The hidden costs of remote work for businesses
Covid-19 has banished most office workers from their usual place of work. Working from home is the new reality for most of us, and it’s likely to continue at least until the first half of 2021.
There are some obvious benefits to working from home for both businesses and employees, beyond containing the virus. Businesses save on operational costs; employees experience improved productivity; and the company is able to hire from a larger talent pool.
However, there are some downsides to remote working that are often overlooked. Companies need to make sure they’re factoring in all costs involved with managing a distributed workforce, before deciding to introduce an official remote-working policy.
Four hidden cost areas to consider
Home working has many practical and legal implications for employers, who need to create health and safety policies that protect employees and company equipment. If you don’t already have a remote working policy in place, you should look into what’s required. This kind of insurance typically covers personal injury in the new working location; damage or theft of company equipment; and cyber-related breaches. Note also that insurance requirements for Covid-related working from home will differ from country to country.
For example, UK businesses must have employers’ liability insurance that covers remote working. And employers can be fined up to £2,500 for each day it doesn’t have an adequate policy.
While insurance is not cheap, the repercussions of not having the right policies in place can cost you much, much more.
2. Paying international employees
Many employees have asked to work from home overseas throughout the pandemic, for a number of reasons. Some have chosen to spend this time with family; others feel their home country is safer; and we’ve previously covered the trend of employees returning home due to the uncertainty around Brexit.
Companies that agree to these requests should think about how salaries will be managed. Consider whether you’ll pay your global workforce in the company’s base currency, or in the currency of the country employees are living in. Look into the implications of fluctuating exchange rates and transfer fees, and see what works best for your finances. If you decide to pay employees in a different currency, keep in mind that banks charge up to 8x more than other currency exchange solutions such as CurrencyFair. We offer competitive rates - on average 0.45% on the interbank rate - and no hidden costs, so you’re always in control of what payroll is costing you.
3. IT infrastructure and equipment
You should also allow for the extra costs around IT infrastructure to support telework if you introduce an official remote working policy Remote workers may need access to:
Secure company systems, software, and data.
Support from home for their technical issues.
Extra virus protection.
Home office equipment - desks, chairs, printers, even shredders if employees are handling confidential documents.
And an employee using their own computer must still process information in compliance with data protection rules. You might need to run extra security training to cover any knowledge gaps.
Think through which elements you’ll need to put in place for your business, and whether these costs will be funded by your business, or by the employee.
4. Additional policies and assessments
Employers should carry out risk assessments for employees, and regularly review working from home arrangements. With Covid-19 guidelines in different regions changing from day to day, this needs to be managed constantly. HR and operations teams may be taken away from their usual work to undertake these new assessments. They must take time to consult employees whose working conditions have changed significantly. This new focus could mean other areas are forgotten. You might need to recruit more support, perhaps temporary HR consultants with expertise in remote working.
Work life after lockdown
For now, work looks very different. “Water cooler conversations” are a thing of the past. There’s no small talk outside a meeting room, while you wait for the people inside to finish. We’re literally speaking a new lockdown language - “let’s Zoom”, “I’ll Slack it to you”, “let’s try some blue Skype thinking”. Some evidence shows that staff who work from home are happier.
Other studies suggest that this current period of mass isolation is causing staff to suffer mental health issues. Many companies are proactive in addressing this potential issue and are helping their staff with exercise, diet and other wellbeing requirements.
Right now, at least, the decision to offer remote work is taken out of our hands. For the foreseeable future, employers must comply with Government advice and enable remote work where possible due to Covid-19. But after the pandemic, businesses will need to draw up a balance sheet of remote work pros and cons. A balance sheet that looks at the emotional as well as the financial impact. Decisions about long-term remote work must take everything into account.
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