Everywhere you look, experts speculate about a potential recession in 2023. Owners are already searching for strategies to assist them to cut costs and avoid going broke.
According to a recent analysis by Lemon.io, a marketplace for certified software developers, companies that offer remote work options could save as much as $10,600 per employee annually. If the United States does indeed experience a recession next year, as many experts forecast, these additional savings would be beneficial to businesses. Many companies could be forced to cut costs in the event of an economic downturn.
According to the report’s calculations, companies can save $5,580 per employee per year just by reducing office rental costs. But expenses other than office space also put a strain on the budget. The analysis concluded that companies could save more than $2,000 per person in operating costs – which includes costs for repairs and maintenance – assuming workspaces should be at least 120 square feet per employee.
Compared to the one-time costs like seats and computer equipment, office snacks like coffee and tea save about $1,300 per employee annually.
Some companies do reimburse for Internet, cell phone, and remote desk setup, but these benefits usually come at very little cost to the company. Only 3% of employers surveyed by the Employer Council in February gave their employees a lump sum or reimbursement for home office equipment. The typical monthly allowance was about $66.
In addition, a study by research firm Global Workplace Analytics found that employees who work from home at least two to three days per week can save up to $11,000 annually.
However, the bulk of American businesses operate in a hybrid capacity, with some employees reporting to the office and others working part- or full-time from home. Lemon’s team claims that their figures are based on the idea that businesses rent offices depending on the number of people who actually work there, particularly in today’s uncertain economic climate.
To truly lock in the savings by reducing their overall office space, hybrid offices may need to be proactive in identifying which employees are remote, hybrid, and in-person.
A recent 2022 BOMA International COVID-19 Commercial Real Estate Impact Study found that 86% of corporate operations decision-makers believe that the office is “essential” to their firm, despite the fact that working remotely may be less expensive.
However, nearly 30% of the 1,200 decision-makers in the commercial office space industry believe their workforces will continue to be largely or entirely remote for the next 12 to 18 months. And as a result, 7 in 10 say they are reevaluating their requirement for office space, with 61% saying they would lower their square footage.