Do Companies Save Money With Remote Employees? [2026]

Early in the COVID-19 pandemic, many businesses moved to remote work for safety reasons. Restrictions have long since eased, and the question that stuck around is a financial one: does keeping people out of the office actually save money?

Plenty of employees have settled into working from home or on a hybrid schedule and don’t want to give it up. Employers, meanwhile, want to know what the arrangement does to the bottom line. So, do companies save money with remote employees?

Quick answer: Yes. Companies save money with remote and hybrid employees mainly through lower rent and utilities, reduced travel and relocation costs, and smaller bills for cleaning, security, and food. Global Workplace Analytics estimates a typical employer saves about $11,000 per year for each person who works remotely half the time. Many companies also report higher productivity and better retention.

Remote work is an arrangement where employees do their jobs outside a central office, usually from home, either full time or as part of a hybrid schedule that splits the week between home and the workplace.

Here’s where the money goes, and where it stops going once people work from home at least part of the week.

Do companies save money with remote employees? Short answer: yes

Studies consistently point to cost savings when employees work remotely. Running an office five days a week, all year round, is expensive.

First, you rent a building. Then you buy office supplies, stock food and coffee, and pay someone to clean. If employees relocate to your premises, you cover that too.

Switching to hybrid or remote work removes the overhead behind many of these fixed costs. Global Workplace Analytics estimates that if everyone with a work-from-home-compatible job did so half the time, U.S. employers would save between $10,400 and $13,200 per employee per year across real estate, absenteeism, turnover, and productivity. Here are the main line items.

Rent and utilities

The more people you have on-site, the more square footage you pay for.

Prime office space isn’t cheap. Annual occupancy costs in Manhattan reached over $169 per square foot in the second quarter of 2021. When a meaningful share of your team works from home part of the time, you can move to a smaller footprint and pay less rent.

Real estate is usually the biggest win. IBM cut real estate costs by $50 million through remote work, and average real estate savings from full-time telework run around $10,000 per employee per year.

Rent isn’t the only cost. A fully on-site workforce needs a desk, chair, and computer for everyone. Those purchases add up fast.

Remote workers using remote spaces, or a hybrid model, mean you buy less furniture and fewer supplies while keeping enough for the people who come in a few days a week.

A smaller office also means lower electricity bills, and fewer people on-site means smaller internet and water bills.

Travel and relocation expenses

Video conferencing has replaced a lot of business travel. Employees meet clients, customers, and colleagues online instead of getting on a plane.

Relocation is another saving. Nortel estimates it saves $100,000 per employee it doesn’t have to relocate.

Cleaning and security services

Fewer people in the office means companies pay less for cleaning, and often less for security too.

Food and beverages

Remote work cuts spending on coffee, snacks, and refreshments for meetings, and the same goes for on-site cafeterias. You also save on food storage, dishes, and cutlery.

Companies also see more profitability with remote workers

Saving money is only half the story. Remote and hybrid work can also lift profit. Here’s how.

Increased productivity

Workers tend to be most engaged when they spend a good part of the week working remotely, roughly three to four days out of five.

Engagement pays off. Gallup’s research finds that the most engaged teams are 18% more productive and 23% more profitable than the least engaged, and they see measurably better output.

There’s real-world evidence too: Global Workplace Analytics reports that American Express’s remote workforce produced 43% more than its office-based staff.

Read more about remote work productivity.

Increased employee retention

Retention is often where flexible work pays for itself. 46% of companies that allow telework say it has reduced attrition, and 72% say it has a high impact on employee retention.

Keeping your best people isn’t only good for morale, it’s cheaper. Replacing an employee can cost anywhere from one-half to two times that person’s annual salary. See more hybrid work statistics for context.

Less absenteeism

Here’s a number that surprises people: 78% of workers who call in sick aren’t actually ill. They’re dealing with stress, family issues, or personal needs. Unscheduled absences cost employers about $1,800 per employee per year.

Telework programs cut unscheduled absences by 63%, largely because flexible hours let people run errands or handle appointments without burning a whole day.

