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The Costs of Employing Remote Workers: What Employers Should Consider and How to Save Money

The trend of remote work has been on the rise over the last decade, but it was significantly propelled by the Covid-19 pandemic in 2020. Many organizations around the world were compelled to close their offices, leaving workers with no option but to work remotely. In fact, today, remote work has become the new norm for many companies, and it’s expected to persist even after the pandemic is over. But just like any other change, remote work comes with its own set of challenges, including the cost implications to businesses. In this long-form blog, we’ll delve into the financial costs of employing remote workers and suggest ways that employers can save money while still enjoying the benefits of remote work.

The Costs of Remote Work

Technology and Infrastructure Costs

Since remote workers work away from the office, companies are responsible for providing the necessary technology infrastructure. According to a report by Global Workplace Analytics, companies spend an average of $1,000 per year per remote worker on these tools. Moreover, companies need to ensure that remote workers have a reliable internet connection, computers or laptops, and other necessary software and hardware. These costs may be higher for companies whose business requires advanced hardware like graphic designers, architects and engineers. Moreover, in instances where a remote worker experiences hardware failure such as a broken laptop, it is up to the employers to source for a replacement since it is still their responsibility to ensure that remote workers have the necessary tools to carry out their work.

Maintaining a Connected Workplace

Remote workers need to feel connected to their colleagues to feel like they’re part of a team. This often necessitates regular virtual team meetings, team-building activities, and collaboration tools. But maintaining a connected workplace comes with its own costs, including the cost of scheduling virtual events or team meetings, team-building activities, and using premium collaboration tools. One of the essential tools in this regard is video conferencing software, which allows teams to maintain constant communication and continue with productive meetings whenever required. Additionally, team-building activities such as virtual happy hours, game nights and book clubs are essential in maintaining team morale, and can cost extra money.

Communication and Productivity Tools

Remote workers require the right tools to be productive and to remain connected to their colleagues. Communication tools such as instant messaging, email, and task management software are crucial, with companies spending an average of $150 per year per remote worker on these tools. Instant messaging tools such as Slack, Skype or Microsoft teams enable real-time team communication and help reduce the volume of emails. Task management tools such as Trello or Asana provide a platform for teams to collaborate on projects, enabling better productivity and accountability.

Training and Development

Remote workers require the same training and development opportunities as in-office employees. This includes training on new software, equipment or safety protocols, as well as professional development opportunities. The cost of these programs varies depending on the training provider and the length of the program. Employers may also be required to invest in software licenses to enable effective training and development for remote workers.


Remote workers need to secure their internet connection and any files they’re working on. They also require a good understanding of how to handle sensitive company information. Employers need to provide the necessary tools to enable remote workers to safely access company files while protecting sensitive data. Sensitive information such as financial records, employee records, and product development information must be protected from unauthorized access. Employers may need to invest in secure virtual private networks (VPNs) and software with encryption capabilities to protect company information.

The Tools and Technology That Can Help Employers Save Money

Collaboration Tools

Using collaboration tools can reduce or even eliminate the need for travel, which can save your company money. For example, instead of having remote workers come into the office for a team-building day, you can organize virtual team-building activities. This saves time, and the cost of travel and other associated expenses. Virtual meeting tools such as Zoom, GoToMeeting and Google Meet offers better scheduling options and conference room setup, saving time and resources.

Communication Tools

Using communication tools can reduce the cost of phone bills and the need for postal services. Instant messaging platforms and email services allow remote workers to communicate with other employees or customers without the need for costly phone bills or in-person meetings. Additionally, cloud phone systems such as RingCentral and VirtualPBX can save employers money on phone costs, while still providing advanced phone features.

Productivity and Time Tracking Tools

Using productivity and time-tracking tools can help employers to measure employee productivity and better manage their time. There are many affordable tools available such as Trello, Asana, or Jira, which helps teams manage workflows, deadlines and task assignments. Time-tracking software such as Toggl and Harvest can help employers manage team productivity without micromanaging remote employees.

Cloud Computing

Employers can benefit from using cloud-based software solutions for managing company data. Cloud solutions are often easier to maintain than traditional in-house servers, and they don’t require a large upfront investment. Cloud solutions can also reduce the risk of data loss or theft since data is automatically backed up and protected by cloud providers. Cloud servers like Amazon Web Services and Microsoft Azure enables businesses to access data from anywhere, thus providing flexibility and convenience.


Virtualization can save employers money by allowing multiple virtual machines to exist on a single physical machine. This reduces the number of physical machines a company needs, lowering IT maintenance, electricity, and cooling costs. Employers can use virtualization tools like VMWare and Xen to create virtual machines efficiently.


Employers can take advantage of the benefits of remote workers by outsourcing to countries with lower labor costs. Many countries have a lower cost of living, which often translates to lower labor costs, making outsourcing to these countries a viable option. Freelancing websites such as Upwork and Fiverr provide an excellent platform for employers to outsource tasks and projects to remote workers and freelancers.

How Employers Can Save Money While Employing Remote Workers

Offer Flexibility

Employers can save money by offering flexible work schedules or a hybrid work model for their remote workers. Employees can then work from home on days when they’re not required to be in the office. Companies can rent smaller offices and reduce utility bills, which can lead to significant cost savings. Employers can also offer the option for employees to work remotely permanently, reducing office expenses such as rent and utility bills.

Hire Freelancers

Freelancers are ideal for short-term projects, and they can help companies save money compared to hiring full-time remote employees. Companies don’t have to cover freelancers’ health benefits, taxes, office expenses, or other perks that full-time employees are entitled to. Freelancing websites such as Upwork, Fiverr and Freelancer provide a platform for employers to find freelance talent from around the world.

Negotiate with Service Providers

Employers should always negotiate prices with technology and software service providers to get lower prices on essential tools, apps, and subscriptions. Additionally, they can benefit from volume discounts and long-term pricing contracts. Employers should also ensure that they review their subscriptions regularly to eliminate redundant services or features.

Go Green

Employers can save money by promoting eco-friendly practices among their remote workers. Companies can offer bonuses to remote workers that reduce their energy use or those that opt for a more sustainable mode of transportation. Employers can also encourage remote workers to opt for virtual events and meetings as opposed to in-person events, reducing the carbon footprint.

Reduce Costs Through Shared Workspaces

Several companies offer shared workspace services, where remote workers can work in a shared environment. This reduces the need for remote workers to rent their own workspace, which can be costly. Shared workspace services such as WeWork provide office space, meeting rooms, and other amenities for remote workers on a pay-as-you-use basis.


Remote work has become the new normal for many companies worldwide, and it is expected to continue even after the pandemic. While remote work can provide significant benefits to businesses such as increased productivity, reduced overhead costs, and access to a larger pool of talent, it also comes with its own set of challenges, including the cost implications to businesses. However, with careful planning and resourcefulness, employers can manage the costs of remote work effectively.

To reduce the costs of remote work, employers can use collaboration tools, communication tools, productivity and time tracking tools, cloud computing solutions, virtualization, and outsourcing. Additionally, employers can save money by offering flexible work schedules, hiring freelancers, negotiating with service providers, going green, and reducing costs through shared workspaces.

Employers should be creative and explore innovative ways to optimize the cost-benefit of remote work while retaining its benefits. By doing so, they will retain a productive and engaged remote workforce while reducing unnecessary costs, allowing them to invest more in critical areas such as employee welfare, professional development, and research and development.

In conclusion, remote work is here to stay, and employers must embrace it as part of the new reality. Businesses that successfully navigate the costs associated with remote work can gain a competitive advantage in the market and emerge even stronger post-pandemic.

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