Blog header with two images showing working from home and working in the office

12th April 2023

What’s Cheaper: WFH Or In The Office?

Carissa Parnell

Cost savings are frequently presented as the biggest advantage of working from home (WFH).

A remote workforce can have numerous benefits for both the home working staff themselves and your business. Yet the financial considerations are usually at the forefront of decision-making about WFH policy for businesses. Monetary gain will be one of the core reasons that a company would facilitate a predominantly WFH workforce.

But is WFH really cheaper?

We’re going to explore the cost analysis to find out.

Firstly, whether WFH or working in the office is cheaper depends upon the perspective you take.

Is it cheaper for the business itself or for the employees or both?

These are two entirely different perspectives and what might be cheaper for one may not be for the other.

Is WFH Cheaper For Employees?

This side of the equation has become far more complicated in the last few months.

Back in late 2021 and earlier in 2022, the answer to whether WFH was cheaper would have been a simple one-liner: yes. It was definitely cheaper for both businesses and employees. Businesses saved on energy bills and rent. Employees saved on petrol and other commuting costs, as well as periphery expenses like buying lunch and coffee, etc.

In 2020 and early 2021, WFH was still clearly cheaper for employees. Some businesses had to undergo extra expenses to tweak their business model and infrastructure in order to set up to do WFH correctly. However, once those hurdles were sorted, it was cheaper for both.

Surprisingly, it now may no longer be the case that WFH is cheaper than being in the office for employees.

Since the outbreak of the war in Ukraine, and the skyrocketing energy prices, WFH has become expensive for workers, especially in winter.

For many in the UK, commuting to the office will now be more affordable thanks to the savings on their home energy and electricity bills by not being at home.

If we consider the new energy price caps of winter 2022, which was £3582 a year, the average worker will spend roughly £77 per month on energy bills to work from home five days a week.

In January, the cap rose, so workers could be spending £91.60 per month in order to work from home using electricity, heating, and internet costs.

These estimates do not ignore the government’s support package discounts for households. About 29 million homes received a £400 discount on energy bills.

While the data may seem crystal clear, nevertheless, it should be taken with a large pinch of salt since it assumes that the whole household is out at work all day.

If your employees have elderly living with them at home, or children under school age and a stay-at-home parent or guardian, then there is no saving on energy. In this case, they might as well save on the commute.

Whether or not WFH is cheaper than working in the office is very much dependent on peoples’ family and home status.Blog image 750×200 What’s Cheaper – WFH Or In The Office

Blog image with Money sign and working from home image with D4T cloud background Another major factor is location. Apparently, it would still be cheaper for London-based employees to embrace WFH as the cost of commute is so high there. Whether WFH is cheaper is extremely location specific.

Distance from work, local petrol prices, the type of transport you use, etc will all play a part in whether their commuting costs outweigh their energy usage costs.

Outside of London, driving to the office could save an average of £35.76 per month if we assume no one else lives in the house and stays home.

Interestingly, London office workers are still better off staying home than using the tube. They can make a saving of £85.60 per month across all six travel zones.

It isn’t just London though. High public transport fares in Nottingham, Glasgow, Leeds, Liverpool, and Sheffield make it a tricky decision whether to WFH or go into the office. Distance to the office will be an influence as well.

When we look at drivers rather than public transport, many would now make a saving by commuting to the office, despite rising petrol prices, as home energy bills have become so high.

Despite this, we should bear in mind that drivers in smaller cities like Cambridge save a lot less. They save only £16.18 per month by going into the office.

This data also assumes that your staff works in the same city in which they live. For those living rurally, and then commuting into cities, the story can be very different depending on where they live.

In conclusion, since October 2022, working in the office has become cheaper for a majority on the employee perspective but it is a very family circumstance and location-specific calculation.

However, WFH could once again become cheaper for staff if they make some savvy lifestyle changes.

Having more energy-efficient homes would shift the balance in WFH’s favour for affordability.

How To Make WFH Cheaper Than Going To The Office For Employees:

  • Better home insulation
  • Switching to sustainable boilers and heat pumps
  • Only heating one room instead of the whole house if you are in one room
  • Switching to energy-efficient lighting throughout the home

Is WFH Cheaper For The Business?

Interestingly, the very same reason why WFH has become more expensive for employees is the very same reason why it is the even cheaper option for businesses.

Prior to the rise in energy costs, WFH could be cheaper for businesses if the majority of their workforce or all of it transitioned to WFH. This is because they saved on energy bills while staff are not in the office.

For those who made the move permanent for all staff, they had the option to close offices permanently and thereby save on rental bills too.

The rising energy prices and cost of living crisis have only exaggerated this position for businesses.

Apparently, some companies could save up to £6k a year by fully embracing WFH staff.

According to calculations by Global Workplace Analytics, certain businesses can save over $500 billion a year in real estate, electricity, absenteeism, employee turnover, and productivity.

This is because:

 

Sun Microsystems, Dow Chemical and Nortel are examples of companies that have made particularly large savings as a result of transitioning to WFH staff. The former identified savings of $68 million a year in its real estate costs, while the latter have saved over 30% on non-real estate costs.

It is interesting to note, from the above research, that rental, and energy saving costs are not the only factors that make WFH the cheaper option for businesses.

They also stand to gain more profits from their workers’ increased productivity.

In spite of many companies’ misgivings, WFH staff do appear to be more productive according to research. A Stanford states that WFH employees are 13% more productive.

This is down to increased work/life balance and, therefore, job satisfaction, but also reduced stress from not commuting and fewer distractions from a loud office environment.

WFH isn’t just about the financial benefits. There are many other advantages.

 

Other Advantages of WFH:

  • Happier staff – A benefit for businesses since they work harder, are more productive, and have better talent retention.

 

  • Better work/life balance – A benefit for employees who can spend less time commuting and more time enjoying their private lives.

 

  • Can access talent living anywhere and get the very best candidates – A big business benefit as they can hire the very top candidates with expert skills regardless of where they live.Blog image with a group of people connecting hands

Businesses Are Now The Main Beneficiaries of WFH Cost Savings:

So, as we can see, whether WFH or in-office working is cheaper, very much depends on which perspective you are taking.

For businesses, the outcome is clear; WFH is the cheaper option.

For employees, the answer is more complicated. For many, working in the office is cheaper, yet for some WFH remains cheaper and has added work/life balance benefits.

How Can WFH Be Even More Affordable For Businesses?

Businesses can incorporate the best WFH laptops from suppliers like Devices For Teams to assure their position.

Engaging with a DaaS service like Device For Teams makes WFH even more cost-effective for businesses. The reason is that Devices For Teams makes the necessary extra expenditures of WFH employees more affordable.

Devices For Teams can provide the best laptops for remote work with the cost spread into monthly bite-sized chunks to improve a business’s cashflow.

Additionally, DaaS computer leasing models help companies save more money by incorporating so many extra IT services. There is technical support, strategic support, cybersecurity, remote deployment, and MDM management.

All of this makes work from home laptops more secure, and easier to distribute and manage.

Therefore, businesses can save on time and save on hardware, as well as reduce their rental and energy bills by transitioning to a WFH workforce.

Devices For Teams can advise on the best laptop for office work and WFH laptops so that companies can lease the right array of devices for their unique structure and business goals.

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