How can you possibly save up to $20,000/year? By hiring freelancers!
Now before you roll your eyes or move on thinking it is impossible, let us have a look at the stats.
Note: The money saved is $20,000 per employee per year.
Costs Incurred in Hiring Full-time Employees
Companies spend up to $20,000 extra apart from the basic salary of the employees each year. These costs include office rent, IT infrastructure, office supplies, recruitment costs, and employee benefits such as medical insurance, employment taxes, and other expenses. One can easily save extra costs by hiring remote teams. An exemplary instance is how American Express saved almost $15Mn/year by allowing its employees to work remotely.
If a company as reputed as American Express can leverage the benefits of remote and save so much money, why don’t all other companies take inspiration from it? After all, businesses are mostly about the bottom line! Turns out the answer to it is that not everyone can manage remote workers successfully. Companies underestimate the structure needed to manage remote teams.
A company needs competent managers capable of handling both in-house and remote workers simultaneously. When done right, companies can easily save up the money they would otherwise spend on running a physical office. The benefits required for an employee salaried $50, 000 would involve life insurance up to $150 and health coverage ranging $2000 to $7000 depending on whether it is for an individual or family. The telephone and computer expenses sum up to $1000+ per computer and $700 for telephones and necessary software. Additionally, it includes the rent for space which can amount to $2000 at a minimum.The costs can go even higher depending upon the location and how fancy the workplace is. The total expenses go up to $4000 per employee when working in the physical office. Let us dive deeper into how you can make remote actually work for you and save your added costs.
How Remote Work Increases Productivity
At first glance, you might think that hiring remote workers will cast a negative impact on productivity. They might indulge in household chores or any other activity than work. You might also wonder how you would even monitor them if they are working from the comfort of their home.
However, according to the latest survey by Flexjobs, over 65% of remote workers think that they are more productive working remotely.
1. Fewer Distractions
Unlike the traditional office environment, there are fewer distractions from colleagues, reduced stress of commuting and zero office politics. The absence of such things definitely boosts the productivity of the employees. Another study done by the University of Illinois revealed that the task-based performance of employees significantly increases when working remotely.
2. Utilizing Productive Hours
Some employees like to work late night while some are early birds. A flexible work environment helps employees in making the most of their productive hours thus improving the quality of work. The office-going employees seldom experience such luxuries.
Did you know that 78% of employees who call in sick are actually not? They just need the time off to pay heed to their family or get indulged in other essential tasks.
To the contrary, remote staff continues to work even when they are sick as they can stay home without causing harm to colleagues. They also get back to work sooner after medical emergencies and schedule the errands without losing an entire day.
In a recent Global Workplace Analytics Study, Dow Chemical, Best Buy and British Telecom reported that their employees were 35-40% more productive when they worked from home. This data is overwhelming as well as eye-opening. In yet another study by CTrip, remote workers reported being 14% more productive than their office counterparts.
The workplace distractions can pose a loss as massive as $600 Billion for large companies, according to TRN. With increased productivity, while working remotely, you can save up this sum. Thus, the cost saved by hiring remote workers per year for each employee is from $5000 to $7000.
Access to Global Talent
Your ability to scale your business depends on your workforce. After all, it is the people that make a company thrive! Hiring remote workers allows you to hire only the best employees from a large talent pool. A remote and flexible role appeals to more people. It also helps you take advantage of the currency difference. Employees might hail from places where the cost of living in low enabling you to secure the top talent for a fraction of the cost.
Interesting, isn’t it? People hate to travel long hours and are therefore more inclined towards remote jobs. They are also less willing to leave their families and move out to another city for a job opportunity. Offering remote roles to candidates lets you choose from a plethora of options. You can then screen these candidates and find out if they are the best fit for the role.
More often than not, finding the right employee within your city can be cumbersome. Companies spend months looking for the right talent to join their teams. The constraint of location ultimately forces them to compromise with the quality and hire whosoever is available. Why affect your work when you can easily hire remote employees? It is indeed a win-win situation for both the company and the workers.
Studies show that employees are more likely to be engaged when they work from home. And highly engaged people often stay motivated. They would be more willing to push their limits as they feel that the work is meaningful. Moreover, remote workers focus on getting more work done in less time so that they can enjoy their free time. The same doesn’t apply to office going folks as they still have to be at work even if they finish their job faster.
Hiring remote workers can help you save up these costs as you find the exact talent for the job from a global pool. According to Global HR Research, companies bear a loss of $1000 to $7000 per employee if it is not the right candidate.
Reduced Employee Turnover
Losing an employee affects not only your business but also your money. For instance, if your company has an annual turnover of 11% then including the hiring costs, employee training, refilling the role and productivity opportunity will cost you $1.57 million per year. Hiring remote workers can help you reduce employee turnover.
