News built for finance pros
CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.
To be or not to be paying for remote work, that is the question.
There’s been a lot of press—and hand wringing—over whether companies should make employees return to the office. Some organizations want butts back in those monochrome cubicles immediately, while other companies are chill with the working-in-your-pajamas-indefinitely vibe.
There’s no easy answer. Lots of companies invested big in marquee headquarters and office space that is now sitting empty, draining budgets without much return. But employees like the flexibility (and non-commute) of remote work.
So what’s a finance department to do? Setting aside philosophical arguments about whether workers are more productive while a boss with stale coffee breath looks over their shoulders, or when an afternoon couch nap is an option, CFO Brew wanted to look at some of the financial costs, and benefits, of remote work.
Cost: If you want to reduce your office space footprint, breaking leases and moving out of those offices is expensive. Meta is spending nearly $3 billion to pare down its office footprint, according to its most recent earnings call. The Wall Street Journal reported last summer that several companies were taking multimillion-dollar, one-time write-downs related to real-estate reduction expenses.
Benefit: But after those initial financial losses, companies are looking at significant savings by going remote. According to an analysis by Global Workplace Analytics, a remote-work consulting firm, remote work could save US companies $500 billion annually, or $11,000 an employee.
Cost: Employees need a lot of stuff to work remotely—computers, monitors, new software—and that can add up. A 2021 Gartner survey also found that costs related to employee wellness-support programs, like virtual mental-health support, have increased and will likely continue to grow.
Benefit: Employees love it. A recent McKinsey survey found that 87% of employees take the opportunity to work remotely if offered. A Robert Half survey found that 50% of remote employees would look for a new job if required to return to the office full-time. And in this tight labor market, anything companies can do to attract and retain employees is a positive.
Cost: Remote work leads to increased security vulnerabilities and overall IT spend, according to a March McKinsey study. And a cyber breach is not cheap, with the average cost of a data breach in the US reaching $9.4 million, according to IBM’s Cost of a Data Breach 2022 report.
Benefit: Employees seem willing to take a lower salary in exchange for remote work flexibility. A 2021 Gartner study found that 62% of employees who would relocate to a cheaper location if offered permanent remote work were willing to accept a lower salary in exchange.—DA