Once we stop thinking of location as a qualifier for employment, it makes it a lot easier to hire quality talent from a significantly larger pool. It even saves money. But it all starts with a shift to remote work.
A modern, distributed workforce experiences several cost-saving benefits, like a reduction in office expenses (linkback to Argument for Remote post), but it also expands the volume of available candidates.
Consider the following: nearly 70% of employers report shortages in talent, despite the fact that there are more skilled workers than vacant positions.
There’s a variety of reasons employees leave. Some of it is a large population of Boomers retiring out of the workforce. Some of it is due to pay. An employee in San Francisco faces cost-of-living expenses that are twice that of someone in Detroit, and as such demands a larger salary. But one of the top reasons is work-life balance. Simply put, burn out sends quality employees packing.
When 60-80% of American employees shifted to work from home, a majority reported an improvement in work-life balance. Of those surveyed, 60% say their work-life balance has improved without a commute. This is why remote workers typically register higher job satisfaction scores.
There are benefits beyond public safety and retention. Work from home presents opportunities for cost savings and talent acquisition.
Let’s revisit those two employees from San Francisco and Detroit. To facilitate the cost-of-living in San Francisco, an employer would need to pay their high-skilled talent upwards of $100,000 a year. Yet this same employee living in Detroit would be able to maintain the exact same lifestyle for less than $50,000 annually. Companies in the Bay Area are unlikely to even see a resume from a prospect planning to stay out in Michigan.
By binding employment to a geographical location, employers place themselves at an economic disadvantage. While the above example might be on the extreme end of cost of living, using averages from across the country, we can see a possible savings of 5-10% reduction in payroll costs when employees work from home.
Embracing a modern workforce, one that’s not tied to a physical office, also expands the pool of available talent. Work from home can help re-introduce employees who may have left due to location or office culture. Remote policies provide access to workers with disabilities. It can also help broaden your organization’s geographic, socioeconomic, and cultural diversity.
And all of this is possible on a global scale.
A study conducted in April of 2020 identified international regions best suited for work from home. They included the US, Canada, parts of Europe, and high-income areas within ASIAPAC.
The commonalities that make remote work viable in these regions include the level of economic development, high personal and corporate income level, the availability of infrastructure, and a cultural openness to remote work.
Collectively, these areas represent a cohort of roughly one-billion people, with a working population of about 400 million. Around 80% of these workers are concentrated in 8 regions: The United States, United Kingdom, Australia, Germany, France, Spain, Italy, and higher-earning parts of ASIAPAC.
Making a physical location an occupational requirement limits the talent pool and increases costs.
Chief Strategy Officer, DZS
Tuncay Cil serves as Chief Strategy Officer at DZS where he is responsible for driving strategic and growth initiatives across the organization. Before DZS Mr. Cil was a member of the senior leadership team at ASSIA for a decade, serving as SVP Product Management, EVP Enterprise Products, and most recently as Chief Strategy Officer.
Prior to ASSIA, Mr. Cil served as VP Product Management at AirTies and led their expansion into the European service provider market. He has also held multiple senior management roles in engineering, product development, technical marketing, and general management at a variety of both large publicly traded companies and venture backed start-ups throughout the Silicon Valley.
Mr. Cil holds BS degree in Physics from Bilkent University (Turkey) and an MBA from Yale University, where he was awarded John M. Olin Fellowship in Telecommunications Research.
More from our Thoughts on Work Series
- What’s driving employers to remote work?
- Can work from home expand your talent pool?
- How much value can be created with remote work?
- Is the work from home economy here to stay?
- What’s the biggest obstacle to work from home?