According to Harvard Business Review, 68% millennial job seekers said an option to work remotely would significantly increase their interest in the specific employer. Moreover, job attrition rates fall by a whopping 50% when companies offer remote work opportunities. Workers stick to the companies that provide such remote jobs. This, in turn, enables the companies to not hunt for new talent every now and again.
The 2015 PGI Global Telework Survey shows that 68% of the surveyed workers worldwide would leave their current jobs for a similar job wherein they can work remotely full time at the same pay. A company could lose valuable employees if they aren’t offering flexible telecommuting jobs.
Additionally, employees also tend to work more owing to the flexible hours. Studies have also observed that people who work remotely often work post business hours, unlike the in-house staff. They have the flexibility of balancing work and their personal life within 24 hours while delivering quality.
Hiring remote employees makes your meetings more meaningful. With a dedicated slot allocated for the meeting, you are more likely to stay focused and make the most of the designated time. Knowing that the meeting will wrap up soon enables you to get right to the point. That means increased efficiency and in work while saving a lot of time.
Remote workers save up to $5000 per year working from home which makes them reduce the turnover, as per TRN. They also put in long hours which enable companies to make more profit.
Lesser Sick Leaves and Happier Employees
Did you know that employees report less downtime and sick leaves while working remotely?
Since they do not have to put in long hours commuting, the chances of them getting stressed out decreases. Staying at home gives them adequate rest which makes them come back to work sooner after a disease. Even if the remote employees lose some time taking care of themselves, they can always compensate it, thanks to the flexible hours.
The fact of working remotely is workers get the flexibility required for balancing well-being and work boosts productivity. Even on the sick leaves, if they start feeling better, they can log in and start working. Also, employers are steadily realizing the importance of remote workers.
As a company, you might think that remote workers are lazy and they would slack around. However, according to a Connect Solutions survey, 30% of workers said that they accomplished more in less time when they started working remotely.
When asked about how happy they were, remote workers said they would rank their happiness 8.1 out of 10 while working remotely. Telecommuters are more satisfied than workers in other arrangements as they get to stay autonomous while still feeling valued. Remote workers highly value their freedom and flexibility. When companies provide them with remote jobs, employees feel happier and thus produce better results.
Unscheduled absences cost around $1800 per year per employee, according to PGI. The chances of absenteeism will be significantly reduced with remote working.
Hiring Fast and Saving Recruitment Expenses
The hiring time is drastically reduced when you are looking for remote employees. That’s because finding the right talent within the said geography might take longer than usual. However, when you hire remotely, there is a broader pool of candidates that too from various locations. You can shortlist them based on the criteria and then proceed with the screening.
Who wouldn’t love to work from the comfort of their home while sipping some coffee with their pajamas on? Millennials are always looking for avenues wherein they get to learn and expand their knowledge while keeping their freedom intact. The current generation hardly believes in conforming to any company and is more inclined to live a digital nomad lifestyle. With so many people applying for remote jobs, you are sure to find the right candidate way faster.
The best part is remote work gets rid of the costs involved in recruitment and relocation. You no longer have to move your employees as they are going nowhere! However, your HR team should have access to both national and international candidates to make the most of this opportunity. Companies like IBM, Google and Amazon offer remote working options. These major industry players are saving a lot of money by hiring telecommuters. Needless to say, the trend of remote work is here to stay! Thanks to the technology at discourse, you can create an engaging work environment virtually. Increase your business productivity and save a massive amount of money by hiring remote employees.
According to Glassdoor, it takes up to 52 days to fill a position along with average spending of $4000 to hire an employee. If the employee is being hired based on location constraints, they need not be the exact match. Thus, hiring a wrong candidate who is certainly not the best fit means $4000 for that candidate and $4000 for the replacement. Therefore, by hiring remote, you can save $4000 per candidate per year.
Statistics Supporting Remote Work
You are bound to find overwhelming statistics on the internet about how remote work helps in saving money, increasing employee satisfaction and boosting employee retention rates. Apart from the overhead costs that you will save, employee satisfaction and lower attrition are very crucial. A company is truly built from its employees, and remote jobs give the much-needed freedom to the staff.
a survey reports that 82% of telecommuters feel less stressed in their lives, thanks to remote jobs 🙂 It boosts the morale of employees and they are less likely to take unplanned leaves and check-out during the working hours.
Data from Global Workplace Analytics shows that 24% of remote workers report of achieving more in less time as opposed to conventional office employees. Focusing on the happiness of your employees can be a driving force to success. When your employees are happy, they are less likely to daydream about where they would rather be. Working remotely helps them be more present and focused.
Employee happiness is a by-product of remote work culture. Think about it! No distraction of the time-wasting procedures in the office, constant chatter of the co-workers, sudden meetings, celebrations, and other hindrances. Employees can entirely focus on the work at hand and feel more accountable and productive. It gives them a more profound sense of satisfaction.
