Last year saw the commercial and corporate industry placed on a halt due to the pandemic. While some businesses were struggled with operations and were eventually forced to shut down operations, others implemented strategies that made them thrive even more. Now businesses weigh when to reopen or if their returns should be delayed.
The news of the COVID vaccines being administered brought renewed hope for business owners looking to swing back into operations. Business owners are now looking at the prospects of encouraging their entire workforce to resume duties. But we are not there just yet.
The world is now fighting the Delta variant—an offshoot from the COVID-19 virus. According to the Center for Disease Control and Prevention (CDC), this virus is more transmissible than influenza or the common cold.
While the first known case was recorded in December last year, it is now the cause of more than 80% of new COVID cases in the US. As an effect, significant corporations in the US have delayed their returns to their offices.
Google notified its workforce that it was pushing back its official return to mid-October. Twitter mainly shut down its opened offices, as Lyft delayed its return date to February next year.
While perceived to be reactionary, this move can positively affect your business. Remote working and hybrid offices have been around for some time. According to Odesk, 1 in 3 Americans will be hired to work from the comfort of their homes. The phenomenon became more punctuated as a result of the pandemic. We have covered how you implement employee benefits in a ‘work from anywhere’ environment and how you can manage new post-COVID business expenses.
Here we discuss how a delayed return of your workforce to the office later can significantly reduce your expenses.
Lower Real Estate Expenses
With fewer employees working in your physical office location, you would require less office space. And by so doing, you would need fewer board rooms, kitchen, and lavatories. Therefore, remote working means you can lower your real estate costs significantly.
Office rent takes a considerable chunk out of your budget, and pushing back on your office return will lower expenses on that front.
Lower Utility Bills
Delayed returns to the office will reduce real estate costs and operational costs. Having few of your essential workers at your office location means you would have to pay less on internet, power, phone, electricity, and water bills.
According to a survey, the average utility cost for commercial buildings is $2.10 per square foot. While that figure may vary in different states and the building grade, it will make a massive difference in cost savings at the end of the month.
The exciting thing about these savings is that you can reinvest in developing a new product or service that will boost your cash flow. You can even offer to increase your workers’ pay, which would enhance their performance and business loyalty.
If you offer your workers refreshments in your physical office, you will not have to spend much when you delay the return to the office.
As a business with remote workers, you can eliminate this cost, which will boost your income.
Taxes are an employer’s nightmare. As a business owner, you are expected to pay taxes on your employee payroll, property, and on sales made. Delaying the return to the office could drastically reduce your property taxes.
Lower Relocation Fees
Another way delaying your official office return will lower your expenses is in the area of relocating your employee. Remote working allows your business to run smoothly without having to offer your worker’s relocation expenses.
According to a report, the average relocation package costs between $21,327- $24,913 for an employee paying rent. For homeowners, the figure is anywhere between $61,622 – $79,429. Putting a brake on office resumption will save your business from these compelling costs.
On the plus side, there are some benefits to remote working or implementing a hybrid office. According to a study, remote workers are 13% more productive than their office counterparts. Because remote workers are not in a noisy, commercial environment, they are not easily distracted.
Research already shows that employees would opt for remote work rather than a pay raise. This is a win-win situation for employers – as you are going to reduce expenses while making substantial profit margins.
Reach out to us to see how we can help you lower your costs for an improved profit.
Published by Marc Freedman
Marc currently serves as our Chief Cost Evaluator, expertly advising our client management team on how to help you successfully achieve your business and financial growth goals. A respected mentor to all he consults with, he is an avid collaborator and contributor to the spend consultant community, guiding thought leaders to formulate, design, and install the best operational solutions available to their clients.