How leaders can ‘recession-proof’ their business with remote work
As we anticipate the next recession, insurance leaders will have to reimagine the workplace as an opportunity to evolve.
As most places in the U.S. continue the practice of sheltering in place, many companies are starting to realize that remote work isn’t just becoming the new normal in the age of coronavirus — it may also be what they will need to implement to get through a potential recession.
Companies that have historically shied away from adopting more agile work styles will struggle to attract and retain top talent, which could impact their bottom line.
So as we anticipate the next recession, leaders will have to reimagine the workplace as an opportunity to evolve. It will prove to be, most simply put, a matter of organizational Darwinism.
Antiquated dress codes, workspaces, work hours, policies and processes are all up for revision – so how will companies respond?
As COVID-19 wreaks havoc on a global scale, markets have plummeted, depleting $9 trillion and counting. Events, festivals and conferences have been canceled, professional sports have been postponed indefinitely, flights have been grounded.
Leaders are faced with answering a seemingly impossible question: What, if anything, can be done to shore up business now as we collectively stare down a prospective recession?
Whether the recession rears its head now or 10 years from now, one thing is certain: It is inevitable. It’s only a matter of time if the patterns and repetitions of history are to be believed.
How a remote workforce can help
A recent study examined the market effects of coronavirus, with some remarkable findings. While most companies’ values have plummeted, they discovered that several companies have thrived.
But how? According to the study authors, “We spotted file management software Atlassian (TEAM), video conferencing provider Zoom Video Communications (ZM), remote healthcare access Teladoc Health (TDOC), exercise equipment and class provider Peloton (PTON), contact center 8×8 (EGHT) and similar names were up … we realized that this is the “Work from Home” portfolio.”
In layman’s terms, those companies who adopt or support a work-from-home model have positioned themselves for two distinct opportunities. The first opportunity is recognizing this downturn as an ideal time to invest in, create or support a remote-work workforce.
Take Growrk as an example. As a company that manages distributed teams’ remote office needs, Growrk officially launched just six months ago and has enjoyed a tenfold surge in client demand in recent months. Their business model seized an opportunity to serve the burgeoning remote workforce – and has seen a windfall of success as a result.
The second opportunity recognizes that a recession provides fertile ground for market disruption. Consider the case for companies like Uber and Airbnb–gig-economy newcomers post-2008–which found that self-employment could provide a more reliable income than the unstable mega-institutions of the time. Airbnb was launched in 2008 and Uber in 2009, and both pioneered the rise of the gig economy initiated by the collapse of traditional workforces.
We could even consider the case for our organization. Started in 2010, BELAY took advantage of both opportunities afforded by an economic downturn by not only creating a remote workforce, but also by disrupting the traditional workforce models in providing other businesses access to immediately deployable remote workers.
After all, necessity is the mother of invention and innovation.
Making the case for long-term remote workforces
In a global market downturn, the only way to stave off irreparable financial catastrophe is for every organization to recognize that this is no time for rigid, reactionary leadership.
It is time for proactive, adaptive leadership. It’s time for leadership to buck the status quo – to reject ‘how things have always been done’ – and to accept that survival will only be guaranteed to those who prepare and pivot.
But how, exactly, does remote work answer that call?
One word: Cost.
Let’s break down the numbers. According to Global Workplace Analytics, the average savings on real estate with a full-time workforce is $10,000 per employee per year, per employee.
Insurance giant Aetna, for example, eliminated 2.7 million square feet of office space and saved $78 million per year. That alone should make the case for recession-proofing an organization with a remote workforce.
But incredibly, the financial benefits don’t stop there. Because if saving tens of millions per year isn’t enough, organizations can save even more with a remote workforce by reducing:
Absenteeism: Unscheduled absences have been estimated to cost American employers $1,800 per year conservatively and up to $3,600. But with remote work, research found a 63% decrease in unscheduled absences per employee.
Costs: More than 33% of U.S. workers surveyed said they would prioritize remote work over having a more prestigious, higher-paying role. Another survey found that 78% of respondents said that flexible schedules and remote work would be the most effective non-monetary way to retain employees – up from 67 percent the year prior.
Turnover: According to a recent remote work report, 42 percent of 100-percent remote respondents said they have been working remotely for more than five years, 28 percent have been working remotely for three to 5 years, and 19 percent said they have been working remotely for one to two years.
Remote work makes dollars and sense
The bottom line: Hiring and maintaining full-time, on-site workers is expensive, but companies that can successfully migrate – in full or in part – to remote work will position themselves to adapt, survive and ultimately thrive when global markets inevitably turn.
Still not convinced?
Then allow me to leave you with this: Based on conservative assumptions, a typical employer can save an average of $11,000 annually per part-time remote employee – yes, you read that correctly – thanks in large part to increased productivity, lower real estate costs, reduced absenteeism and turnover, and better overall disaster preparedness.
It’s been said that the best time to plant a tree was 20 years ago. The second best time is now. My recommendation? Sow that seed today, and be prepared to reap the windfall of benefits tomorrow.
Tricia Sciortino is CEO of BELAY.
See also: