How to Calculate Remote Hiring Savings

What is Remote Hiring Savings?

The Remote Hiring Cost Savings Calculator estimates how much a company saves by hiring remote workers compared to local/office-based employees, factoring in salary differentials, real estate savings, and expanded talent pool benefits.

Formula

Annual Savings per Hire = (Local Salary - Remote Salary) + Office Space Savings + Reduced Turnover Value

Sl: Local Market Salary ($/year) — Competitive salary for the role in your office city
Sr: Remote Market Salary ($/year) — Average salary for remote candidates in the broader market
Os: Office Space Cost per Employee ($/year) — Annual cost of office space, utilities, and facilities per person
Tr: Turnover Reduction (%) — Percentage reduction in attrition from offering remote work

Step-by-Step Guide

1Enter the local market salary for the role in your office location
2Input the average salary for remote candidates (typically from wider geographic pool)
3Add per-employee office space costs saved ($5,000-15,000/year)
4Factor in reduced turnover costs from offering remote flexibility (typically 10-25% lower attrition)

Worked Examples

Input

SF-based company: Local salary $160k, remote avg $125k, office space $12k/yr per seat

Result

Salary savings: $35,000 + Office savings: $12,000 = $47,000 per hire per year

Input

NYC company: Local $140k, remote $120k, $15k/yr office cost, 15% lower turnover (saves $25k per avoided replacement)

Result

Salary: $20k + Office: $15k + Turnover: $3,750 = $38,750 per hire per year

Common Mistakes to Avoid

✕Assuming identical productivity between remote and local hires without measuring — some roles may have 5-15% productivity differences either way
✕Not counting the cost of remote work infrastructure (laptops, stipends, tools) which partially offsets real estate savings
✕Overestimating salary savings by using developing-country rates for roles that require overlapping US hours

Frequently Asked Questions

How much do companies save on office space per remote worker?

US office space costs $5,000-$15,000 per employee per year (higher in tier-1 cities). A fully remote worker eliminates this cost entirely. Hybrid workers reduce it proportionally, or companies can implement hot-desking at 1 desk per 2-3 employees.

Do remote workers really have lower turnover?

Yes. Multiple studies show remote work options reduce turnover by 10-25%. Stanford research found a 35% reduction in quit rates when offering work-from-home. Given that replacing an employee costs 50-200% of salary, this is significant.

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