According to Workforce.com, a growing number of organizations are offering telecommuting as an answer to pricey real estate, particularly in places like New York and San Francisco, where office space is still expensive.
As the economic downturn continues, many companies are looking for new ways to cut costs.
A growing number of organizations are offering telecommuting as an answer to pricey real estate, particularly in parts of the country like New York and San Francisco where office space is still expensive despite the dismal real estate market, observers say.
“A couple of our clients right now have a stated business strategy to decrease office space,” says Janice Hand, a senior consultant at Hewitt Associates. “And to do that, they are discussing giving certain employees the ability to work off site.”
Since technology made it possible employers have recognized allowing employees to work at home as a key perk and valuable in helping oto attrack and retain key employees, including those that did not wish to relocate. Observers claim that during the past several months companies are also attracted to allowing employees to work at home as a way to reduce real estate costs. Additional and significant benefits include helping employees cut down on gasoline costs and balance their lifestyles with less stress.
Real estate is a major overhead expense. Additional overhead expenses related to real estate include utilities, maintenance, cleaning, furniture, hardware, bandwidth and more.
Some observers have noticed as much as a 10 percent increase in office vacancies as more companies allow employees to work at home.
Workforce.com reports that one San Francisco-based technology company saved $67.8 million in real estate costs in fiscal 2006, she says. More than 18,000 of their employees are allowed to telecommute.
Some companies continue to pay for the office workspace of key employees AND pick up the tab on their home-based workspace. The cost is obviously even higher than necessary for these telecommuting employees, but companies have found that providing key employees the valuable perk of working at home is worth it.
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