Transitioning To A Remote Workforce: How to Measure Financial Impact

Learn how you can measure the financial impact of transitioning to a remote workforce.

Hiring remote workers is becoming more and more of a focus for companies that are looking to scale their teams. Before the coronavirus pandemic, remote work hiring had grown 50% over the past 5 years (since 2015). Now that the coronavirus pandemic has forced more companies to work remotely, it has led some organizations to consider transitioning to a remote workforce indefinitely.

The good news about a remote workforce is you can save a lot of money on office overhead. It can also save workers time commuting (in some cities 2 hours per day) that they can allocate to more efficient work habits. The bad news is that it could hurt productivity and make it harder to build a company culture without having an office. It also leaves the door open to many unanswered questions around financial implications when it comes to hiring, onboarding, employee performance and more.

If you are thinking about transitioning to a remote workforce, it is critical that you measure the financial impact it can have on your organization. Below are some questions that will help you measure the effectiveness as you transition to a remote workforce.

1. How is a remote workforce going to impact employee ROI?

Why is it important?

First, it is critical that you are able to measure the impact of remote work on your employee ROI. With the employee ROI metric, we are referring to the return on investment that you should expect for each employee with everything from hiring to performance. You might find that remote work is making it easier to hire employees, but it’s making it much harder to onboard new ones. Measuring ROI against your in-office work culture is critical to determining financial success as this metric takes into account the complete employee lifecycle.

Analysis Recommendation

In order to measure employee ROI, you need to be able to factor in all your metrics from hiring to performance. We recommend doing this by department and experience level so you can compare the differences across the board.  As an example, you might find that your senior-level engineers are producing better ROI as remote workforce, but your junior engineers are not.

2. How is a remote workforce going to impact productivity?

Why is it important?

The more productive your workforce is, the better results your organization is going to have in terms of financial results. When we refer to productivity, we are talking about the amount of time it takes for people to complete certain tasks. Each department will have different areas of productivity to measure, and it’s critical to see if these metrics change due to remote work.

Analysis Recommendation

I would recommend that you look at every department’s most critical metrics as it relates to productivity and do a comparison analysis between the two. This can include things like time it takes to complete tasks, meetings and speed at which your employees are completing specific projects and tasks. As example, if you have a sales team, are your sales reps conducting as much outreach and following up as aggressively working remotely vs. when they were in-office? If not, you need to take this change into account.

3. How is a remote workforce going to impact hiring quality talent?

Why is it important?

Your ability to hire talent with a remote work structure is critical to your success if you are looking to grow your company. With remote work, you are probably going to see a shift in talent availability and changes to your interview process. Your applicant pool will probably be larger since you will be looking for workers who live anywhere and your interview process will change since you may not require in-person interviews. The downside is that a change in interview process could impact your ability to hire quality talent even though you might get more quality candidates in your funnel..

Analysis Recommendation

One metric I would take a close look at is your fill rate. By fill rate, we are referring to how quickly you are filling roles at your company from the time a job post is up to accepting an offer. As example, if you are hiring customer service reps, are you able to hire quality applicants at a faster rate because you have a remote work setup? Is a faster fill rate saving the company money since you are now able to cater to more of your customers in a more detailed way? These are the types of questions that can help you determine the effectiveness of your remote workforce as it pertains to hiring.

4. How is a remote workforce going to impact onboarding new employees?

Why is it important?

Onboarding is critical to financial success especially for teams that are looking to build out a junior-to-mid level remote workforce. One of the most important parts of scaling your business depends on how well you train your new employees. Is online training going to work just as well as in-person? This is a critical question since onboarding can be the difference between a successful hire and one that is not.

Analysis Recommendation

I would recommend that you look at performance within the first three months of hiring vs. employees you hired in-office. If there is a noticeable change in results, then it could be your onboarding process that isn’t working as effectively if it is all done online. As an example, if you are hiring sales reps out of college, you need to compare the time it takes for remote reps to get their first deal vs. ones that were trained in-office.

5. How is a remote workforce going to impact employee retention?

Why is it important?

Understanding how turnover is impacted by a remote work culture is something that you have to measure. When employees are in-office, you might benefit from a high retention rate because of team culture. It is possible that employees might feel less connected to your organization and more likely to switch to other job opportunities with a remote work culture. On the other hand, you might benefit from remote work because employees might feel less burnout and stress by not having to commute to an office.

Analysis Recommendation

I would recommend that you look at how the cost of turnover is imparting your bottom line. This could be much higher or lower depending on your company. As an example, if you hire a bunch of marketing coordinators this summer vs. last summer, you should compare turnover rates at the 6 and 12 month period to see if it’s worse, better or the same. Then, you should find a way to factor in the costs associated with turnover so you can see how much it is costing your organization.

In the end, it all comes down to numbers.

In conclusion, analytics will help you determine how effective a transition to a remote workforce will be for your company. If you are on the fence about transitioning to a completely remote team, then it could be wise to A/B test the above to see if it is better, worse or stays the same in terms of financial impact for your company. Either way, you should make analytics a central part of your decision making process around remote work, and find ways to connect it to financial performance.