Should I Have More Employees Work Remotely in the Future?
Life has obviously pelted us with lemons in the form of this terrible and devasting virus. It isn’t hard to find negativity and despair, but what can we do to pick up those lemons and make lemonade? Or lemon drop cocktails if the need arises.
The answer is to use the current work from home trends to determine whether you can save on future office space expenses. For most businesses, office space is the second biggest expense after payroll. Is there potential for your business to capitalize and get leaner as a result of this forced experiment? Absolutely.
This virus has temporarily changed the way we work and interact with our employees so take this time to evaluate the effects. Over the last few months, employees have learned to use Zoom, communicate remotely, and do their jobs without being in a room together. The real question is whether this new normal communication is more or less efficient than being in an office together.
Unless your business is completely unaffected by the coronavirus, don’t focus on variable metrics like sales and accounts receivable. Decreases in those categories are likely to be directly tied to the current economic instability.
Instead focus on whether employee productivity has increased, decreased, or remained consistent in the last few months. Make a list of your employees and review each’s productivity in categories such as responsiveness, quality of work, and general work attitude. You will likely find some employees are thriving in the current work from home environment while others are struggling. To be clear, struggling in a work from the home situation does not mean they aren’t great employees.
With that said, this is valuable information for business owners because it allows you to reevaluate how much office space you have to pay for. Let’s say you have 6 people in your 1,500 square foot office space. After evaluating remote work potential, you determine 2 specific employees can (and would value) working remotely. This allows you to lower your number of employees in the office to 4 and move into a 1,000 square foot office space for rent. Let’s say you like high-quality office space in Folsom, CA which runs about $2.00 per square foot. That slight downsize saves $1,000 per month (500 square feet x $2.00), $12,000 per year, and $60,000 over the course of a 5-year lease.
Of course, it all depends on whether remote work can benefit your business. You may determine productivity has plummeted and you need everyone in the office every day. You may determine that everyone can work remotely and you can completely remove office space rent from your expense budget altogether. The key is to do this analysis while external forces are creating the conditions for the experiment.
If you determine you need to downsize, expand, or relocate your office space, Carlsen O’Connell Commercial Real Estate is here to help. We offer a FREE service to help business owners find office space for rent and commercial real estate to buy in Folsom and the Greater Sacramento Area.