⟨ Back to News & Events ⟨ Back to Blog
Weigh the costs and benefits to a remote workforce in the P&C insurance industry. | WaterStreet Company

The Long-Term Costs of Working from Home

It’s been one year since many employees across the country and around the world have begun working from home due to the COVID-19 pandemic.

This has left many companies, including insurers, wondering what are the real long-term costs of not having employees in the building?

WaterStreet Company is here to help inform insurers of trends. We are a provider of P&C Policy Administration Software, supporting insurers through policy and claims administration, document management, third-party connections and more.

Request a Demo

Costs of Remote Workforce

The costs of suddenly switching to remote work caught many employers by surprise. There are several key areas to focus on when measuring the costs, but the greatest risk is uncertainty. As of June 2020, Insurance Journal found 60% of insurance industry respondents had worked from home 100% of the time since the pandemic.

Employee Movement

If employees have moved to a different state since working remotely, employee income tax varies between states. If your company has onboarded new employees during the past year, these may include out of state employees.

Many companies may consider which jobs could be eligible to continue working from home. It may be difficult to measure performance for jobs in management and support roles. Be sure to assess work from home agreements and set expectations before certain employees can receive permission to continue working from home.

Company Culture

Consider the company’s culture and how it has changed or has been cultivated over the past year. New employees have a very different perspective on working for your company. Companies take years to develop a consistent, effective workflow, and this may be disrupted. Identify key areas with bottlenecks they may have become apparent over the past year.

Quality of service is an important consideration. If employees working from home are responsible for communication with customers, can the desired service level in this environment be guaranteed? During 2020, customers may have been more understanding, but going forward this is likely to be a greater issue.

Overhead & Maintenance

Then, of course, there’s the overhead. All companies holding on to office space are leasing locations employees are not using. Administrative jobs may have returned as-needed during lock down, but the majority of offices have been left unused. Electricity bills, cleaning costs, water bills, leasing payments and more may be included as factors for overhead.

Businesses should closely consider how remote equipment and network issues have been handled and can be improved. Companies that begin to take over responsibility for internet, firewall and equipment in a person’s home may have unexpected costs to maintain the right environment for high quality of service.

Bottom Line:

  • New tax calculations for employees working out of state.
  • Consideration for which employees can remain remote.
  • Shifts in company culture due to a remote workforce.
  • New employees may have a tougher time transitioning out of working from home.
  • Overhead costs to keep office space available weighed against the costs of maintaining remote protections for employees.

Benefits of Remote Workforce

On the other hand, there are many benefits to allowing employees to work from home.

One 2019 State of Remote Work study by Owl Labs found 83% of respondents believe the ability to work from home makes them happier, and 34% would take a pay cut of up to 5% in order to work from home at least some of the time. Of the remote workers surveyed, 55% said they would likely look for a new job if their employer no longer offered a remote position.

Working from home has allowed employees to achieve a better work-life balance, spend more time with their families, cut down on long commutes, reduce stress and focus in a more comfortable daily environment.

Employers are also saving on costs associated with reimbursing remote workers’ expenses. According to one survey by Nulab, nearly one in three workers purchased office equipment in order to work from home during the pandemic. This equipment ranges from computers and printers to paper and pens, none of which employers are currently required to reimburse, removing the need to supply a main office with such equipment.

Employers should consider both the pros and cons to remote employees as a blend of each could meet workplace requirements.

How to Transition “Back to Normal”

The burden of switching back to working on-site falls mainly on the employees. After a long period of remote work, returning to the office can be a challenge. Employers should expect to make accommodations for employees during the transition.

Google is one example company that had switched to remote work in 2020. This year, the company has planned to create new office spaces and data centers, investing over $7 billion towards creating 10,000 in-office jobs across the country.

Be aware of the following when calling for employees to return on-site, as these individual struggles can be improved with the oversight of management:

  • Encourage many of the same at-home conveniences, such as easy access to coffee, potted plants and a more casual dress code. Ask employees what they are missing most about working from home and help them achieve the same level of comfort.
  • Check how employees have adapted to new equipment and technology from home. Consider new office equipment, such as ergonomic chairs and upgraded headsets, to kick off a positive transition back to the office.
  • Encourage routines in the office and help facilitate in-person meetings on a scheduled basis. Many remote workers have a fine-tuned routine, and being called to meet in-person suddenly can be an unexpected disruption. Respect each employees’ boundaries around time management and schedule in-person meetings when possible.
  • Continue effective communication. When people return to the office, don’t assume everyone is now part of a hive mind. It’s easy to fall behind on work communications when seeing people again as other topics are more natural to chat about, such life changes over a full year of distance.

Working from home is both a challenge and an opportunity. Many employers were suddenly forced to offer remote work, and it has led to positive growth in several ways. Be aware of these challenges and remain open to new opportunities as employees venture back into the office.

 

Reach out to WaterStreet Company today to request a consultation and demo.

Posted in: ,