During the COVID-19 pandemic, a few prominent companies announced their plans to transition to “remote-first” or hybrid operating models permanently. This means that tens of thousands of employees will have an option to continue working from home indefinitely. Companies will also be able to close some of their physical offices and redesign the remaining office space for collaboration and socialization.
We see a lot of interest in understanding the economic and societal impacts of this transition. Global Workplace Analytics and Stanford shared their estimates and point of view on this topic:
Savings for Employers
A typical employer can save an average of $11K per half-time remote worker/year. That’s from a combination of increased productivity, reduced turnover, absenteeism, and real estate costs. According to Global Workplace Analytics Telework Savings Calculators, if those employees who held telework-compatible jobs (50% of the workforce) and wanted to work at home (79% of the workforce) did so just half of the time (roughly the national average for those who do), the economic benefit would total over $700 billion a year.
Savings for Employees
A typical employee can save between $2.5-4K/year by working at home half the time. Those savings are primarily due to reduced costs for travel, parking, and food. They are net of additional energy costs and home food costs. In terms of time, a half-time telecommuter saves the equivalent of 11 workdays per year in time they would have otherwise spent commuting. Extreme commuters save more than three times that amount. These estimates assume a 75% reduction in driving on telework days.
Eliminating or reducing commuter travel is the easiest and most effective way for a company or individual to reduce their carbon footprint. If those who have a work-from-home compatible job and a desire to work remotely did so just half the time, the greenhouse gases would reduce by 54 million tons – the equivalent of taking almost 10 million cars (the entire New York State workforce) off the road for a year.
Growth of city centers are expected to stall. The largest U.S. cities have seen incredible growth since the 1980s as younger, educated Americans have flocked into revitalized downtowns. But it looks like that trend will reverse in 2020 – with a flight of economic activity out of city centers. The upside is this will be a boom for suburbs and rural areas, as many companies will be moving from high-rise offices to industrial parks with low-rise buildings.
What are the implications for teams?
Virtual work is here to stay as the economic and societal upsides are too significant to ignore. Teams need to have an open conversation about the tradeoffs of virtual ways of working and the best ways to capture the benefits while maintaining and improving connection, collaboration, and productivity.