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Understanding the 4 hidden costs of working from home

While remote work offers cost savings, there are hidden costs of working from home that affect both employees and businesses. Learn four hidden costs and how to address them.

Remote work has been with us for years, but the COVID-19 pandemic quickly took it to new levels. While many workers have welcomed the change, the fuller implications have become more fully understood over the course of 2021. There may well be benefits to remote work that both workers and employers want to extend into 2022 and beyond, but some elements bear closer consideration.

Cost is one of those considerations. While remote work has obvious economic benefits for both parties, there are also hidden costs of working from home. To sustain work from home as part of a hybrid approach to working in pandemic times, business leaders must consider the full, true cost of remote work. Let's examine four examples that go a long way in evaluating what the true cost might look like.

1. Home office setup

At the outset of the pandemic, most employees didn't work from home and didn't consider remote work as a permanent shift as the expectations were in the short term. But, as the pandemic wears on and workers adapt to this new working model, a permanent shift is exactly what's happening. Compounding this is the emergence of new virus variants, like omicron, where safety is becoming a core driver of work from home.

To make this new scenario work, home workers will likely need some outfitting or upgrading to their workspaces to approximate an office setting. Technology-wise, this could involve getting a more current computer or smartphone to support collaboration. This may also extend to peripherals, such as webcams, speakers and headsets.

Then, there's everything around apps and peripherals, such as a proper desk, a decent chair and even lighting to support video calls. Chances are good that every home-based worker will need help in at least one of these areas, making this a key checkbox in the hidden cost column.

2. Home office connectivity

Connectivity is a significant part of the work-from-home experience and needs to be considered separately from home office setups because these services have ongoing costs. Most of what's needed to set up a home office will be purchased outright, so these will be one-time costs. Of course, in scenarios where remote work becomes permanent, organizations also need to consider replacement costs, since many of today's electronic products aren't designed to last more than two or three years.

Connectivity needs vary by the type of work being done, but employers must anticipate cases where home connectivity services won't be adequate for work. This will likely require upgrading to a higher-tier broadband service. The same could apply for mobile data plans. Going a step further, some homes won't have access to broadband or the service is spotty. In these cases, an entirely new connectivity setup will be needed, adding further cost for supporting remote working.

3. Maintenance of the existing office

Over time, a key financial benefit of remote work for employers is the reduced need for office space. Those hard cost savings are undeniable, but the payoff could take years to realize for organizations locked into long-term leases. While some businesses are firmly committed to this plan, others are on the fence and not planning drastic office downsizing, as they're not sure if long-term remote work will be viable for their organization.

The net result is that many offices sit empty or are operating well below capacity. While workers are happy to continue doing their jobs from the comforts of home, businesses still bear the ongoing costs of keeping the offices running, including rent, power and heating.

Consider all the idle assets -- capitalized or not -- that workers would otherwise be using, such as desks, phones, computers, meeting rooms and copiers. The business is getting little utility now from those, not to mention continuing to pay their leasing, maintenance and technical support costs. These costs continue whether workers are in the office or not, but now, there is additional cost from the above factors to support work from home.

4. Soft costs

The above examples are hard costs, where the financial impact can be measured, but organizations need to consider the soft costs that contribute to the hidden costs of working from home. For some remote workers, productivity will improve, especially since they gain their commute time back and their personal lives become easier to manage. Others, however, will need help to maintain productivity, perhaps due to using outdated endpoints, but also because they have difficulty self-managing their work in constant isolation.

Not everyone is cut out for remote work, and businesses will need to invest in resources and activities to counter the isolation. Building culture and camaraderie is just as important as providing leading-edge collaboration tools. The workplace is more diverse now, and a one-size-fits-all approach to managing employees isn't going to work. This is a soft cost issue, where the goal is engagement and teamwork, but if not addressed, retention and productivity will suffer and lead to real hard cost implications.

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