5 Ways Telecommuting Saves Employers Money

By September 2, 2020 October 2nd, 2020 Guides and Information

Last Updated on

Lately, outspoken work-from-home contenders including Zappo’s Tony Hsieh and Yahoo’s Marissa Mayer have been receiving a lot of media attention. That is why nowadays it’s hard to deny the fact that telecommuting is one of the smartest business decisions that you’ll ever make.

It is a fact that telecommuting is constantly growing and a lot of businesses are turning to this option since there are a lot of works that can be done at home. Most of all, business owners can save a lot of money.

According to GlobalWorkplaceAnalytics.com, telecommuting is a prevalent, enduring trend. Since 2005, it has grown to 80% in the US. It seems that it does not show any signs of fading anytime soon due to the fact that businesses can obtain a lot of savings by permitting their employees to work from home.

Based on the study conducted by Global Workplace Analytics, a business owner could potentially save as much as $6,500 per employee, each year. Well, you might be wondering where do these savings come from? Here, let’s explore the 5 ways businesses can save in telecommuting.

Telecommuting Today

Previously, most people consider telecommuting as another trend for millennials. But nowadays it is best known as the most acceptable method of working as well as of living. Additionally, it offers the opportunity to hire managers that will handle a global network.

Nevertheless, there are still some employers who are having some doubts about the effectiveness of telecommuting. Hence, a lot of employers are concerned that when employees are at home, they are not actually working. Are you wondering how telecommuting can be advantageous to employers?

5 Ways Employers Save Money From Telecommuting

1. Boosts Productivity

One of the greatest benefits of telecommuting is increased productivity. Even with the advances of modern medicine, illness is still a reality. Unscheduled absences cost the average employer close to $2,000 per year per employee, adding up to more than $300 billion for U.S. companies.

According to the American Management Association, those who work from home will call out sick 68% less likely. And several studies have proven that those who work from home are quite productive compared to those who are working in the office.

Based on published research, employees who are telecommuting are likely the ones who can work over 40 hours a week compared to the non-telecommuters or 53% of telecommuters against 28% for non-telecommuters.

However, telecommuting does not improve productivity in all instances. Based on the research, the kind of work that the telecommuting employee does can greatly affect the productivity levels. For instance, employees who are doing repetitive tasks will likely have 6 to 10% less productivity performance compared to those employees who are working on-site.

This productivity loss should be considered by employers who are trying to determine whether or not they should allow a few or all of their employees to work from home. However, these losses can be negated by the cost savings that you can obtain in other sectors, for instance when using online productivity tools.

On the other hand, by letting your employees work at home or away from the office, you can help them avoid working in an environment that distracts them or makes them feel restless.

Telecommuting can let you work in a relaxed environment.

When employees are working in their preferred location, then they can feel more relaxed. As a result, they can be more productive in accomplishing their tasks.

Based on a study, US employers can lose $1.8 trillion in productivity each year. There are a lot of reasons for this including the long periods of time spent in commuting from home to office and vice versa, health problems, gossiping, and much more.

Telecommuting can also result in better collaboration.

When employees are connected online, then there are no reasons why they should see each other in person in order to solve any issues. As a result, your employees can save time in driving to a certain destination or prevent any intrusions while communicating with another employee trying to resolve something.

Additionally, employees won’t be able to interrupt each other, for instance by walking across the office to talk to another employee. Employees are required to learn how to collaborate remotely. This means that this can be more effective and more intended in the long run.

The Humane Side of Productivity

When employees are not working in an office environment, then office distractions can be eliminated. Hence, telecommuting can permit employees to have more time free from any disruptions. Additionally, it gives them the chance to adjust their mental and physical sides, resulting in optimised productivity.

Commuting each day from home to office one-way will take about 30 minutes for an employee living near the office. And vice versa, it will take about one hour each day to commute to and from the office.

However, there are some employees who are living far. This means that they will have to spend more time in commuting before they can get to the office.

Eliminating an hour of commuting from employees can certainly make a world of difference, most especially to their overall efficiency and productivity.

When it comes to their overall health, telecommuting can create a great impact, specifically for people who have diabetes wherein their main priority is their health.

Case Study on Increased Productivity

An ideal example of a firm who believes that telecommuting can indeed increase productivity is American Express. After implementing the telecommuting policy, American Express conducted research.

The research revealed that employees who are working from home obtained 26% more calls compared to those who are working in the office. Because of this, the overall business output has increased to 43%.

As a mother of two small kids, Brittany is trying her best to keep her family alive. She finished a degree in Computer Science and is presently working in Conduent as a Customer Care Senior Assistant. She was allowed by her company to work remotely and because of this, she was able to accomplish all her responsibilities. Obviously, with some minimal sacrifices in between.

2. Reduces Overhead

If any typical business will permit their employees to work from home even for just half the time, then the company can possibly save an average of $11,000 each year. On the part of the employees, they can save a maximum of $7,000 or a minimum of $2,000.

