The Cost-Benefit Analysis of Hiring Remote Staff vs. In-House Employees

Author: Delegate
Date Published: July 29, 2024
Time Read: 3 min read

Companies are now faced with the choice of hiring remote staff or maintaining an in-house team. Each option has its own set of advantages and challenges, which can significantly impact your business’s financial health and operational efficiency.
Want to know whether to start hiring remote staff versus in-house employees, here’s our cost-benefit analysis, helping you make an informed decision.

1. Understanding the Costs

In-House Employees

Hiring in-house employees involves several direct and indirect costs:

Salaries and Benefits: According to the Bureau of Labor Statistics, the average annual salary for U.S. workers was approximately $56,000 in 2022. On top of salaries, companies typically provide benefits such as health insurance, retirement plans, and paid time off. The Society for Human Resource Management (SHRM) reports that benefits account for about 30% of total compensation.
Office Space: Maintaining an office involves costs such as rent, utilities, and maintenance. The Global Workspace Survey estimates that office space costs can range from $12 to $45 per square foot annually, depending on the location and size of the office.
Equipment and Supplies: Providing workstations, computers, and other office supplies also contributes to the cost of in-house employees. This can amount to several thousand dollars per employee per year.

Remote Staff

Hiring remote staff can offer substantial cost savings:

Reduced Overhead: Remote staff eliminates the need for physical office space, reducing costs related to rent, utilities, and maintenance. According to a study by Global Workplace Analytics, companies can save an average of $11,000 per remote employee annually by avoiding office-related expenses.
Flexible Compensation: Remote staff often work from regions with lower living costs, allowing businesses to benefit from lower salary expectations. For example, remote staff in the Philippines may earn significantly less than their U.S. counterparts while delivering high-quality work. According to PayScale, the average salary for a remote worker in the Philippines is about $10,000 per year, compared to $56,000 in the U.S.
Variable Costs: Remote staffing can be scaled up or down based on business needs, allowing for more flexible budgeting. The cost of hiring remote staff can be adjusted according to workload and project requirements, providing financial flexibility.

2. Evaluating the Benefits

In-House Employees

In-house employees offer several benefits:

Control and Integration: Having employees on-site allows for better control and integration into company culture. A survey by Deloitte found that 79% of organizations believe in-house employees offer better alignment with company values and objectives.
Immediate Availability: In-house employees are readily available for meetings and collaborative tasks. According to the Harvard Business Review, in-house teams are often more responsive to immediate needs and can address issues more quickly.
Enhanced Supervision: On-site supervision can be easier, allowing managers to provide immediate feedback and oversight. The Journal of Management Studies highlights that direct supervision can lead to higher performance and accountability.

Remote Staff

Remote staff also presents distinct advantages:

Access to Global Talent: Hiring remote staff provides access to a global talent pool. A report by LinkedIn indicates that 87% of talent professionals believe remote work increases their access to a wider range of skilled candidates.
Increased Productivity: Studies show that remote workers can be more productive. According to a study by Owl Labs, remote workers report a 22% increase in productivity compared to their in-house counterparts. Remote work often leads to fewer distractions and a more flexible work environment.
Improved Work-Life Balance: Remote work can enhance employee satisfaction and retention. A survey by Buffer found that 98% of remote workers want to continue working remotely for the rest of their careers due to the improved work-life balance.

3. Assessing the Impact on Company Culture

In-House Employees

Maintaining a cohesive company culture can be easier with in-house employees. The ability to interact face-to-face fosters a stronger sense of community and collaboration. The Corporate Leadership Council reports that strong company culture can lead to a 20% increase in employee engagement and retention.

Remote Staff

Building and maintaining company culture with remote staff requires intentional effort. Strategies such as virtual team-building activities, regular communication, and inclusive practices can help bridge the gap. The Harvard Business Review emphasizes that investing in virtual culture initiatives can mitigate the challenges of remote work and enhance team cohesion.

4. Evaluating the Recruitment and Onboarding Process

In-House Employees

The recruitment and onboarding process for in-house employees involves multiple stages, including job postings, interviews, and training. According to SHRM, the average cost to hire a new employee is about $4,000, with onboarding costs adding further expenses.

Remote Staff

While hiring remote staff can streamline the recruitment process, it also presents unique challenges, such as assessing remote work skills and ensuring effective communication. However, companies like Delegate.co can simplify this process by handling recruitment, onboarding, and training for you, allowing you to focus on your core business activities. This can save you time and resources, and ensure that you get the best talent without the hassle.

Hire Remote Staff Now

The decision between hiring remote staff and in-house employees involves weighing various costs and benefits. While in-house employees offer greater control and immediate availability, remote staff can provide significant cost savings, access to global talent, and increased productivity.
If you’re considering hiring remote staff but want to avoid the complexities of onboarding, training, and vetting, Delegate.co can assist you. We handle all aspects of remote staffing, so you can focus on growing your business. Visit www.delegate.co to learn more about our services and book a call with our team today.