How to Enable Successful Remote Environments
Work-life has changed drastically and unpredictably since the start of the COVID-19 pandemic. Nearly everyone that can work from home has done so, and with little time to prepare. While this is non-traditional remote work experience, many business leaders are considering supporting remote work permanently — at least in some capacity — as we emerge from our current situation.
This is largely due to the competitive advantages remote work provides over office-first businesses, including increased employee productivity and engagement. This increased productivity drives better performance and, in turn, more profits. Decades of Gallup research shows that highly engaged employees are 15% more productive when they work remotely, and highly engaged workplaces claim 21% higher profitability.
Given this, businesses who have adapted successfully to remote work aren’t expected to rush back to the office any time soon. In fact, a recent study conducted by Motus found that once stay-at-home orders are lifted, as many as 30–40% of companies could permanently spend more time working remotely than in an office — a substantial increase from what business looked like before the pandemic.
The Business Advantages of Remote Work
Having a large remote workforce has numerous advantages for both businesses and their employees. Without commuting, employees can increase their focus on their work, reduce costs on once-necessary items — like gas — and find their own work-life balance. This has led to greater employee satisfaction and retention for businesses. Furthermore, as they are no longer limited by geography, employers can access a larger talent pool when looking at potential recruits.
Many have also experienced near-term savings on utility bills and in-office perks. But beyond these immediate savings, there are much larger savings opportunities when businesses embrace a remote work culture, for example:
- Office space: Dedicated office space costs businesses $12,000 per employee every year, and office space leases are typically one of the least flexible costs of running a business. By reducing the number of workspace businesses need, they can reinvest office real estate spend into other initiatives that benefit their workforce. This includes investments like employee development and engagement and even perks like childcare or travel stipends, onboarding retreats, or home office setups.
- Reduced absenteeism and business continuity: Unscheduled absences cost U.S. businesses $300 billion every year. Employees equipped to work remotely are more adaptable and can continue work through unplanned interruptions that disrupt work-for example, an HVAC problem in the office building or inclement weather.
- Lower voluntary turnover: Losing a valued employee can cost a business $10,000 to $30,000, and 95% of businesses say that remote work has reduced voluntary turnover.
Enabling Successful Remote Work Environments
With increased flexibility, autonomy, and work-life balance for employees — and greater productivity and continuity for businesses — remote work benefits are numerous. Our current work from home situation is unique because they need to act swiftly at the onset of COVID-19 gave employers limited time to prepare employees for productive work in a home environment. Looking to the future, they have more time and ample options to consider that will enable successful remote work scenarios.
In the absence of a dedicated office environment, employers’ most important thing to do is to provide and deploy the tools and equipment that will enable employees to productively carry out their work — namely, a computer and a phone. They can provide these devices in a few different ways.
One option is to supply employees with everything they need through a company-provided approach to supply computers, phones, and sometimes a dedicated internet connection.
However, even with enough time to procure and deploy equipment to every employee, this approach is expensive. Along with providing the actual devices, employers need to provide support for them. While expenses like a computer are one-time costs, phones are a mixture of a one-time device cost and recurring costs for data and service.
For every 500 company phones provided, the average company spends more than $3,000 per month in support. Considering that most employees already have a personal cell phone and an internet connection in their home, it might not make sense to supply these a second time.
A second approach is to enable a bring-your-own-device (BYOD) program in which employers most commonly choose to pay a stipend to those who work remotely regularly. However, many employers are inconsistent in their approach to stipends. Sometimes amounts depend on when an employee was hired or what an employee negotiated when they were hired.
Additionally, when stipends are rolled into compensation packages, and employers don’t have the data to substantiate the amount paid, stipends are taxable. This means employees who receive a $100 taxable stipend each month; they only take home $70 of that stipend. Furthermore, remote work has costs beyond the mobile phone that should be considered when deciding what a stipend should cover. Frequently overlooked costs include high-speed internet and the space employees use in their homes as a dedicated workspace.
With employment laws like the Fair Labor Standards Act (FLSA), which require employees to be reimbursed for any business-related expense, employers who follow a stipend approach put themselves in danger of failing to reimburse employees on-the-job expenses fully and can become entangled in costly lawsuits.
Localized reimbursement rates:
The third (and most accurate) approach is to reimburse using localized reimbursement rates, which factor in geographic costs. This is important — as phone, internet, and home office costs are not the same in every location — and different roles require different levels of availability. Some jobs require employees to be responsive outside of business hours, while others require more limited connectivity.
The average national cost for these expenses ranges between $90 — $126 per employee per month — so what is the right amount? By factoring in the amount of connectivity required and geographic costs, employers can ensure that their employees are fairly and accurately compensated for the costs they incur at the benefit of their employers.
More than 90 million people in the U.S. today have a job that could be performed at least partially from a remote location. As businesses look to the future, some have already announced that they will be transitioning to permanent remote work environments. Companies that empower employees with the tools and resources to be successful will find themselves at an advantage as the way we work continues to evolve.