work from home, however, the employee can continue being productive from home and attending meetings via video conference, without any risk of infecting other employees.

Not only does improved employee health and wellness lead to increased productivity for the organization, it also allows the organization to save on medical costs and lower the cost of employer-sponsored health insurance.

BOOSTS EMPLOYEE MORALE

Employee engagement is dismally low, with a Harvard Business Review report claiming that businesses are losing between $450 billion and $550 billion every year as a direct result of disengaged employees.

Companies are spending in excess of $100 billion every year in a bid to improve employee engagement. However, raising employee engagement doesn’t need to be an expensive affair. Employers can quickly boost their employees’ morale – and by extension their engagement levels – by allowing them to work from home.

Allowing your employees to work from home shows that you trust them, it provides them with better opportunities to take care of their families as well as their personal health, it gives them the autonomy to do their work in a way that works best for them, it gives them greater control over their schedule, and allows them to enjoy a better work life balance.

Brought together, these factors contribute to boost the morale of your employees and make them more engaged at work.

IT’S GOOD FOR THE ENVIRONMENT TOO

We live at a time when consumers as well as other businesses are conscious about the social and environmental impact of the companies they are choosing to do business with, and therefore, it is important for your business to come across as a business that cares about the environment.

Fortunately, allowing your employees to work from home is also good for the environment.

Allowing your employees to work from home benefits the environment in several ways. Probably the biggest advantage of working from home is that less people have to commute to work, which means reduced consumption of fossil fuels and reduced emission of greenhouse gases.

Close to half of all jobs in the United States can be done remotely, and 79% of people holding these positions say that are willing to work from home. If all these workers were to start working remotely, emission of greenhouse gases would reduce by over 50 million tons.

Allowing your employees to work from home also means you get to save on things like paper, thus saving the world’s forests. You also get to save on energy consumption, and your organization will generate less waste.

By allowing your employees to work from home, you demonstrate to potential customers that your organization is responsible and environmentally conscious, which can lead to an increase in sales and better clients.

WRAPPING UP

When most people think about remote working, they only consider the benefits such an arrangement can have on employees.

As we have seen from this article, however, remote working also presents huge benefits for employers, and it is surprising that many employers are yet to embrace work from home arrangements.

If you decide to allow your employees to work from home, however, it is important to put in place measures that will help your employees make a seamless transition to remote working, such as putting in place proper guidelines for communication and meetings, setting clear expectations for work hours and how projects will be delivered, how the employees will check-in with their managers, and so on.

Ultimately, if done properly, implementing a work from home arrangement for your employees can create huge benefits for your company or business.

Working From Home Can Benefit Employers As Much As Employees

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