Can companies get more work done remotely?
The Covid-19 pandemic ushered in a deep behavioural shift in economies everywhere, with remote work becoming truly normalised. There is an ongoing debate about whether remote work leads to higher or lower employee productivity, so we decided to review objective data instead of relying on subjective opinions. But first, let’s look at the theoretical case that argues in favour of a positive impact on productivity of remote work.
Why working from home can boost output
There are good reasons why employees generally prefer remote work. It seems that remote jobs get them working better and for longer, and here’s what we think contributes to this phenomenon.
- No commute. Arguably the biggest benefit of working from home is the elimination of commuting. Rather than spending precious minutes or even hours on the subway or stuck in traffic, employees can re-invest this time into their daily work or use it to better balance work and home responsibilities. This can not only directly improve productivity, but also boost output indirectly given the absence of commute-related daily stress.
- Better concentration. Outside the standard office environment, less time is spent chatting with colleagues, taking coffee breaks, or struggling with distracting noises. Everybody knows the feeling of being deeply engaged in work when a particularly chatty neighbour breaks the ‘zone’ and disrupts our concentration! This is referred to as ‘context switching’, i.e. when you step out of the zone to engage with someone and have to step back in later (thereby expending more energy and time), with some research suggesting it can take up a whopping 80% of your productive time in a day. At home, there are simply fewer distractions, allowing for a more productive routine.
What’s the risk?
As the Great Resignation unfolds in Australia in 2022, businesses face two key risks. First, as the labor market tightens further and upward pressure on wages intensifies, payroll costs will increase as firms pay higher salaries to retain and attract talent. The second, and potentially more disruptive, risk is that the shortage of workers will hinder the ability of businesses to continue their operations optimally and execute future growth plans. As noted earlier, Australian businesses are already aware of this challenge, which could potentially turn into a systemic issue, impacting the wider economy for years to come.
- More inclusivity. One of the hidden perks of remote work is that it can be great for introverted people. While remote work does not completely cut out the need for human interaction, it does mitigate the stress and fear of attending crowded meetings or presenting in front of numerous colleagues. Video conferencing makes the possibility of interacting with co-workers easier for the more reserved amongst us, potentially leading to an overall higher efficiency within teams.
- A healthier lifestyle. There is a lot of research to suggest the strong mind-body connection. With remote work freeing up a significant amount of time in an employee’s day, they have the opportunity to design a healthier routine and exercise more regularly. A person may simply choose to work out of a comfortable room, wear what they like, go for a run, or listen to calming music – on the speakers! When an employee is in an improved headspace due to better physical health, it is likely to reflect in better work outcomes.
What do the numbers say?
Even before the pandemic, research indicated that remote work could lead to higher productivity. A study conducted in 2013 by Stanford University researchers delved into the benefits of working from home. Employees of a Chinese travel agency were surveyed over a period of nine months, and it was observed that their performance improved by 13% when employees worked from home compared to those in the office, resulting in more minutes worked per shift and more work completed per minute. The success of this experiment led the Chinese company to roll out a work-from-home option for the entire firm. Half the workers switched to remote work, and productivity gains reached 22%.
Since 2020, several studies have been conducted to gauge whether the productivity enhancing benefits of remote working were realised during the pandemic. Researchers affiliated with the Mexico Autonomous Institute of Technology and the The University of Chicago Booth School of Business tracked more than 30,000 US workers, aged 20–64 and earning at least $20,000 per year during 2019-21, were tracked to determine any positive link between remote work and productivity. The results revealed that the remote work trend could indeed be positive for output, and could ramp up overall employee productivity in the US by 5% compared to the pre-pandemic era.
Other studies tend to support this conclusion. A report by Owl Labs in 2021 showed that 90% of those who worked from home during the pandemic said that they are at the same productivity level, or higher, compared to them working from an office. Of these, 67% said they were more productive while working at home, while 24% said their productivity remained the same. In terms of how many hours these employees were really working from home, 55% said that on average, they worked more hours than at the office while 33% said they worked the same hours as at the office. Further research from Owl Labs revealed that remote and hybrid employees were 22% happier than their counterparts in an office environment, and stayed in their jobs longer.
Ergotron released a recent study, in January 2022, where 1,000 full-time employees were sampled. The results suggest that working in a hybrid or entirely remote environment helped employees improve their physical and mental health, and achieve better work-life balance. 88% stated that the improved flexibility increased their job satisfaction, 75% stated they had a more active lifestyle, and 75% said their work-life balance had improved.
The transition to remote work
With increasingly solid evidence that there exists a real and substantial link between remote work and higher productivity, companies with an eye towards the future need to adapt quickly. Several steps can be taken to ensure a smooth transition of the workforce from the office to an at-home work environment.
First of all, the right infrastructure needs to exist for communication with your employees. To coordinate remotely, there must be a clear definition of when and on which channels employees have to communicate. Formal communication also needs to be managed, and appropriate policies designed, to minimise any disruption from transitioning to remote work and maximise the gains.
Next up is creating work visibility. Keeping everyone in the loop about progress, work status, objectives, and results is important and can be achieved by deploying the right technology. Several tools exist that facilitate management of virtual teams and projects. These can be complemented by weekly round-ups where feedback and learnings can be shared within teams virtually.
Fostering your community and developing synergies between colleagues is yet another important step, since remote work lacks in-person interactions. Relationships can be strengthened by arranging meetups from time to time or even simply having remote team building exercises. Virtual lunches and or friendly competitions can also encourage workers to get to know each other.
Build your remote team
There is a clear approach that can be taken to get your office-based team into the remote working environment. But what about hiring remote workers from scratch? Companies are confronted by a global pool of talent, costs of vetting candidates, onboarding them, and managing their payroll, especially when employees are based offshore. Other complexities with hiring internationally include maintaining an offshore presence to onboard and pay remote workers, protecting intellectual property, and providing support to your international team.
Faced with these challenges, many companies simply give up and choose not to hire offshore, losing out on exceptional talent. That’s where Bettersource can help. Our technology-enabled platform helps clients hire offshore employees from our pre-vetted talent pool, for all client-servicing and software development roles. On our clients’ behalf, we handle employee onboarding, payroll, taxes, and provide on-ground support, so companies and their teams can focus on getting more work done.