Remote Work Proves Big Money-saver for Businesses

Coronavirus lockdown was boon to employers, research by personal consulting firm finds

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Csaba Posta, IT specialist working from home, studies with his daughter Vilma during the spread of coronavirus disease (COVID-19) in Budapest, Hungary, March 19, 2020.
Csaba Posta, IT specialist working from home, studies with his daughter Vilma during the spread of coronavirus disease (COVID-19) in Budapest, Hungary, March 19, 2020.Credit: REUTERS / Bernadett Szabo

The coronavirus pandemic opened up the eyes of Israeli employers and employees alike to the wonders of working from home: It saved employees hours of daily commuting time and cleared Israel’s skies.

But it has also saved employers – and to a lesser extent, employees – considerable money, a study conducted for TheMarker by the personnel consulting company Compvision has found. It estimated that an employee working from home at least three days a week saves his or her employer more than one month’s salary annually. Workers, too, also save thousands of shekels a year by working at home.

“Part-time working from home could potentially constitute real savings at no cost to the enterprise or its employees,” said Avi Nir, Compvision’s CEO. “All the research shows that giving more flexibility to employees improves rates of satisfaction and quality of life.”

Before the pandemic hit and Israel went into lockdown, just over 4% of Israelis worked from home. The figure grew exponentially during March and April as all but essential workers were told to stay home. As the lockdown eases, the question is how many employers adopt home-working more widely.

The coronavirus crisis provided the opportunity and it would be a shame if we don’t exploit it,” said Nir.

Compvision arrived at its cost-savings estimates based on three employee profiles – a high-tech worker earning 28,000 shekels ($7,900) a month before taxes; an economist earning a gross of 15,000 a month; and a bookkeeper making a pre-tax 10,000.

“These are professions you can find today in all large and medium-sized companies and salary levels that also exist in smaller companies,” said Nir. “Our analysis was based on very conservative models, so the savings could actually be even bigger.”

In the case of the high-tech employee, the total monthly savings was 3,200 shekels, or 38,400 annually. For the worker earning 15,000, the savings was 1,700 shekels a month, or 20,400 annually. For the worker making 10,000 it was 1,100, or 13,200 annually.. There were also one-time savings for the employer of between 6,000 and 8,000 shekels.

Most of the savings came from less commuting time and expenses. But there were also savings from the need for less office space.

The study assumed that employees work from home three days a week and come into the office for the other two to encourage employee engagement and maintain a personal connection with workplace colleagues.

Compvision assumed, conservatively, that the sample workers spend one to two hours a day commuting to and from work. Less commuting, it said, saved employers between 333 and 1,680 shekels a month, depending on the employee’s salary and commuting time.

In addition, less commuting saved employees between 271 and 900 shekels monthly on gas, tolls and other travel costs. The estimate doesn’t include the health benefits all Israelis enjoy from lower levels of emissions and air pollution.

Having more employees work from home also reduces the amount of office space required by employers, which on average works out to six square meters of dedicated space plus another four square meters of public space. With fewer staff on site at any given time, businesses need less space and can also save on cleaning and other services.

Compvision estimates the monthly savings on space at 360 to 432 shekels per employee per month and another 60 to 90 shekels of savings on services.

Working from home does entail some additional costs for employers. “We assumed that even if some large employers had been providing employees laptops and whatever they need to work at home, there are others that will have to equip staff with computers for the new workplace model,” said Nir. “In addition, [we assume] the company is providing about 150 shekels a month to cover internet and communications costs and support.”

Tel Aviv's normally bustling sea-side road is seen empty amid the coronavirus lockdown, March 29, 2020.Credit: AFP

It also assumes that companies that had provided food for staff at their facilities enable employees working at home to order take-out at the company’s expense.

Employees also enjoy savings by working at home. Compvision estimates that the time freed up from not having to commute daily is worth between 330 and 1,700 shekels a month depending on the worker’s pay. Childcare costs go down by between 300 and 600 shekels a month.

Attorney Rami Landa, a labor law expert at the Ramat Gan law firm Meitar, said employees must present a reasonable explanation for refusing an employer’s request to work at home; otherwise, the employer has grounds for dismissing him or her. But, an employee told to work at home must be provided with the tools to do so.

Landa said an employee working at home can qualify for overtime and the employer must continue to pay whatever social benefits were paid previously. However, an employer isn’t required to pay commuting costs, meals and the like.

The courts have never ruled that employers must cover employee costs for working at home. Landa recommended employers ask reasonably and cover major expenses. A workplace accident that occurs at home is deemed no different than one at an office or factory, assuming the employee was injured while working, he said.

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