Giving employees control over their own schedules also signals that you trust them to do the job wherever they are. That tends to produce a happier, healthier, more productive workforce.

Larger talent pool

Companies used to hire only from their local area, or pay to relocate someone from farther away.

Remote-first hiring removes that limit. You can recruit from a much wider geography and find a better match for the role, without asking anyone to move.

Remote work also opens roles to people with disabilities, widening the pool further.

So yes, flexible working carries real benefits for employers.

Costs and drawbacks of remote work

Remote work isn’t free of downsides. A few to plan for.

Data security issues

Remote work requires investment in technology such as video conferencing and project management tools.

Those tools carry security risk, as years of high-profile breaches show.

Companies also have to train employees on security so that people using company apps or equipment at home still take precautions, such as VPNs, when they’re outside in-office IT protections.

Collaboration concerns

In Buffer’s 2022 State of Remote Work report, a small majority of employees said they felt less connected to coworkers after shifting to remote work.

There’s also a risk of an “ingroup” and “outgroup” forming when some people work remotely and others are on-site.

You can support in-person collaboration with the right tools, such as OfficeRnD Workplace and its collaboration features. OfficeRnD Workplace is workplace management software that helps teams coordinate who comes in and when, so office days are worth the trip.

Read our case study on how Tavistock enabled in-person collaboration while adopting a hybrid model with OfficeRnD Workplace here. They cut real estate costs in the process.

Occupational safety and health administration issues

Employers may be liable for accidents in a worker’s home, under Section 1904.5(b)(7) of the Occupational Safety and Health Administration (OSHA) rules. A few examples from OSHA itself:

“If an employee drops a box of work documents and injures his or her foot, the case is considered work-related. If an employee’s fingernail is punctured by a needle from a sewing machine used to perform garment work at home, becomes infected and requires medical treatment, the injury is considered work-related.”

OSHA doesn’t consider incidents like these work-related:

“If an employee is injured because he or she trips on the family dog while rushing to answer a work phone call, the case is not considered work-related. If an employee working at home is electrocuted because of faulty home wiring, the injury is not considered work-related.”

Keep up with occupational and safety laws in your country to make sure everything is above board.

Remote work also has tax implications worth checking, especially for employees working across state or national lines.

Save even more money with OfficeRnD Workplace

Do companies save money with remote employees? Yes. The savings show up in rent, utilities, travel, and overhead, and many companies also report higher profitability and stronger retention.

Remote work isn’t for everyone, though. Some people want to be back in the office, others want a couple of remote days a week. A hybrid arrangement usually gives you the best of both.

Whatever you choose, OfficeRnD Workplace helps you run it. It’s workplace management software for hybrid teams.

Employees set their schedules in advance with the smart scheduler, and when they come in, they can book a desk. Integrate your preferred collaboration tools and you’re set.

Get started for free with OfficeRnD Workplace or book a live demo with one of our workplace experts.

FAQ

How much do companies save with remote employees?

Global Workplace Analytics estimates that a typical employer saves between $10,400 and $13,200 per year for each employee who works remotely half the time, mostly from real estate, reduced absenteeism, lower turnover, and higher productivity. Full-time remote work saves even more per employee. Actual savings depend on how much office space you cut and how many people go hybrid.

How do companies benefit when employees work remotely?

Beyond direct cost savings, companies benefit from higher productivity, lower turnover, less absenteeism, and access to a wider talent pool. Engaged, flexible teams tend to be more productive and more likely to stay.

What are the disadvantages of employees working remotely?

The main drawbacks are data security risk, weaker in-person collaboration and connection, and employer liability questions under OSHA rules. Each is manageable with the right policies and tools.

Do employees want to keep working remotely?

Yes. In Buffer’s 2022 State of Remote Work report, employees overwhelmingly recommended remote work and said they’d like to keep working remotely at least some of the time. Flexibility in how they spend their time was the most-cited benefit.

What’s the biggest benefit of working remotely?

Flexibility. In the same Buffer report, 67% of employees cited flexibility in how they spend their time as the top benefit, and 62% cited flexibility in choosing where they work.