Lower overhead is most likely one of the obvious cost-saving benefits that any business can enjoy if they allow their employees to work from home. There are a lot of costs that can either be avoided or reduced such as utilities, lease or mortgage, office supplies, janitorial services, office equipment, water expenses, furniture, as well as transportation allowances.

Telecommuting can help in reducing your office space. Even if your employee works from home on a part-time basis, you can still adjust it so your business only requires less workspace. For instance, if you have 50 employees in your company, you could make an arrangement to let 25 employees show up one day, then the other 25 employees will show up the next day. As a result, you will have lesser office space to rent, less electricity, fewer desks, etc. Commercial real estate brokerage firms even acknowledged the telecommuting trend.

Case Study on Lower Overhead

A great example of this is Sun Microsystems. In 2007, they implemented the telecommuting policy to their employees. As a result, they were able to remove 7,700 seats of physical office space. Because of this, the company obtained a huge savings of $255 million for four years.

Each year, they continue to save $68 million. Likewise, Sun Microsystems also established 115 flex offices in the different parts of the world. Hence, employees can choose to go in if they want to work in a physical office.

3. Higher Retention Rates

In reality, not all employees want to work from home, however, those who do constantly shows higher job satisfaction and devotion to their companies compared to those who are working on-site. As a result, this can help in minimizing attrition rates.

Due to employees’ loyalty, employers were able to obtain savings on the cost of recruiting and training new employees. Hence, this is considered as another way of how telecommuting saves employer’s money.

For some employees, the ability to skip commuting each day from home to office and vice versa is already sufficient to earn loyalty. Hence, the versatility of telecommuting can truly make a difference when it comes to keeping and losing your employees.

Based on the study conducted by Staples Advantage, employees who were permitted to work from home actually have a higher level of job satisfaction and enjoys a better work-life balance. In fact, these home workers reportedly have 25% lower stress levels. Furthermore, 73% of these workers revealed that they can eat healthier when they work from home. 80% enjoyed a better work-life balance while 76% shows more loyalty to their companies.

Reduced attrition is another benefit of telecommuting. Losing a valuable employee can often cost employers thousands of dollars and based on some studies, at least two-thirds of workers would agree to take a pay cut if only they are given the chance to telecommute.

The Global Workplace Analytics conduct an analysis of over 500 telecommuting studies and discovered that 36% of employees would decide to opt to telecommute rather than getting a raise. Also, 37% of technology professionals would agree to have a 10% pay cut if they will be allowed to work from home.

Obviously, there are huge cost savings here. Also, companies should consider that for each employee who decides to quit, they will lose between $10,000 and $30,000.

Telecommuting arrangements can help with employee retention. Additionally, it can even entice new hires who have not considered your job posting in the first place. Ultimately, 100% remote positions can likely attract great talents from different parts of the world. This means that you will have the chance to hire anybody.

4. Lesser Sick Days

Sometimes employees who work from home will likely to call in sick. However, based on the research it shows that the opposite is true.  Unscheduled absences can cost businesses an average of $1,800 per employee per year. Hence, telecommuting can provide a great benefit to employers who want to cut down on unnecessary costs.

About 78% of employees who inform their employers that they are sick will likely do so due to personal issues or stress. Typically, telecommuting workers will continue to work even when they are sick. Also, they will return to work more quickly after having surgery or other health issues.

Working from home can help in reducing absences which are unrelated to work. Most probably, workers will immediately go back to work right after their appointments rather than being absent for the whole day.

5. Reduced Travel Costs

A domestic business trip will cost $949 per person on average. On the other hand, an overseas trip will likely cost $2,600. Employers who are using software and online tools in communicating and collaborating virtually would rather abstain from those expensive business trips and would rather choose the cheaper, more efficient alternatives.

Some examples of software that businesses can use in avoiding those expensive face-to-face meetings are Skype, Basecamp, and ClickMeeting. Skype is generally used for video conferencing, while ClickMeeting is usually used for remote meeting and Basecamp is more appropriate for project management.

Telecommuting can also help in cutting down expenses on wasted meetings. Meetings which took place in the workplace can be very time-consuming. In case the meeting does not take place at your office, then you will have to rent a conference room at a hotel which costs even more money for your business. With the use of advanced technology, meetings can be done virtually and it is even more effective than ever before.


Telecommuting may not be perfect for all businesses and workers, however, you owe this to yourself and your wallet. Why not take it for a test drive. Just remember that the cost savings are simply enormous making it too hard to ignore.

Inspiring your employees to telecommute does not only save you some business money, yet it can also help your employees save some money since they don’t have to drive to work or eat lunch during their one-hour break.

Telecommuting can make your business more productive, save everyone some money, and make your employees feel satisfied.


About Lydia

A keen money saver and online digital marketer. I love all things online from a good deal to the conversion rates of an email marketing campaign :).