Ask Us How: How to create financial benefits with a mobile workforce
Published on October 16, 2013 under NSW Business Chamber Partnership
Why is it important?
While the concept of a mobile or remote workforce is not new, it has become increasingly popular over the last few years, fuelled by advances in technology, such as smart devices and cloud-based software, and the pressure to create flexible work environments to attract talented employees.
Having a workforce that includes virtual employees who no longer work from a central office location but can work from anywhere, can potentially save a business hundreds of thousands of dollars, that’s even taking into consideration the IT infrastructure required to support them.
On average it costs between $20,000 and $30,000 per year (excluding salary) to accommodate an office employee in a major metropolitan city. This represents the cost per employee for office space, investment in office furniture and equipment as well as utility expenses, like electricity and maintenance costs (i.e. cleaning and waste management). So you can see there are definite cost advantages of having a portion on your team working remotely.
What to do
As more businesses embrace mobile technology and its capabilities, new office environments are emerging. For instance it is becoming increasingly common for workplaces to have more employees than desks.
Streamline your workplace for increased productivity and efficiency
Instead of each staff member having an assigned desk, mobile employees visiting the office plug into shared workstations or meet and collaborate in appointed group spaces. This type of streamlined office presents significant reductions to your cost structure which will in turn deliver greater profit margins and an improved working capital position, ultimately allowing you to further grow your business.
Use smart technology to help employees work on the go and maximise downtime
Improving productivity levels should be an important focus for every business as market conditions remain challenging. The more efficient and productive you can make your workforce, without compromising on quality the better your profit margins will be and the more resilient your business will be to market pressures.
One notable difference in having a mobile workforce is the efficiencies it can create for employees who are always on the go. Downtime for these employees has traditionally represented a significant cost to business. For example, a salesperson for Business X spends two hours each day either in between meetings or travelling. If the value of that employee working for those two hours is $150 per hour, those two hours costs the business $300 a day, $1,500 a week or $72,000 a year.
By giving this employee the smart technology to enable them to work on the go the business will make money rather than bear a cost. In the above example, even if the employee’s downtime is cut by half, then the business is making an extra $36,000 per year per employee.
Reduce employee fatigue and improve productivity and quality
Another factor that can have a positive impact on productivity is reduced employee fatigue. As employees working from home no longer have to spend time travelling to work each day, they benefit from an improved work/life balance. This can then lead to a more focused and productive employee who is able to complete more work related tasks with a higher level of quality.
To overcome the challenge of not being able to physically oversee your employees, it may be necessary to establish a system that pays for objectives achieved rather than hours worked. This can give comfort to both parties about what’s expected from the relationship and also what needs to be achieved.
Utilise real time collaboration tools
Working away from the traditional office environment may not suit every employee. Some employees may stop working when they are out of sight of their manager, some need the structure and boundaries of the workday and some also desire the social collaboration with other colleagues. Business owners need to know how to manage these obstacles. However there are plenty of online solutions to overcome this, such as, real-time collaboration tools as well as video and voice tools.
Benefit from taxation implications
A number of positive tax implications also come with having virtual employees, particularly when you salary package items such mobile electronic devices, allowances for home office expenses and car or travel allowances.
Mobile devices like smart phones, laptops and tablet computers can effectively reduce your business’ tax cost. Not only is your business exempt from fringe benefits tax (FBT), these mobile devices can also be immediately written off as a tax deduction, rather than claimed as a capital depreciation allowance and spread out over three to five years.
Other items that may be FBT exempt include computer software, protective clothing, a briefcase or a tool of the trade (e.g. a photographer’s camera or a tradesman’s tools). Office car parking can also be FBT exempt so long as the business’ turnover is less than $10 million a year and the parking is on the business’ premise.
For mobile workforces with on-the-road salespeople, FBT will apply when employees have access to company cars for their private use. The FBT is calculated using one of two methods. The statutory formula method is based on the car’s cost price and the operating cost method is based on the costs of operating the car (requires a log book to be kept).
Benefit from cost-effective and flexible virtual technology
Take advantage of cost effective, cloud-based applications such as Google Docs, Dropbox, virtual desktops and more, which don’t require a fixed location but can be accessed from anywhere. These types of technologies allow all businesses, even start-ups to be flexible, have a low cost structure and a competitive edge over established businesses.
On a final note
It is already common place for many workers, to some degree, to have some form of remote access, like work emails or smart phones or through secure online portals; and we are moving towards a future where employees will expect their workplaces to be equipped with the technology that will enable them to work from anywhere at any time. It will be those tech-savvy businesses that are able to successfully integrate technology into their operations and create mobilised working environments, not confined by geographical locations, that are also process efficient, productive and cost effective, that will be tomorrow’s market leaders.