The costs of doing business are astronomical. By doing business the way it’s always been done—with an office space, by investing in everything necessary to fill that fancy office, and adding unnecessary additional commute costs for your employees—you could be seriously harming your enterprise in the long run. From filling up the gas tank, to subway tickets, monthly parking fees, wear and tear on your vehicle, and the cost of a new wardrobe, the amount of money employees spend for work—on everything but work—is staggering. This supports the benefits of going remote for many companies.
Because it’s become a way of life in our culture, these costs are seen simply as an unavoidable expense. However, in reality both employers and employees can reap massive financial benefits by leveraging the pervasiveness of interconnectivity.
As a business owner or manager, it’s easy to think, “Well, we’re leasing this building, so we might as well put people in it.” But not enough companies are asking if that’s really the most effective (and cost-efficient) way to run their business.
Many of today’s jobs can now be done from just about anywhere in the world with a reliable internet connection. It’s time to rethink the costs of moving millions of people in and out of arbitrary pieces of real estate each day.
For the past decade, I’ve been fortunate enough to have worked remotely. I’ve done my time in the traditional desk job, and I’ve managed teams of 30 from tiny rocks scattered about the South Pacific. I wrote Living The Remote Dream to detail how I transitioned to a remote position, and to cast a light on the immense financial benefits it has had for both myself and the companies for which I’ve worked.
For those camped out in suburbia, the daily slog to the office isn’t only taxing on the soul, but it’s equally taxing on one’s budget. If you drive yourself to work, you’re adding miles to your car every single day, in turn decreasing its value, slowly but surely. You’re spending money on fuel and paying more for auto insurance. If your significant other has a job, you probably own and maintain more than one vehicle.
Each case is different, but ditching that daily commute alone can save commuters more than $100 monthly. It doesn’t take long to realize that an extra $100 socked away into a 401(k) or investment account each month would go a long way to getting you closer to retirement. Or, you could plow the savings directly back into your business in the form of updated hardware for employees, paying for everyone’s mobile bill or building up a bonus pool.
For city dwellers, the savings can add up even more. If you’re able to ditch car ownership altogether and scale back on what you’re paying to your local metro, you could easily reclaim a few hundred dollars each month.
Time Value of Money
We’ve all heard it: “Time is money.” This is particularly true when you start to add up the time one loses commuting. The American Community Survey found that the average full-time American worker spends around 26 minutes commuting each way to work. If you spend an hour each day traveling to and from work, that’s five hours per week. Or, 260 hours per year. If you’re really looking to make your stomach turn, think of it as squandering a whopping 32.5 days—yes, days—of your year.
Whether you’re involved with writing, photography, set design, catering, or consulting, one very valuable resource is absolutely vital to getting it going and keeping it up—time.
As a manager or owner, an extra five hours per week can go a long way. Perhaps it’s a few more meetings with prospective clients. Maybe it’s more timely responses to client complaints. Regardless of what you do to bolster your company, you can bet it’ll be more productive than driving or shuttling around.
You may love what you do and the people you work with, but let’s get real with one another, you probably don’t want to work for the rest of your life.
The best way to gain control of your financial future is to start yourself on a slow and steady march to financial independence. Planning for a windfall is a fool’s errand, but socking away small amounts now can mean years of bonus retirement time later in life.
Even at a conservative savings rate of six percent, saving an extra $1,000 annually in a 401(k) would net you more than $64,000 in 30 years. Depending on your lifestyle, that could enable you to free yourself from the workplace a couple of years earlier than if you didn’t save that money. To boot, that savings can grow further if you pour additional time and money into your company with your newfound time.
Relocation and Recruitment Savings
While the financial benefits of going remote are numerous for the employee, let’s not overlook the benefits for the employer. By enabling a fully remote workforce—a workforce that relies on tools such as Slack, Skype, phones, and email to stay in touch and push projects to completion—an employer can save tens of thousands of dollars annually.
Global Workplace Analytics even found that more than one in three employees surveyed would choose the ability to telecommute over getting a raise. Granted, not every business is engineered to operate with a distributed workforce, but for many in the design, marketing, and content sectors, there’s no reason not to try.
Ditching that expensive office in New York City? If so, thousands can go back in the bank each month, ready to be reinvested in hiring more people or scaling your business. Doing away with cross-country relocation packages? That means thousands in overhead that you won’t have to spend. Nixing the location requirement on your job listings? This will net untold savings from being able to hire folks with lower costs of living and immediate ROI from having them onboard and in the (virtual) office from the very first day. If you end up needing a studio or workspace for a specific event, co-working spaces and rental offices can easily fill those temporary voids.
Working remotely isn’t only about saving money and bringing home additional funds each month, but for those looking for a way to broach the topic with their employer, it’s great to have these figures at the ready.
For employers looking to give more to their employees without making another dent in the bottom line, consider the benefits of going remote. You’ll save, the employee gains, and everyone shows up to work happier and more engaged.
Check out my upcoming class, Work Remotely: Thrive in a Job from Home at CreativeLive.
Darren is a Guinness World Record-holding journalist, author, and consultant, having covered the untamed world of technology for nearly a decade. He’s driven a motorized vehicle in all 50 U.S. states, and is probably on an airplane to anywhere at this very moment. Join him at DarrenMurph.com.