Turns out that not only do workers save money by working remotely—limited transportation costs and less temptation to spend on fancy lunches—the trend may also help companies too.
Companies that can work remotely could save up to $10,600 per worker annually, according to a recent report from Lemon.io, a marketplace of vetted software developers. That extra savings could prove helpful for companies if the U.S. really does enter a recession next year, as many experts predict. An economic downturn could force many companies to rein in expenses.
The report crunched the numbers, finding that downsizing office rental costs alone can save companies $5,580 per employee annually. But it’s not just office space that eats into the budget. Based on the estimate that work areas should be at least 120 square feet per employee, the report found that employers could save more than $2,000 per employee in utilities—that includes repairs and maintenance costs too.
Office snacks, coffee, and tea add up to about $1,300 per person in annual savings, while one-off expenses like chairs and computer equipment are about $1,600 per worker.
Some companies do offer stipends for Internet costs, cell phones, and remote desk set-ups, but these perks tend to be a minimal expense for employers. Only 3% of employers surveyed by the Employer Council in February were offering their employees a lump sum stipend or reimbursement on home-office equipment. The average stipend was about $66 per month.
And the employer savings are on top of the fact that employees who work remotely at least two to three days a week can save up to $11,000 a year, according to an analysis from research firm Global Workplace Analytics.
Yet the majority of U.S. companies aren’t 100% remote, instead operating in a hybrid capacity with some workers coming into the office and others working from home part- or full-time. In working their calculations, Lemon’s team say they based their assumptions on the fact that companies rent offices based on the number of employees who really work there, especially nowadays, in an uncertain economy.
That means that hybrid offices, however, may need to be proactive in determining which employees are remote, hybrid, and in-person to really lock-in the savings by downsizing their total overall office space.
But while it may be cheaper to be remote, 86% of business operations decision-makers report that the office is “vital” to their company, according to a recent 2022 BOMA International COVID-19 Commercial Real Estate Impact Study.
Yet almost 30% of the 1,200 commercial office space decision-makers predict their workforces will remain mostly or fully remote for the next 12-18 months. And that’s causing seven in 10 to report that they are reassessing their office space needs, with 61% indicating they would reduce their square footage.
Original Article: Companies can survive a recession if they embrace remote work | Fortune