5 ways remote work saves money for both companies and employees


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This year, several companies have announced major plans to expand their remote work positions.

According to a recent Gartner survey on 317 CFOs, 74% of companies plan to permanently shift to more remote work post-COVID-19. Nearly a quarter of those plan to move 20% of their on-site employees to permanent remote positions. 

Some organizations are taking their commitments to remote work even further. Companies like Microsoft, Amazon, and American Express have permitted working from home until the end of 2020. Facebook and Twitter announced their employees will soon be able to work from anywhere in the world—if they’re willing to accept pay adjustments. 


How remote work saves money

Clearly, organizations are gravitating towards more remote and flexible work options—and for good reasons, too.

In the short term, remote work keeps employees away from crowded offices where the virus can spread. In the long term, organizations that regularly allow remote work are much better prepared for future disasters (e.g., a second wave of COVID-19). (See: 5 Reasons Your Organization Should Have a Remote Workforce.)


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One of the seldomly-recognized but critically-important advantages, however, is the cost savings for both employees and employers alike. Commuting, for example, is a pretty hefty expense when you consider that employees need cars, gas, and nearby accommodations to get to work. Employers also need to provide parking, which takes up a ton of precious real estate.

If your organization is on the fence about adopting more remote positions, consider the cost savings it can afford the entire business. Let’s look at the numerous ways remote work saves money:



According to Global Workplace Analytics, each remote employee saves companies an estimated $11,000 a year. Here’s how:

1. Real estate

With permanent remote employees, organizations can significantly reduce real estate costs or convert extra space into cafeterias, breakrooms, or more parking. According to CNN, Dell saves $12 million a year by offering 25% of employees flexible work options and consolidating the extra office space. 

It’s more than just space, though. With more remote staff, organizations can save on maintenance and support costs (e.g., air conditioning, snacks, cleanings) and redirect the spending to other areas.

2. Turnover

Remote work boosts happiness and productivity, which results in higher engagement and lower turnover rates. In fact, a survey found that 80% of employees would be more loyal if their company offered flexible work options. Considering that attrition could cost organizations 50% of an employee’s annual salary in hiring and training, retaining employees is a financially smart choice. (Check out this handy calculator made by LinkedIn).

3. Payroll 

Survey after survey shows that most employees are willing to take reasonable pay cuts in exchange for more flexible work options. Leading companies recognize this too. Facebook announced in May that employees will soon have the option to work from anywhere as long as they’re willing to take pay adjustments. 

This doesn’t have to be fully remote, either. Employers can negotiate shorter workweeks in exchange for lower pay. Similarly, employers can hire remote employees in lower cost-of-living areas and compensate them accordingly.

4. Productivity

A two-year study conducted by Stanford University found that after shifting to working from home, Ctrip, an online travel agency, saw an astounding 13% improvement in performance. Employees not only saved time and money from long commutes to the office, but they also achieved healthier work-life balances. Happy employees are highly engaged employees, and companies with highly-engaged teams show 21% greater profitability.

5. Travel

With technologies like unified communications, distributed teams can collaborate regardless of employees’ locations. The more colleagues collaborate over tools like team messaging and video conferencing, the more normal these practices become throughout the organization. Considering that travel will be significantly reduced in the post-COVID-19 workplace, and that a domestic business trip costs $949 per person on average, unified communications save organizations from excessive business travel spending.



Remote work saves the average person $4,000 a year when compared to office work, according to a study by Flexjobs. Here’s how:

1. Gas

Commuting is a huge expense for employees, especially those in highly-congested metropolitan areas. For example, the average worker in Los Angeles spends 119 hours a year stuck in traffic, and the average New Yorker spends $3,710 in gas each year. That’s a lot of time and money wasted.

By eliminating or reducing commutes, workers can save thousands on gas every year. They also avoid traffic, allowing them to focus on work from home.

2. Food

Not every company provides free meals to their employees, and considering that the average American spends $20 a week on restaurant lunches every week, that adds to over $1,000 a year. That doesn’t include coffee, which can be up to $1,000 per year.

Working from home means employees can provide for themselves and drastically reduce expensive restaurant and cafe spending. 

3. Car wear and tear

According to AAA, driving can cost up to 79 cents per mile if calculated conservatively. This includes fuel, wear and tear, depreciation, and insurance costs. The average annual car upkeep is $767, which can be significantly reduced without the work commute.

4. Professional wardrobe

Many offices still require that employees wear professional business attire. While there’s nothing wrong with a dress code, many employees update their wardrobes every year and frequently get them dry cleaned. Remote workers might only need professional attire during important meetings, allowing them to save on yearly clothing purchases.

5. Parking

Parking can be a huge expenditure for employees who work in large metropolitan areas. Most downtown offices don’t provide free parking to employees, which means commuters are paying thousands in monthly or yearly parking fees. In New York City, this could be nearly $5,400 every year on average. Remote work saves employees the frustration and hassle of dealing with parking.


Reduce spending and drive profitability through remote work

As organizations plan cost-containment measures to recover from the COVID-19 disruption, now’s the time for leaders to assess whether flexible and remote work is right for their businesses. Many organizations aren’t putting workers back into offices for several more months, and some have even extended work from home until the end of 2020.

Instead of forcing your organization and employees to return to offices, consider the cost savings for everyone involved. Employers can see tremendous returns in savings and productivity boosts, while employees save both time and money by reducing commutes and working from home. Considering that remote work will dominate the post-COVID-19 landscape, adopting remote work now will ensure organizations stay profitable and competitive in the future of work.

Make sure your employees have the right tools to communicate and collaborate when working remotely. Unified communications solutions combine team messaging, video conferencing, and cloud phone into a single platform for employee collaboration. Employees can switch between different modes of communication with a single click and reach their teams from any location in the world.

Originally published Jun 17, 2020, updated Apr 01, 2022

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