Motus, the definitive leader in reimbursement solutions for businesses with mobile-enabled workforces, today released a new report, “Idle Assets: A Financial Burden.” The report examines the financial impact of idle business assets, identifying how companies can optimize expenses as they adapt to the evolving, post-COVID business landscape.
According to the findings, assets that have traditionally been considered essential to businesses, including office space, company-owned vehicles and mobile phones, remain costly expenses when they are not used. While most of the country was under stay-at-home orders in March and April, approximately 55% of the U.S. workforce became remote workers. This resulted in 11 billion square feet of unused office space, which cost U.S. employers $54 billion.
Similarly, the report found that business driving activity declined sharply, reaching 62% below normal levels at its lowest point with idle company-owned vehicles spanning from 1.2 to 1.6 million vehicles. Over the six weeks when most parts of the U.S. were under stay-at-home orders, companies paid an average of $945 per idle vehicle – totaling over $1.5 billion nationally. While mobile phones experienced the least impact on usage, the report also found that unused phone lines cost companies between $7,800 and $10,600 per 100 devices every year.
“Although businesses are starting to recover financially as states reopen, they are still absorbing additional costs for their idle assets every year,” said Ken Robinson, market research manager for Motus. “By finding ways to convert fixed-cost assets to more flexible approaches, businesses can adapt quickly to unexpected or changing economic conditions. One approach to minimize the dollars tied up in unused assets is to reallocate funds from company-provided assets to reimbursement programs.”
Examples of reimbursement programs include converting company phones to a bring-your-own-device (BYOD) program or adopting a Fixed and Variable Rate (FAVR) program in place of company-owned vehicles. Transitioning to a BYOD program and eliminating company-provided phone lines can increase cash flow for a company with 100 employees by as much as $10,000 per year. Businesses can also save 21% on costs per vehicle with FAVR reimbursement programs. In addition to reimbursement programs, companies that shift to partial or entirely remote workspaces can increase annual cash flow by more than $50,000 for every 100 employees.
“When choosing a reimbursement strategy, companies will see the greatest financial benefit using a FAVR-based approach,” said Robinson. “The cost of mobile phones, driving and office space all vary based on where an employee is located, and reimbursements should accurately reflect those differences. FAVR reimburses based on the local costs of where each employee lives and drives, as well as the amount they operate their devices for business.”
To access the full report, please visit: https://resources.motus.com/reports/motus-cost-of-idle-assets-report.
Motus is the definitive leader in solutions for businesses with mobile-enabled workforces. Motus simplifies reimbursement and management of mileage, mobile devices and remote work with proprietary software that calculates personalized reimbursements for each employee, while improving employee productivity, reducing overall mobility costs and supporting customers’ tax and labor law compliance programs. The company’s unmatched living cost data, refined over more than 80 years and updated in real time, has made Motus the leading provider of mobile workforce management solutions for top Fortune 500 companies. Motus automotive data, captured and analyzed across the world’s largest retained pool of drivers, also underpins the annual Internal Revenue Service (IRS) business mileage standard, the amount an individual can deduct for business vehicle expenses. For more information please visit www.motus.com or connect with us on Twitter, Facebook, Instagram or LinkedIn.