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Lockdown savings: Goodbye office, hello virtual working!

Finance & Money

Posted on Saturday, September 12, 2020

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When people think about the benefits of working from home, they usually think about the benefits to the employees. Saving time from doing the morning commute, ability to work from their bed on cold winter days, endless supplies of snacks from the kitchen and avoiding the annoying office small talk. But employers can also start to benefit more from adopting a full-time ‘work-from-home’ policy – in the form of huge financial savings.

 

With the lockdown still underway to some extent, and businesses still being encouraged to carry on remote working as much as possible, some companies may start thinking about saying goodbye to the office for good. At least for the next few months anyway. 

 

If you’ve managed to successfully work remotely for the last few months, why not carry on? Especially if it helps save your company money!

 

What are the savings from virtual working?

 

Saving money, especially in the current economic times, is always an attractive option for businesses. Which is why it’s likely to be the big push towards permanent remote working for many companies. So, what are the big savings that come from ditching the office and settling for virtual working?

 

Real estate

 

The most obvious saving is the cost of commercial property. Your physical office space. You can save thousands on commercial rent by either moving to a smaller office space or saying goodbye to having an office for good.

 

It’s not only the rent that you’ll save on, but the maintenance costs that come with running an office space. From the water and electricity through to air conditioner maintenance and other utilities.

 

When the time comes to head back to the office, many companies may consider working from co-working spaces on a ‘pay-as-you-work’ option rather than being committed to high monthly rental fees. 

 

Cleaning services

 

Companies going back to the office are going to need to heavily ramp up their cleaning and sanitisation budgets in order to provide a safe space for their employees. If you don’t go back at all, then you’ll be saving a huge additional cost.

 

Groceries

 

From keeping the tea and coffee station fully stocked to making sure there’s enough refreshments to serve during meetings. Let alone the costs of the occasional ‘Friday lunches’ and birthday cakes. You’ll likely save a few thousand Rand each month on grocery costs alone, depending on the size of your company.

 

Insurance

 

Not only will your employees save on their car insurance (as they won’t be driving as much), but companies can save on their office Buildings Insurance. You’ll still need Business Insurance in order to cover other parts of your business, but there’ll be huge savings by not having a physical office space to insure.

 

Increased productivity

 

There have been many studies done showing that staff generally have higher productivity when working remotely. There are less distractions, less stress, and more time to just sit and focus on work. More productivity means more output. While it’s not necessarily a saving, it means more chance of profit. Which is good for business.

 

There’s also the benefit of increased job satisfaction among your employees – if they’re happy working from home that is. This leads to less staff turnover, which is a major cost for companies. Keeping your employees happy keeps you from having to pay the additional costs that come with hiring and training new staff members.

 

Studies have also shown that employees are more likely to sacrifice their yearly raise if they have the option to work remotely and have more flexibility. Another option to think about for companies who may have already had to cut staff salaries due to the financial effects of the lockdown.

 

Larger talent pool for hiring

 

Again, not a physical saving but still saving in the long run. Having a remote office means that your hiring talent pool opens up. You’re not restricted to only hiring employees in your city. For companies based in Johannesburg, for example, this can be a huge saving as potential employees based in other parts of South Africa may have lower salary expectations.

 

Reduced footprint

 

While not saving directly for your company, it’s a saving for the environment. Working remotely means that your business is reducing its footprint, which is good for the environment. There’s already so much environmental benefit purely from cutting out your employee’s daily commute to the office.

 

Incorporating remote work policies into your business plan will also demonstrate to potential customers that you are a responsible, environmentally conscious business. Which is where many consumers are starting to rather spend their money.

 

It’s not all savings, there will be some new costs

 

While you are saving on physical assets, setting up a remote working system requires other additional costs. To keep productivity levels up, you may need to adopt various management tools software. These all come at a cost, and unfortunately are priced in US$. Meaning, as the exchange rate increases, so does your monthly subscription fees.

 

There’s also the costs of communication tools. While many video conferencing platforms have free offerings, if you’re going to be doing this full-time, you’ll likely need to move up to the paid versions at some point.

 

If your staff weren’t already working off laptops, then there’s the additional cost of making sure that all staff has adequate equipment to carry on working remotely. This, however, is likely just a once-off cost in the beginning.

 

Some businesses may also look at subsidising some of the ‘work-from-home’ costs for their employees. Things like giving a stipend for internet costs, their cell phone bill, electricity, and other amenities that employees enjoyed ‘for free’ at the office.

 

The evidence is clear, saying goodbye to the office and going full-time virtual office will have great savings for your business. Even with the additional costs that pop up. 

 

Do you need to relook your Business Insurance in light of the changes in your office? Contact Budget today! We’ve got a range of different options for your specialized business needs. Budget Insurance - affordable, ‘cos you can’t afford not to!

 

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