If you're located in an expensive area such as San Francisco or New York City, telecommuters can save you substantial amounts of money. They might live in Fargo, North Dakota, with a low cost of living and good Internet connectivity--and be satisfied with much lower salaries than in big cities. In addition, many workers will accept a lower salary in exchange for telecommuting. Finally, if you hire the workers as independent contracts, you'll save still more on payroll costs.
Telecommuting can save your company substantial sums with little in the way of real downsides, as long as you manage security carefully. The perception of difficulty in supervising remote workers often seems to be the biggest bar to implementing telecommuting, but you can overcome this by looking at the bottom line.