“Hybrid” work, for which employees shift between working remotely and in the office, definitely is having its moment in the U.S. — and rightly so.
After organizations last year were forced to switch to a distributed workforce because of the pandemic, businesses learned that staff can be just as productive — or even more so — outside of the office. That didn’t go unnoticed either by employees or the C-suite.
For workers, some of the benefits were clear: more schedule flexibility, the lack of a stressful commute, fewer work distractions (for those without kids) and day pajamas, among others.
Now, as vaccination efforts progress worldwide and organizations begin preparing for a return to office work, most employees want to continue remote work, at least partially.
A Global Workplace Analytics survey of 3,000 people working remotely during the pandemic found that 76 percent want to continue to telecommute at least 2.5 days per week.
Though many business leaders have lamented the decline of company culture and staff collaboration with remote work, many appear poised to offer staff a middle ground. About 68 percent of employers want workers in the office at least three days per week once it’s safe, according to a PwC survey published in January 2021.
That may turn out to be a smart move in more ways than one for U.S. companies.
That’s because businesses in the U.S. stand to collectively save more than $500 billion a year, equal to the gross domestic product of Sweden, by allowing their employees to work at home half of the time, a separate Global Workplace Analytics and Design Public Group report shows.
Those savings translate to almost $11,000 for each employee who uses a hybrid work model, according to the report.
Fewer interruptions, more productivity
The report cites several factors that lead to such cost savings, including productivity, absenteeism, turnover and real estate expenses.
Global Workplace said that workers it polled said they lost 35 minutes less per day due to interruptions at home versus the office. It then calculates that over a period of a year, which translates into nine extra days of concentration per worker, or $3,600 worth of productivity. In addition, the time workers would have spent commuting was used to work, workers reported.
Those factors combined increase productivity by the equivalent of 16 workdays a year, the report said.
“Across a population of 1,000 half-time remote employees, that would add $7.4 million of productivity per year,” the study said. “At a cost of $99 thousand per employee, that would be like getting 74 new employees at no cost.”
The report notes that allowing a hybrid model also would result in less absenteeism in the workplace.
It notes that the majority of unscheduled absences aren’t due to sickness, but to family issues, stress or simply not wanting to work.
The cost of employee turnover
The hybrid model would mean less exposure to sick co-workers, less exposure to environmental occupational hazards, an increased willingness to return to work after becoming parents and reduced stress associated with commuting and office politics.
A 30 percent decline in absentee levels would represent a cost savings of $1.2 million per year for 1,000 partially remote workers, the report said.
Savings from reduced employee turnover also was tabbed as a benefit for part-time remote work. The report cites research that shows turnover can cost a company between 10 and 213 percent of salary because of the costs of recruiting, interviewing and onboarding.
In addition, “companies that don’t allow employees to work remotely in the future risk losing their most talented workers,” the study said, resulting in project delays, a disruption in team dynamics and a stall in customer onboarding.
A 10 percent drop in employee turnover would result in a cost savings of $500,000 per year per 1,000 partially remote workers, according to the report.
Real-estate cost savings also can be realized through a hybrid work model, the study said.
“An employer paying $7,700 per employee per year for office space would save nearly $2 thousand per half-time remote worker per year if they reduced their real estate footprint by just 25 percent for every half-time remote worker.” On an annual basis, that 25 percent reduction would amount to savings of $1.9 million, it added.