Calculating the Exceptional ROI of Working From Home

Guest blog by Stephen Leaden, Founder and President of Leaden Associates, Inc. 

At this point, most of us have been working from home for several months due to COVID-19. Yet, working from home has been an unexpected change for many of us. We’ve had to look at ways to manage noise levels at home, including pets and children, finding the work area that’s best for each of us without too many interruptions, and leveraging technology that’s available for the best customer experience in the contact center. The technology itself could include internet bandwidth, having a PC or laptop available, VPN security requirements, headphones — wired and wireless — and more. Most would agree that working from home has become the new norm.

I recently identified a major investment company that decided to renegotiate its commercial space in New York City, down by 75% going forward. This will equate to having approximately 50% to 60% of staff working from the office, including hoteling for some staff a couple of days a week at the office using floating cubicles and offices.

And there are other examples of the effects COVID-19 and the lockdown have had on businesses. Two large universities have moved their entire IT help desk contact centers to virtual, working from home full time. According to those CIOs, productivity has increased so much at each respective help desk, they see no reason to bring staff back to the office — forever.

Forever is a pretty big word, but that’s how much COVID-19 has changed our thinking in less than four months. I know of many organizations that were totally against anyone working from home and any work-from-home initiatives — but today, the thinking is quite different. They’ve seen the results of work from home and, in almost every case, productivity has gone up. They’ve also learned to use collaboration tools in such a way that they can now meet virtually — and get the job done remotely.

Video has also taken center stage. For more than 25 years, video has struggled to gain a footprint as the main channel for conversation, meetings and contact center initiatives. This will no longer be the case. Video as a channel now takes center stage with voice, chat and email — all from the home.

Running the Numbers: The At-Home Worker

Many articles and blogs have been published about how at-home workers are more productive than in-office workers. I’ve also discussed this idea with clients on multiple occasions; working from home can save their organizations significant amounts on real estate costs. These two talking points alone can create significant ROI for any enterprise.

Two other key areas of interest for the contact center include staff turnover and first-call resolution (FCR). History has shown that staff turnover is consistently lower for at-home workers — and that FCR improves the customer experience and eliminates the need for customers to call back.

Here are some hard numbers on the ROI for at-home workers.

  • Real estate costs: We’ve calculated that eliminating a 150-square-foot cubicle can save any organization around $5,500 annually. If you can move 100 contact center representatives to a work-at-home environment, that’s $550,000 in annual savings. Offices can save anywhere from $6,500 to $7,000 annually.
  • Productivity gains: Productivity increases 5% to 7% for at-home workers. So, for a 100-person contact center that reallocates five to seven employees to at-home work, with an average salary nationally of approximately $50,000 with benefits, that equates to $250,000 to $350,000 annually. That’s $3,000 savings per person, annually. Staff can be reallocated for other necessary requirements for customer experience-related follow ups, and more.
  • Turnover: Turnover also decreases for work-at-home employees. Generally, this is because companies can hire more mature individuals who have been restricted to being home, rather than having to travel one to two hours to work. Lower turnover rates mean training and ramp-up times are lower. There are also fewer supervisory demands. The costs to replace a call center agent can range greatly, but it typically costs between $5,000 to $7,500 (average $6,250) to hire and onboard new employees.

Turnover rates average over a 24-month period are 75%, which equal $6,500 for each individual. At-home worker turnover rates are only 20%. This means that, for a 100-person contact center, turnover costs would be $240,500 — compared to $65,000 for at-home workers. That’s a difference of $175,500, or an average of $1,755 per person.

  • First-call resolution: Historically, FCR has reduced call volume by as much as 18% for at-home workers. For every 1% improvement in FCR, a call center reduces its operating costs by 1%, equating to an 18% reduction in time needed to manage staff levels. For a 100-person contact center, staffing levels can be managed and reallocated by 18 individuals — with an average national salary of approximately $50,000 with benefits. That’s $900,000 annually or $9,000 per-person annually. These savings for staffing can be reallocated to focus on service-level agreements, KPIs and an overall better customer experience.

Overall, when you combine these numbers, contact centers can see a total annual savings, per person of $19,225.

Customers also benefit from FCR and retention rate improvements.

  • Customers might spend up to 16% more with your company if they receive better service.
  • Over 60% of consumers stop doing business with a company after a bad experience.
  • 77% of consumers would recommend a company after they have a positive customer experience with them.
  • A full 33% of customers agree that resolving an issue the first time is vital to their relationship as a customer.

Benefits for At-Home Workers

Employees also benefit from working from home. According to

  • The average commuter spends between $2,000 and $5,000 per year — $3,500 average annually — on transportation costs such as gas, car repairs and car insurance.
  • At-home workers can save as much as $1,600 to $2,000 annually (an average of $1,800) on purchasing and maintaining office attire.
  • Discretionary costs for paying for lunch at an office can amount to $3,500 annually.
  • Employees who work from home are now entitled to tax breaks and home-office deductions.
  • A reduction in commuters has a positive effect on the environment. As a result of the stay-at-home orders with COVID-19, many major cities saw a decrease in pollution levels in only 30 days.
  • Perhaps the biggest benefit is that employees gain back hours when working from home. A stay-at-home workers’ commute is reduced from one-plus hours per day to zero. Considering an average of 1.5 hours spent daily on a commute, that comes out to 32 hours monthly they gain back — that’s four business days monthly, 48 days annually. Think of this time back as a measure of the quality of life that people don’t need to spend commuting.

All told, this comes to an annual savings for the at-home work as $8,800 per person, plus 48 fewer days spent commuting.

COVID-19 has more than proven that US workers are more productive when working from home. Several CIOs I’ve interviewed have shown marked increases in staff productivity, on average, while working from home — especially in IT help desk contact centers. All of the aforementioned benefits are win-win situations for organizations and employees.

Not everyone is suited to work from home, but many quickly adjusted to this paradigm as a response to COVID-19 mandates. And, in my opinion, this is the new norm.

Read this ebook “Succeed with a single source for contact center infrastructure and workforce engagement management” to learn more about how to improve your employee performance — and enhance the overall customer experience.