Since the onset of the COVID-19 pandemic in 2020, remote working has grown significantly in popularity in the UK. Although triggered by a once-in-a-generation global event, this is a trend that appears to have turned into a permanent culture shift. Indeed, according to a recent BBC study, 50 of the largest employers in the UK have confirmed they have no plans to return staff to the office full-time in the wake of the pandemic.
When it comes to employees, the advantages of working from home are there for all to see. Both time and money can be saved when it comes to the work commute, and, for many, this means a better balance between work and family life can be struck. For this reason, it should come as no surprise that this global culture shift is a popular one. However, do employers also see similar benefits?
In this guide, we take a look at whether or not companies can save money from allowing remote and/or hybrid working. We also outline relevant insurance requirements, helping to ensure your business is always fully covered.
Work from home (WFH) refers to the policies employers put in place that allow staff to work from their place of residence rather than the office. These policies outline the guidelines for employees working from home full time, or as part of a hybrid policy. As the name suggests, hybrid policies see employees split their working week between the office and their home. While some businesses specify the split formally as part of your contract, others are more flexible and allow employees to set their own working patterns.
The most obvious saving companies can make from introducing a flexible working policy comes in the way of lower overheads. This happens in a number of ways. Firstly, utility bills can be reduced. Fewer employees in the office, less of the time, means a smaller amount of electricity and gas needed to heat and power the work premises. Naturally, this can result in reduced annual utility bills without having to compromise on productivity or quality of work.
On top of this, money can be saved on the office space itself. With fewer employees travelling to the office each day, businesses can downsize to smaller premises. All in all, you may be surprised by how big of a difference these changes can have on your business’ bottom line. According to Global Workplace Analytics, when it comes to reduced overhead costs, the average business can save around $3,000 (£1,857) per year for every staff member who works remotely for 50% of the week.
One of the main employee benefits of working remotely is the flexibility it affords. After all, when an employee is allowed to work from home, they are awarded the time. This comes from time saved on workplace commutes. In turn, this can improve employee morale and prevent them from burning out or wanting to leave their job. Similarly, employees working from home are also less likely to complain about working longer hours, knowing when they are finished they don’t have to worry about a later commute home.
This can also be an advantage for employers too. This is because when employees are more content, they are less likely to leave. This fact is highlighted in Owl Labs’ recent State of Remote Work report, which showed businesses that allow remote working have 25% lower employee turnover than those that don’t. Retaining employees means reduced costs when it comes to recruitment fees, not to mention lost productivity during the recruitment process.
On top of this, remote working allows your business to recruit from a larger talent pool. This is because if employees are not expected to travel to your office each working day, location becomes less of a barrier to recruitment. This means you are more likely to hire the best possible candidate for the job. This can have financial benefits when it comes to improved productivity.
According to Global Workplace Analytics, 36% of employees would prioritise the promise of remote work over a pay rise. Going a step further, 37% of employees would actually accept a 10% pay cut in order to work from home.
Of course, businesses should always endeavour to pay their employees a fair and competitive wage. This means they should not financially penalise employees who choose to take advantage of work from home policies. That being said, the fact is, employees can save a good deal of money when working from home. According to Real Business Rescue, the average UK employee spends £126 a month commuting. Over a year, this equates to over £1,500. Depending on the nature of your remote working policy, these savings can entice employees to accept a lower annual wage. This can mean reduced payroll costs for employers.
An often overlooked factor, many businesses that implement a remote working policy also witness productivity increases. Indeed, a recent study of 16,000 workers carried out by Stanford Business School found that, over a 9 month period, employee productivity increased by 13%. This performance boost was put down to:
Although it’s true that a business’ social culture can suffer due to remote working, when it comes to a business’ bottom line, increased productivity tends to lead to larger profits. This means businesses can get more value from their employees, saving money in the process.
Put simply, yes. If you employ staff that work remotely, employer’s liability insurance is a legal requirement. This is the case regardless of whether the employee works fully remotely or as part of a flexible work arrangement. If your business is found to be employing staff without the correct cover in place, you could face a fine. This could be as severe as £2,500 a day.
Freelancers and sole traders working from home have their own set of insurance requirements. For example, if you use your residence to meet with clients, you should consider public liability insurance. Similarly, you may also want to take out equipment and tool cover. Depending on your policy, this can provide financial protection should your vital work equipment become lost, stolen or broken while in the home.
Here at Caunce O’Hara, we offer comprehensive Work From Home Insurance. These policies can be tailored to provide self-employed home workers with the required liability covers, as well as protection for their business equipment used in the home. This can include laptops, mobile phones, and all general business contents.