Rob Palmer I have been blogging and living the digital nomad lifestyle since 1999. I help people create an online income so they can go anywhere, do anything and be anyone.

10 Ways Telecommuting Saves Employers Money (Benefits & Advantages)

4 min read

What You Will Learn: Why telecommuting is a smart choice not just for employees, but for employees, too; Ways telecommuting improves productivity, attendance and more; Top tips for making the most of the potential of telecommuting

Employees love the idea of telecommuting, but it has major advantages for employers, too. Here are 10 major benefits to consider.

What You Will Learn

  • Why telecommuting is a smart choice not just for employees, but for employees, too  
  • Ways telecommuting improves productivity, attendance and more
  • Top tips for making the most of the potential of telecommuting

The Smart Choice for Employers

While many commuters remain dubious, telecommuting has become a continuing trend that looks unstoppable. It has grown a massive 80% since 2005, according to Global Workplace Analytics - and is becoming more popular year by year.

Employees love telecommuting, of course, because it offers them a lot of freedom and options. They can:

  • Work from home 
  • Do flexible hours
  • Cut out commuting time
  • Spend more time with their family 
  • Save on travel costs
  • Avoid office politics
  • Be more productive

But there are many good reasons why employers should champion telecommuting, too. Most importantly, there are many ways in which allowing employees to telecommute can save employers a lot of money.

1. Increasing Productivity

Published research shows that telecommuters actually work harder than office-based employees. They are almost twice as likely to work more than 40 hours a week (53% compared to just 28% for regular workers)

It’s true that the results vary according to the type of work done. Research shows that home-based work is less effective if the workers are performing rote, repetitive tasks. But for more creative work, home-based workers are motivated and perform extremely well when telecommuting.

You can also redress productivity declines by using online productivity tools and apps. The key here is good management - you need to know who will perform best in a telecommuting environment and help them achieve success.

2. Improving Retention Rates

One of the major benefits of telecommuting is that it typically leads to higher job satisfaction and improved loyalty to the company. This reduces attrition rates, which in turn leads to lower hiring and training costs.

One study showed that 37% of U.S. employees would be 'very likely' to take the telecommuting option if it was offered by their company.

A study by Staples Advantage shows that 80% of workers who were allowed to work from home reported greatly-increased job satisfaction levels, and enjoyed a better work-life balance.

Telecommuters are happy to quit commuting.

Telecommuters are happy to quit commuting.

And that’s not all. They also reported 25% lower stress levels. Some 73% said they ate healthier food when working from home, and 76% said they felt more loyal to the company.

These factors are important when you consider that the average company will lose between $10,000 and $30,000 for each employee who leaves. So keeping employees happy through telecommuting can deliver huge savings in human resources costs.

3. Reducing Salaries

An analysis of over 500 telecommuting studies by Global Workplace Analytics is revealing. It shows that given the choice, 36% of employees would take the option to telecommute over a pay rise.

In IT, 37% of professionals would even take a 10% cut in pay if it meant they were allowed to work from home. When you consider that technology professionals are amongst the highest-paid workers, this is an important factor.

Offering telecommuting not only reduces the need to offer increased financial incentives to employees, it also makes the company more attractive to new hires. The combined cost benefits add up to big savings.

4. Reducing Time Off

When employees call in sick, companies are wasting money paying salaries without getting anything done. But telecommuters are actually less likely to call in sick than office-based employees.

Home-based employees are more likely to continue when they are sick. For example, an office-based employee who catches a cold may take few days off to avoid infecting colleagues. But a home-based worker may continue working as usual.

Research also shows that telecommuters are more likely to resume work quickly after sickness or other medical absences. After all, switching on your laptop at home is much less demanding than facing a full week at the office.

As sick days cost employers around $1800 per employee each year, cutting down on these costs can make a real difference.

5. Lowering Stress

One key factor to consider is the reduced stress associated with telecommuting. Home-based workers are happier and less likely to take time off due to stress.

"One key factor to consider is the reduced stress associated with telecommuting. Home-based workers are happier and less likely to take time off due to stress."

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With up to 78% of sick leave being attributed to stress or related personal issues, this is important. Home-based workers are able to avoid office politics, personal confrontations and the sometimes awkward environment of the office.

The result is lower stress, happier employees - and less time off work.

6. Cutting Trivial Absences

We all have to accommodate various personal matters into our lives. For office-based employees, having a new fridge delivered may mean taking the day off to receive the goods.

A one-hour dental appointment may require a half-day off work, while an unexpected emergency such as a burst pipe means a whole day is wasted.

Telecommuting employees, however, are in a much better position to incorporate these issues into their daily life without taking much time off. The new fridge can be received and installed in 20 minutes, and the employee can be working while the plumber fixes the burst pipe.

And when some time out is necessary - such as the trip to the dentist - telecommuters will often compensate by working an extra hour or two in the evening.

7. Reducing Office Space

Office space is expensive, especially in the center of big cities. And it’s not just the cost per square foot. When you have office-based employees, you also have to factor in the cost of utilities, janitorial services and insurance.

Telecommuters can work from anywhere

Telecommuters can work from anywhere

Research shows that companies who allow people to work from home even 50% of the time can save around $11,000 a year on office overheads.

8. Lowering Incidental Costs

Providing free perks to employees can be expensive. Even the mighty Google has had to cut back drastically on its original model of free meals and generous perks for everyone.

Simple expenses like coffee supplies, water coolers and office ‘toys’ can add up over time. Yet telecommuters expect to pay for their own coffee and water - and certainly don’t expect you to provide them with a ping-pong table or a beanbag.

Cutting down on these additional costs can make a significant difference to your bottom line. Every dollar counts!

9. Reduced Subsidies

Companies based in expensive cities often have to contribute towards transport costs in order to attract the best employees. This can mean paying thousands of dollars to help cover expenses such as annual rail cards.

Subsidising train fares can be expensive

Subsidising train fares can be expensive

When employees telecommute, this becomes a non-issue. The employer saves money on contributing towards these costs - and the employee cuts out a long commute, leaving more hours in the day to get things gone.

10. Attracting the Best Team Members

Offering telecommuting as an option may be a real draw to potential hires. This is particularly true for women, who are more likely to have concerns over child care and related matters.

The result is that companies who are open to telecommuting can attract top talent and build a first-class team. This leads to better performance, driving higher sales, revenues and profits for the company.

The result is a more efficient and effective organization that achieves its goals faster. Perhaps that is the best reason of all for embracing telecommuting today.


What You Will Learn: Why telecommuting is a smart choice not just for employees, but for employees, too; Ways telecommuting improves productivity, attendance and more; Top tips for making the most of the potential of telecommuting

Telecommuting Tips

So it’s clear that telecommuting has a lot to offer to both employers and employees. Yet many companies are wary of taking the plunge. For sure, there are some valid concerns…

“How will I know if my employers are actually working? How can I measure what they get done? What tools will we use to work together? How can we conduct meetings?”

Thankfully, we live in a world in which all of these questions can be answered effectively by technology. Tools such as Time Doctor and Rescue Time make it easy to stay on top of productivity.

Free tools such as Google Docs make collaboration easy, no matter where your team is located. And video conferencing software like Skype and Zoom makes face-to-face meetings irrelevant.

Telecommuting is changing the way we live, work and do business. You can either embrace the concept, or get overtaken by more flexible competitors.

Which choice will your company make?

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Rob Palmer I have been blogging and living the digital nomad lifestyle since 1999. I help people create an online income so they can go anywhere, do anything and be anyone.
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