The pandemic has been a very challenging time for businesses around the globe. Frequently changing regulations, social distance requirements, employee and customer safety concerns, and forced closures have significantly impacted many industries. While some businesses were prepared for workers to be remote and for shoppers to order online, others had to invest in the infrastructure much sooner than anticipated and adapt rapidly.
Now that we are over two years into this pandemic and regulations are finally beginning to ease many business owners are asking themselves “now what? Do we go back to how we operated or stay in this new normal”. While every business is unique, and we cannot tell you the best solution for your team, we wanted to take some time to discuss the bottom-line considerations of having a remote team.
There has been a long-standing myth within many corporate settings that allowing employees to work from home will decrease their productivity due to a lack of oversight from their managers. Research conducted during the pandemic has determined that the opposite is true, as remote work has been shown to increase employee productivity and reduce employee errors by up to 40%. Removing the distractions imposed by long commutes, employee coffee breaks, workplace drama, and office politics increases the hours spent focusing on work. Remote work also increases employee happiness (and productivity) by providing the flexibility they need to maintain a healthy work-life balance, reducing their exposure to illness, and increasing job satisfaction and engagement by providing them with more accountability and autonomy.
The cost of office space and retail locations is an overhead that is often remarkably high. While there is a range of technology solutions that need to be put in place when you move your business online, the overhead is usually lower than it would be if you maintain a physical office. Providing the option for remote work also helps business owners expand their hiring pool and increases employee retention.
According to a survey completed by HR software company Zenefits 7 out of 10 employees valued flexibility as much as they value pay and health benefits. By providing flexibility and increasing employee satisfaction businesses can significantly reduce the costs associated with finding, hiring and training new employees by retaining staff for longer periods of time and in situations where they are required to move for personal reasons.
Employer Tax implications
While there are many benefits to offering remote working arrangements, business owners should speak to their accountant or tax specialist when developing these arrangements to ensure they do not experience corporate tax or payroll implications. While the tax requirements for employees often remain straightforward. There may be certain circumstances where corporate income needs to be allocated or provincial corporate taxes filed across provinces where employees’ homes are considered “permanent establishments” of the business.
Overall, there are a lot of benefits to offering employees remote work opportunities. However, to ensure they make the most sense for your business and that the arrangements do not create significant taxation challenges or expenses we always recommend talking to a professional before moving forward with these arrangements.