With very low unemployment in many of the world’s major economies, those seeking to attract talent should explore the benefits of recruiting employees that work from home. Since a number of these countries, such as the United States and the UK, are considered to be at “full employment,” where nearly everyone who wants a job has a job, the traditional formula of recruiting in the market where a company is located may no longer be as effective as it has been in the past. And since the top reason for quitting a current job is to increase wages, employers face the challenge of meeting candidate expectations for higher pay based on local salary ranges.
While remote work may not be viable for some positions, expanding the pool of candidates outside a specific geographic area allows employers to take advantage of the growing trend in telecommuting as well as potentially reduce attrition, decrease cost-per-hire and even improve productivity.
The Virtual Workforce is Substantial (and Growing)
A study by Global Workplace Analytics and FlexJobs released earlier this year reported that 3.9 million U.S. employees, or 2.9 percent of the total U.S. workforce, currently work from home at least half of the time. This number is up from 1.8 million in 2005, an increase of 115 percent. And as of 2017, 43 percent of U.S. workers worked remotely at least occasionally, up from only 9 percent of workers in 2007.
Growth in remote work is not limited to the United States. In the UK, one in seven people work from home, according to the Office for National Statistics. In Canada, nearly half (47 percent) of employees work from outside one of their employer’s main offices for half the week or more. And in Australia, the number of people who work from home has risen to 30 percent. The significant percentages of telecommuters is not the case for all economies. Eurostat reported earlier this year that working from home was slightly more common in the Eurozone than in the EU as a whole. And some non-Eurozone countries have a negligible virtual workforce. Bulgaria has only 0.3 and Romania just 0.4 percent of its workers working from home, as an example.
A Deloitte study on Global Human Capital Trends reported that 70 percent of employees value telecommuting, but only 27 percent of employers offer this option. Therefore, companies that provide opportunities for telecommuting may have a competitive advantage in attracting talent.
Reducing Employee Turnover and Increasing Productivity
While study results vary, there is evidence being offered that working from home can increase employee retention. One study by OwlLabs found that companies that support remote work have 25 percent lower employee turnover than those that don’t.
A study conducted by a Stanford University professor set up a control group between office-based workers and those were allowed to work from home. As the Harvard Business Review reports:
“Half the volunteers were allowed to telecommute; the rest remained in the office as a control group. Survey responses and performance data collected at the conclusion of the study revealed that, in comparison with the employees who came into the office, the at-home workers were not only happier and less likely to quit but also more productive.”
The professor noted that “The results we saw at Ctrip, (the company studied, which is the largest online travel agency in China and the owner of other travel sites worldwide including Trip.com) blew me away. Ctrip was thinking that it could save money on space and furniture if people worked from home and that the savings would outweigh the productivity hit it would take when employees left the discipline of the office environment. Instead, we found that…Ctrip got almost an extra workday a week out of them. They also quit at half the rate of people in the office—way beyond what we anticipated. And predictably, at-home workers reported much higher job satisfaction.”
Providing the option of working virtually can be a crucial factor in retaining valuable talent. If an employee needs to relocate temporarily for family reasons, such as caring for an older parent, or permanently due to a spouse’s job transfer, the employee can remain with the company by working remotely. Having this option available allows the employee to remain with the organisation while the employer retains experienced talent and saves the costs of hiring and training a new worker.
Cost Savings for Employers and Employees
This same Stanford study showed that the company saved $1,900 per employee working from home over nine months. Remote workers allow employers to save money on furniture, parking, office space, insurance costs and other expenses. Global Workplace Analytics’ research shows that a typical employer can save more than $11,000 per year for each half-time telecommuter, the result of a combination of increased productivity and reduced real estate, turnover and absenteeism.
The cost benefits of remote work also extend to employees. Those working remotely save on commuting expenses, depreciation on their vehicles if they drive and gain the time back that would normally be spent going to and from work.
Can Remote Work Be a Solution for Your Business?
The difficulties of recruiting locally and the potential returns of developing a remote workforce may be attractive, but it is also uncharted territory for many companies. How would you source candidates throughout the nation and even beyond? Can you develop recruiting processes, including interviewing, that are effective using video and other tools if you have only relied on face-to-face meetings until now? And once a candidate is hired, how will you manage the onboarding process remotely? The answers to these and many other questions confronting a company exploring a remote workforce option can be provided by a recruitment process outsourcing company (RPO). An RPO can provide the experience, technology and expertise to ensure your success as you remove the geographic limits of your talent pool.