Remote work reduces commuting costs, but energy and internet costs increased for those working from home.
According to new research, working from home may save Australian workers $10,000 a year on average. According to a worldwide study of 28,000 full-time employees conducted by technology firm Cisco, four in five people (80%) saved money while working from home.
The typical savings boost was 15.5%, and remote workers spent $216 per week less on fuel, commuting, food, and entertainment due to working from home.
Workers struggling with slow wage growth and rising living costs are not blind to the financial advantages of working from home (WFH). Almost three-quarters of employees said they would consider changing jobs if they could save money on transportation costs.
“If it’s going to cost you $10,000 to join an organization that expects you to be in the office five days a week, that’s a real factor [in deciding where to work],” said Cisco Australia and New Zealand vice-president Ben Dawson.
“If people feel happier, healthier, and financially better off, they’re going to expect that, and it is going to be a source of competitive differentiation when we go to recruit people,” Dawson added. “I think flexibility has gone from being a unique aspect of some employers to being table stakes.”
In addition to most employees reporting greater work-life balance and feeling healthier, they also reported feeling better. WFH was not just making people wealthier, with two-thirds of respondents reporting enhanced physical fitness due to the extra time they had to exercise.
Managers’' demands for employees to return to the workplace have sparked a growing protest. Last month, a government campaign urging Aussies to return to the workplace was criticized as "tone-deaf."
The Cisco report warned workers that forcing employees back to the office would prevent employers from attracting top talent. According to the report, businesses that are serious about competing for the best talent must return to old ways of working because hybrid working has advantages.
“Leaders must acknowledge that a point of no return has been reached, and there must be deeper and more concerted investments in culture, communications, technology, workplace policies, and infrastructure to thrive in the new hybrid working future,” the report said.
Workers are unsure whether their bosses enjoy the transition to a home office as much as they do. Despite two-thirds of respondents claiming that WFH has improved their productivity and quality of work, more than half were concerned about being micromanaged as a result of remote work.
According to a recent survey, 73.5 percent of employees think businesses need to reconsider culture and mentality for hybrid work to be truly open. Workers were concerned about what completely remote work might imply for their future advancement. According to a recent survey, half of the respondents — 57% — said that switching between remote and in-office work made it more challenging to collaborate with coworkers and the firm.
Household expenses factor into WFH savings
Many employees are pushing back against heading into the office by arguing that working from home saves them money. A recent Deloitte study found that nearly 40% of millennials and a third of Gen Zers believe remote employment has helped them save money.
Working from home has its advantages, however, it is not free, especially when considering rising energy costs. According to the Bureau of Labor Statistics ' Consumer Price Index, electricity costs were up 11% in April.
According to data provided by bill pay service Doxo, Americans spent an average of $23 more on monthly electricity and gas bills during the first four months of 2022 than during the same period in 2019. So far in 2019, Americans have spent around $156 a month on electricity and $150 a month on natural gas. Propane and heating oil users paid significantly more for their home energy in 2022, with bills averaging $302 per month.
Not only did overnight fees rise, but people who use the service had to pay more for their power during most of the country's hottest months of the year. During the summer of 2020, residential electricity use was 7.9% higher than in the summer months of 2019, according to the U.S. Energy Information Administration (EIA).
The cost of the internet may also be considered when calculating WFH expenses. According to Doxo's data, Americans have spent about $120 a month on their Internet and cable bills so far this year, about in line with what pre-pandemic U.S. households paid. The cost of your internet connection may vary, depending on whether you upgraded it during the epidemic—making that monthly expense permanently higher.
Americans are spending more money on electricity, but there is no doubt that high gasoline prices are leaving a bigger dent in people's wallets. Based on average gas costs from AAA, typical commute mileage, and typical vehicle fuel efficiency, Fortune estimated that the average price for petrol for a five-day work trip was about $140 in May. That is compared to the $90 a month commuters spent on petrol for their commute in May 2019.
That figure does not include the expenses of car ownership, including maintenance and insurance, which may rise if a vehicle is driven more frequently. University of California, Santa Barbara estimates that such expenditures may total around $500 per month based on AAA advice. Tolls and parking charges may raise commuting expenses, but the costs vary greatly.
In the end, public transportation is more cost-effective than driving alone, but prices vary considerably. A monthly unlimited Metrocard in New York City costs $127 per month, and a monthly unlimited pass for public transportation in Baltimore will cost $77 beginning June 26, 2022.
Americans are paying additional in general, and neither option will likely help them save significantly when they look at the expense of commuting versus the cost of working from home.
This is especially true when you consider that many WFH stipends have expired, which helped cover some energy, Wi-Fi, and home-office setup costs. Around 10% of employers polled by WTW in June and July 2020 provided workers with some financial assistance to help them manage their remote work expenses.
According to the Employer Council, only 3% of employers were offering a lump sum stipend or reimbursement on home-office equipment in February 2021, and the average monthly stipend was $66.
Commutes and WFH expenditures vary considerably, depending on where Americans reside and the methods they use to save money at home or while traveling to work. In the long run, it is usually not as simple as switching between working from home and traveling to the office for individuals searching to save money. Americans can stay on top of rising costs—and in some cases even reduce them—by making modest adjustments to WFH setups and critically examining daily commute options.