Onsite employes v remote employees - a financial perspective
Thank you to Stuart Reynolds at Fullstack Advisory for our guest blog post today which looks at the way a remote team can impact the bottom line of a business.
By Stuart Reynolds, Partner at Fullstack Advisory.
In the cloud economy, employers now have the option of having employees remotely based anywhere with a secure internet connection. But how does this compare to having staff onsite? Before settling down on the details of their employment contract, we dive into the financial considerations of choosing an onsite vs a remote situation for your staff.
With modern technology facilitating global teamwork, the trend of having off-site employees is exponentially increasing across the world. There are many reasons why businesses might prefer off-site employees with the main financial benefits covered below.
Lower Office Costs
Less office space required means less rent to pay! With employees working from their home or elsewhere, essentially the responsibility for paying for facilities like heating or cooling, internet, furniture and other related infrastructure shifts to them. This is an upfront cost advantage to the employer, as it no longer has to cover these traditional office facilities for the employee.
That said, providing for an office laptop & chair goes a long way towards ensuring the employee is working to certain ergonomic standards.
According to the latest Household, Income and Labour Dynamics in Australia Survey, Aussie workers averaged more than 5 hours per week commuting to and from work in urban areas. That’s a lot of potential time lost with family or catching up with friends. With remote employees, this time spend on the commute is effectively taken out of the picture, allowing for the increased productivity & wellbeing of these staff. This productivity hike translates into advantages for the company, as they are able to get work done in a quicker time frame or to better quality.
With focus and concentration required for most tasks required whilst on a computer, the remote work setting allows staff to make good progress without the distractions of office politics, non-related phone calls or an overbearing supervisor! Subsequently, a company’s cost per project can go down as a result of increased productivity.
Access a broader Talent Pool
Allowing remote work situations broadens the pool of potentially qualified staff for your position. In particular, this includes experienced staff whom are simply less able to commute because of family or other commitments. Where the time benefit of remote working is offered to potential employees with children, they may be willing to forgo a higher pay in lieu of spending more time with their family.
Similarly, employees no longer have to be employed from within the same city and your HR team can access overlooked regional towns to source talent. In regional towns, living costs are often much cheaper and there is less salary competition from employers offering similar positions.
Cost-Effective HR Outcomes
Hiring employees who work remotely can be an easier task compared to hiring onsite. The interview can take place over a Zoom meeting, phone call or an email. And the recruitment campaign can be largely conducted over social media. Remote jobs are sought after, as the HCL Technologies end-to-end recruitment and selection campaign on Twitter end result shows with 250,000 participants; direct low cost access to ideal candidates in a crowded market; and 5 successful candidates.
Remote teams are also less likely to have a high turnover owing to better incorporation of your staff’s needs and engagement. This reduces the need for expensive recruitment agents because of the increased likelihood of direct engagement between staff & employer, working towards noticeable cost savings from recruitment drives and other associated costs.
Flexibility and Variability of Employment Arrangements
Much remote talent can also be engaged on a project to project basis – particularly where the nature of work is highly variable & directly in correlation with the number of projects the company has undertaken over the given timeframe. This might be the case where work is highly exposed to seasonal trends such as Christmas or end of financial year. Therefore, in the case of hiring remote workers on a project to project basis, companies might not be tied to making an addition to the regular payroll spend and can make significant savings particularly in leaner periods. It’s important to ensure your legal obligations to staff in relation to employment and leave entitlements are being met however – cue the Remote Expert!
Key Take Aways
Remote working scenarios can be a significant contributor to increasing the overall cash flow of the company. By enabling a lean employment model, businesses retain their competitiveness in an increasingly complex business environment whilst also improving staff wellbeing & productivity. Even though hiring remote workers might be an added perceived risk initially, the tradeoff is often significant financial savings to the business & a better engaged workforce.
Want to know more about finances - get in touch with Fullstack Advisory here.
About the Author
Stuart Reynolds, C.A. is the founder of Fullstack Advisory, accounting firm to some of Australia’s most innovative entrepreneurs in the tech & online arena. He enjoys working with founders with the drive to grow influential businesses. He was also listed as Partner of the Year - Boutique Firm (finalist) in the 2019 Australian Accounting Awards.