How to Build Remote Teams
Companies realize how hiring remote workers can benefit their organization. However, they also need to be very diligent while selecting the candidates. Investing in the training of remote employees and keeping them engaged virtually are crucial aspects of building a remote team.
There is a drastic need for clear objectives and an excellent vision to reach the goals. To begin with, you must have talented employees on board. Secondly, there should be a reliable and robust communication network. Once the recruitment is done, it is equally important to keep them motivated and involved in the company.
While it might be quite easy to do so with an in-house team, remote teams might need some more attention. A great way to keep the employees motivated could be to introduce the concept of incentives. That automatically results in employee loyalty and better performance. Awards and recognition make the employee feel important even while working remotely.
Employers are encouraged to ensure constant and effective communication among managers and employees. They shouldn’t feel left out or ignored in the process. To hire the right candidates, you must take an interview either through Skype or any other platform. Test their core competencies before assigning them tasks.
You would have to foresee the time-zone and communication issues. Even though remote teams can be a boon, but a time difference of more than eight hours is rarely recommended. You might face challenges in case you wish to have live team meetings. Also, check for language barriers while hiring candidates.
Communicate the company vision clearly to your employees so that their actions are aligned with your objectives. Set some standard procedures in place for addressing the commonly faced challenges. There should be absolutely no ambiguity about what you expect out of your employees.
Challenges Faced in Building Remote Teams and How to Conquer Them
According to the 2017 Employee Benefits Report, 60% of the companies in the United States offer telecommuting jobs. Data from Up work also reveals that the number of freelancers and contractors have seen a significant rise over the years. However, managing remote teams has the challenges of its own. For instance, employers often struggle to decide how much work is too much or too less. Here are the challenges typically faced by companies and how to overcome them.
- Communication: Communication is vital for the flow of information and employees often face hurdles while ensuring seamless communication. Make it a point to gauge the communication skills of your employees while hiring them. It is essential to know how they would interact on calls and emails when hired for a remote position. Moreover, it’s your responsibility as a leader to foster communication within your organization. There are various tools that you can use. For instance, you may use Slack, Google Hangouts, and Twist for chats; Trello and Jira for project management; Calendy and Doodle for scheduling; and Google Meet and Zoom for web and video conferencing. You can try out the various tools for building remote teams and pick the one that best suits your needs.
- Trust: Collaboration and engagement are the by-products of trust within teams. However, it can get tough to build trust among teams that are remotely located. The workaround for this is to have a clear mission statement. Defining your mission right in the beginning and conveying it to your employees ensures that they follow through it. Use innovative team building ideas so that all your employees get acquainted with each other’s style of working. It is a crucial step in building trust! Define the team structure and who reports to whom to ensure workflow. Meeting regularly through video conferencing will help teams in establishing a sense of connectedness. It also prevents the employees from feeling left out.
- Productivity: As an employer, it is quite natural to be anxious about the overall productivity of the teams. After all, the remote work setting can cause employee burnout due to lack of boundaries. The solution to this problem is to establish clear goals and come up with deadlines. Not all your employees are going to work at the same pace. However, you must communicate the deadlines to utilize the time effectively. Encourage using tools such as Toggl or Harvest for time-tracking. It could also be the other way round when your top performers might tend to overwork and exhaust themselves. You should monitor the workload and suggest corrective measures. Develop processes and schedule team meetings to make sure that everything is on track.
Why Do Millennials Prefer Remote Work?
According to a survey by Deloitte, more than half the millennials reported that remote work made them more productive. Three-quarters of the respondents also said that they would appreciate if more such opportunities were presented. Here are a few reasons why the millennial workforce vouches for remote work.
- Better work-life balance: Millennials prioritize work-life balance apart from financial benefits while evaluating a job opportunity. The mere hallmark of achievement no longer appeals to them, and they instead look for meaningful work. With the help of modern technology, it has become possible for millennials to get fulfilling work while giving ample time to their families and personal goals.
- Avoiding burnout: Providing a flexible work culture is an excellent way of gaining employee loyalty. Millennials are looking for remote jobs that enable them to work from anywhere and anytime. They wish to define their hours and make the most of their productive hours. It is absurd for them to conform to a regular 9 to 5 work culture only. They truly value productivity even if it is beyond the defined working hours.
- Remote work is practical: Millennials understand that remote work is not only a trend but a necessity! While the staff gets flexibility, employers get better productivity. Isn’t it better to reap the benefits of technology than to enforce unrealistic expectations on the employees?
Thus, your organization can save a lot of money by switching to remote work. The transition from the physical office to a virtual one can be a little challenging. However, with the right tools and technology, you can conquer it. Setting clear expectations and streamlining the processes outright is the way to go. Hiring remote employees don’t only help you save up to $20,000 each year per employee but also boosts productivity. That means a company with 500 employees can save close to 10 Million per year by hiring remotely. Make sure that you accommodate the needs of millennials who are a crucial part of the future workforce.