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Insights Into Workplace Costs During COVID-19

Data & AI Solutions

April 13, 2020

The current COVID pandemic has created a new normal, remote work or work from home. Typically it is estimated that companies can save up to $ 11, 000 dollars per employee per year by enabling remote work. A recent study with the USPTO (US Patent and Trademark Office), as shown in the chart below, shows $38.2 million dollar savings for the organization by enabling remote working.

Letting patent examiners work anywhere increased fee revenue and cut costs Source: https://www.weforum.org/agenda/2019/08/companies-benefit-when-employees-work-remotely/

Post COVID, cost management will be a top priority for enterprises. It is appropriate for the management to come up with a mix of on-premise and remote working capability. However, before taking a call on the right mix, a clear understanding of cost break ups in maintaining office premises vis a vis costs for working from home must be arrived at.

It is important for the CFO to understand different cost implications of a workplace facility to take a right decision. Also, it is important to understand new working models like Hot Desks and its cost, and new software that might be required for better employee engagements – like Yammer.

In hot desking, office workers aren’t assigned a desk, but by prior booking they take any unoccupied seat when they need it. This concept has been around for almost a decade and has been successfully implemented by large corporates, and are of interest now for even smaller enterprises.

Some of the questions that organizations need to answer:

  • What is the cost impact of having employees in work from home model?
  • What is the cost impact of running the workplaces with lesser strength?
  • Post COVID, what percentage of workforce should I plan for ‘work from home’ to manage cost?
  • Which of my workplace variable cost can be controlled effectively?

Getting insights into workplace cost

Facility costs includes fixed and variable costs. Following are some of the points to be considered:

  • Determine the fixed and variable cost-
    1. Fixed cost consists of costs like rental, security and maintenance costs that must be borne irrespective of whether all employees work from premise or otherwise
    2. Variable costs are those that are impacted by the proportion of employees in office or otherwise – this includes costs like HVAC, electricity, data card & collaboration software like Webex
  • Determine the per employee cost for the variable cost
    1. The per employee cost for the variable cost has to be derived to assess the impact of ‘work from home’ on the variable cost

A what-if utility dashboard will need to be created which the finance team can use to manipulate the percentage of employees working from home to achieve the targeted cost savings.

Work Location Mix - Cost Analysis

Chart depicting the Work location mix and its cost impact from Hexaware framework for workplace cost management


In the current scenario, getting a quick understanding of potential workplace costs under different circumstances will help us stay productive and profitable.  Also, do share with us your thoughts on sustainable workplace cost management and how we can overcome these testing times effectively with minimal disruption.

About the Author

Aruna Narayanan

Aruna Narayanan

Aruna is a Data and Analytics professional with more than 15 years of experience and has delivered analytics for enterprises in Healthcare and Insurance. She is currently focused on bringing automation in adopting cloud modern architecture and in leveraging data analytics for cost optimization.

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