When the term “virtual office” was coined back in the early 1980s, few imagined commuting to the office would one day be a thing of the past. However, in the wake of the COVID-19 pandemic, many associations were forced to turn on a dime, transitioning entire work forces to remote status. However, now that COVID-19 appears to be here for the long run, it is time for nonprofits to contemplate the impact virtual offices are having on their budgets.

As you might have expected, there are more benefits to virtual offices than working in your pajamas. First, consider the fact that rent is usually the most expensive line item in your budget after salaries and benefits. Although the cost of commercial real estate has most likely gone down considerably since the beginning of the pandemic, many cities are considering converting office space to residential housing. With employees opting for their kitchen instead of K Street, businesses stand to save a tremendous amount of money. In addition, staying at home means lower commuter cost, and more time spent at work instead of pounding the steering wheel in rush-hour traffic.

With employees opting for their kitchen instead of K Street, businesses stand to save a tremendous amount of money.

However, some savings come at a cost. Home offices need to be outfitted with office equipment like high-speed internet, VOIP phones, and printers. In addition to virtual-office-enabling hardware, associations will need to budget for software and apps like video streaming services and offer training for the less technologically inclined. There are also practical considerations. For instance, if a business receives checks, it may need to budget additional costs for a lockbox. There are also intangibles that play a role in employee morale that, although hard to quantify, have an impact on the bottom line. Businesses should make more time for extracurriculars to maintain a happy workforce and consider treating employees to lunch or more budget-friendly perks like Zoom happy hours.

Every organization needs to contemplate its virtual future on an ad hoc basis, depending on their unique culture. Here are some potential solutions:

The 100 percent remote option. If businesses choose to be remote 100 percent of the time, they will likely see big savings -particularly, a steep decline in rent and utilities expenses. However, they should consider doing more to give employees a morale boost and think of ways to keep staff connected. Virtual happy hours, sending staff desk gifts to their homes, and more frequent check-ins will be practical requirements as well.

The right size option. Many businesses are now right sizing their offices and, instead of assigning offices to employees, have created a more shared workspace atmosphere. This would involve lowering rent and utilities to reflect a smaller office space as staff could rotate in-person days in the office and most likely save up to 50 percent on this line item.

The shared office space option. Shared office spaces offer the convenience of the right size option above, along with a good deal of lease flexibility. However, this comes at a cost. Chic meeting booths and pub style conference rooms typically have zero privacy, which could be a turnoff for some employees. There are numerous companies offering shared workspaces, which will lower rent and utilities expenses to varying degrees depending on staff size and how frequent the meetings are held, but it is safe to assume a decline of approximately 75 percent for those who choose to meet once or twice a month.

The maintain the status quo option. This is a choice made by organizations that either have long-term leases or have decided to renew their leases during the COVID-19 pandemic. They hope things will improve and people will come back to the office.

COVID-19 brought tremendous challenges, but every cloud has a silver lining. Working from home will help nonprofits save big time on rent and utilities. However, each business needs to think deeply about its own work culture and needs.