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  • Ron Rechan

The Hidden Costs of Remote Work For SMB by Ron Rechan

The shift to remote work has been a game changer for many businesses. Although some SMB companies see remote work as a path to lower costs, there are unforeseen expenses (and challenges) of managing a remote workforce. A phenomenon that is fast becoming impossible to ignore. SMB business leaders who want to maintain strong financial footing and healthy employee engagement must educate themselves on these hidden costs.

As a small or medium business owner, don't be caught off guard regarding the following trends:

  • By 2025, according to Forbes, an estimated 32.6 million Americans will be working remotely, which equates to about 22% of the workforce.

  • In 2023, according to Airgram, 16% of companies are fully remote while 44% of companies don't allow remote work of any kind. A whopping 71% of the global workforce.

In this white paper, I will break down the major under-the-radar expenses of operating remotely and provide strategies to address them.

Technology Expenses

One of the most obvious yet often underestimated hidden costs relates to your technology expenses. For your remote employees, SMB companies must provide the proper equipment, software, connectivity, data access, and tech support. Many have upgraded systems across the board to enable smooth remote work. IT budgets must factor both initial and ongoing technology costs.

Quick Tips:

  • Audit current tech vs. remote work needs and create a detailed budget. Consider one-time and recurring costs.

  • Pay special attention to your CRM software. Many CRM vendors have adjusted software features to compliment the hybrid work environment.

  • Outline clear policies on what the company will reimburse or directly pay for.

Enhanced Cybersecurity

More at-home employees drastically raise cybersecurity risks. Potential breaches can create massive costs from legal liabilities, IP loss, and reputational damage. Robust security measures are essential.

Quick Tips:

  • Work with cybersecurity experts to conduct risk assessments and implement best practices.

  • Invest in multi-factor authentication, encryption, advanced firewalls, and endpoint security.

  • Provide mandatory cybersecurity training for employees.

  • Schedule penetration testing, disaster simulations, and insurance reviews.

  • Account for backups, cyber insurance, and data storage.

Lost Productivity Expenses

Collaboration, innovation, and productivity can decline with remote work. Some employees thrive independently, but others need more support. Communication barriers arise, and it's certainly challenging to replicate office camaraderie and energy.

Quick Tips:

  • Set clear expectations for deliverables, availability, and communication.

  • Invest in project management software to align efforts.

  • Encourage video calls and chat tools for engagement.

  • Develop training programs and access to mentors to improve remote work skills.

  • Watch for performance issues and address promptly.

Real Estate Costs

While office space needs may decrease, many SMB believe a physical footprint is still essential. Ongoing expenses for a headquarters or smaller flex spaces remain.

Quick Tips:

  • Carefully evaluate must-have on-site amenities before reducing space.

  • Explore executive suite rentals or coworking spaces for flexibility.

  • Repurpose existing spaces for multi-use rooms and remote work tech.

  • Consider leasing smaller regional spaces near employee clusters.

  • Review sale-leaseback options to access capital while maintaining necessary real estate.

HR Management Expenses

Remote hiring, onboarding, training, performance reviews, and culture building require HR tools and strategies tailored for distributed teams. Managers also need a new set of skills for leading remote teams.

Quick Tips:

  • Update policies, handbooks, contracts, and communications for remote environments.

  • Invest in interactive online training for leadership, culture, and collaboration skills.

  • Expand HR capabilities in video interviewing, virtual onboarding, remote performance management, and asynchronous learning.

  • Host online team events to connect employees.

  • Provide mental health resources like counseling and EAPs.

Travel Costs

More travel may be inevitable with a dispersed workforce for activities like onboarding, training, meetings, sales calls, and client visits.


  • Outline travel guidelines and budget limits.

  • Leverage tools like virtual conferences and document sharing to limit trips when possible.

  • Align trips when feasible, such as combining regional sales calls or events.

  • Consider Airbnb and temporary housing to reduce costs.

  • Negotiate discounted corporate rates with travel vendors.

The remote environment will continue to evolve. Staying on top of hidden costs and making smart investments in your workforce, operations, and technology will pay dividends through strengthened finances, productivity, and employee satisfaction. With careful planning, remote work can be leveraged as a strategic advantage for the SMB.

By Ron Rechan, Business Consultant For SMB

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