How Much Do Companies Save When Everyone Works From Home

Two years have passed since the pandemic began, and as we are gradually transitioning from pandemic to endemic, it's evident that things will never be the same as they were several years ago.

One of the most significant developments is that working from home is now a reality, at least for those in fields where it is feasible.

After the epidemic struck, every company that could afford it had no choice but to allow their staff to work from home, even if it meant Zooming into meetings in their sweatpants. People appear to have become accustomed to this, and they are not ready to return to the old ways of commuting to work, or at the very least going to work day after day.

Several companies thought that work from home option would affect employees' productivity. But the statistics showed different results. Nearly six out of ten workers said they were more productive working from home. It is the middle managers who suffer from job insecurities. The transition to working from home poses a challenge to middle managers, as it diminishes their influence and makes them appear insignificant.

How much can companies save with remote work?

Not surprisingly, companies can cut the cost of providing office space, internet, electricity, water, and more to have employees work off-site.

First, companies will cut down on real estate costs, utility bills, office furniture, and office cleaning services. It is estimated that the average office space cost per employee is around $18,000 per year.

Second, although relatively small compared to other costs, a company can save on the cost of food. For instance, the company would no longer need to provide coffee, snacks, or the occasional lunch or dinner, nor have to stack up on supplies for meetings.

Third, having a fully remote organization can significantly reduce travel expenses. The cost of an average business trip is $1,500. Even organizations that don't send their employees on business trips can save dollars by allowing them to work from the comfort of their own homes, eliminating the need for regular commutes and travel allowances.

However, these savings are also offset by new costs for remote companies, such as adequate software solutions. In order to be efficient and productive, companies often provide technical support for employees facing IT issues, sufficient data plans for employees with unreliable wifi connections, cyber security, and data protection. Also, although it is not legally mandated, some companies, such as Google, Twitter, and Facebook, have provided stipends to employees to have a proper work setup, including laptops, extra monitors, ergonomic chairs, and proper desks or co-working space memberships.

It must be noted that since fewer/no employees are commuting to the office, it is beneficial for the environment by reducing greenhouse gas emissions considerably.

Global Workplace Analytics suggests that companies can save around $11,000 per employee per year if they allow their employees to work remotely 50 percent of the time.

During the coronavirus outbreak, according to Flexjobs, US firms saved $30 billion per day by having their employees work virtually. And if these figures aren't convincing enough, consider the following examples of how much money real organizations are saving as a result of remote work:

  • Flexjobs claims that remote employment has saved them $5 million.
  • IBM saved $50 million in real estate costs.
  • McKesson estimates a $2 million annual savings.
  • Sun Microsystems' annual real estate costs have decreased by $68 million.

Ultimately, working from home can save companies long-term costs regarding employees' physical and mental health. Remote work gives employees a better work-life balance, job satisfaction, etc. There is a direct correlation between better employee satisfaction, increased productivity, reduced absenteeism, and reduced turnover.

With more employee satisfaction, I anticipate that there will be fewer legal disability claims as well. There is a direct correlation between negative mental health and physical manifestations of said illness. Employee who is dissatisfied and burn-out will more likely experience physical trauma, thereby qualifying them for disability compensation and paid time off. As employees working off-site maintain better work-life balance and mental health, legal disability claims will drastically decrease. This can save the company business expenses, including funding an HR department, legal and administrative fees, and increased health insurance premiums.

Also, because employees work from home, I anticipate fewer workplace injury lawsuits/complaints. The strength of an employee's workplace injury claim is weakened as well since working from home. However, there are still good legal claims to make against a company that does not provide stipends or cost reimbursements to employees for proper work setup from home, including laptops, extra monitors, ergonomic chairs, and proper desks or co-working space memberships.

Remote work provides a number of advantages, including enhanced productivity, higher job satisfaction, and lower turnover rates. This, combined with the fact that flexible work hours reduce absenteeism, means that remote work improves a company's profitability.

According to a Gallup survey, organizations with a highly engaged workforce – that is, people who are enthusiastic, joyful, and devoted – are 21 percent more successful than those with less engaged staff. Furthermore, because remote employees are less inclined to leave their jobs, remote employers can save money on hiring and training new staff. This is a significant benefit during this great resignation period.


Even after considering the additional costs of setting up a suitable remote workspace, technology, and infrastructure, the reductions in overhead costs are high enough to make remote work an attractive alternative for businesses looking to minimize costs. Furthermore, other well-known benefits of remote work, such as greater employee productivity and satisfaction, have a long-term impact on a company's profitability.

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