I've written repeatedly about the perils of open plan offices but have never explained how the alternative-;allowing most or all of your employees to work from home-;can have a huge positive impact on your bottom line. Here's how:
1. Fewer personal expenses equals lower salary demands.
By insisting that your employees come into a central office, you are asking them to buy and maintain a wardrobe, pay for transportation, and spend extra daily hours of free time on a commute. Employees (unless they're very stupid) will naturally expect to be paid a higher salary to defray these expenses, which can run to thousands of dollars of year.
2. Fewer in-office workers reduces your facility costs.
Cost-savings through greater employee density per square foot is a major motivation behind open-plan offices. However, employees who work from home all the time expend require no floor space and employees who come into the office occasionally need not be assigned permanent work areas, further reducing floor space needs. This alone can save millions of dollars a year.
3. Lower likelihood of sexual harassment.
This is simple mathematics. The more employees that work from home, the fewer opportunities there are for one of them to act offensively. While sexual harassment can certainly take place through email or Skype, such interactions leave a permanent audit trail, something that’s not true when employees share the same physical work environment.
4. Wider pool of talented candidates.
While offices located in densely-entrepreneurial areas (like New York City or Silicon Valley) can draw on extensive talent pool, there's stiff competition for the best people. By contrast, a corporate culture that effectively manages work-from-home can hire talent from anywhere in world, often for much less than local talent would cost. As a bonus, since such workers needn't relocate, you don't get stuck paying their relocation costs.
5. Less impact from contagious diseases.
When work-from-home employees become ill, they can usually still get some work done, especially since they needn't dress up, commute, walk around the office, etc. Even better they can get some work done without exposing everyone else in the office to the same disease. This lowers absenteeism while raising the general level of health and productivity.
6. Healthy, unstressed workers increase productivity.
Working-from-home allows employees to set reasonable sleep schedules (less prep, no commute), eat better (since they've got their own kitchens available) and isolate themselves from some of the stressful behavior of their coworkers. As a result, they're healthier and calmer and can therefore accomplish more. Because they're less likely to burn out, they'll remain productive for longer period of time.
7. Higher retention and lower recruiting/on-boarding costs.
Multiple surveys have shown that employees are more likely to be satisfied and happy at their jobs if they have more control over their work-hours and work environment. This means lower turnover, lower recruitment costs, and lower training costs. For customer facing roles (especially sales), a higher employee retention rate translates directly into a higher customer retention rate.
7.5. Less chit-chat, gossip and office politics.
I'm not counting this is a full reason because some employees (especially extraverts) enjoy the social aspects of a centralized workplace. In addition, some office politics and gossip may actually help "grease the wheels" to getting things done. Overall, though, I suspect that the liabilities outweigh the benefits, but I know of no research that quantifies either.