Business Productivity and Remote Work – The Facts (Updated 2021)

The latest evidence is out and it supports our long-term belief at Search Remotely. Remote work increases business productivity.

The Capgemini Research Institute surveyed 500 global organisations with at least $1 billion in revenue. Remote work has made these large businesses 51 – 70% more productive. And they’re anticipating productivity to rise another 17% over the next two to three years.

Okay, that’s just one study, with big business. But there’s a lot of evidence in this article, as we dive deep into small business productivity and remote work. Of course, some businesses disagree. So let’s look at the facts and explore how to maximise the benefits of remote work for your business.

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Latest Evidence on Business Productivity & Remote Work

The Capgemini Research Institute study was no surprise to us. Evidence in “The future of work: from remote to hybrid” shows employee productivity grew 63% in the third quarter of 2020. Most significantly, 70% of organisations believed these excellent productivity gains will be sustained beyond the pandemic. Organisations involved in the study predicted another 17% productivity rise over the next two to three years.

Capgemini’s research focused on big business, featuring 500 organisations with a minimum $1 billion in revenue, including over 5000 employee surveys. Perhaps most poignantly, all the evidence suggests that employees expect to continue working remotely part of the time, after the pandemic.

It’s an unavoidable trend. Employees want to work remotely. And business are reaping the productivity benefits. So why do some studies suggest remote work is hindering business productivity?

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Can Remote Work Hinder Business Productivity?

Yes it can, according to the authors of a report published by enterprise software company Aternity. They argue that working from home comes with a “productivity tax,” sighting evidence of employees spending less time working. Their study includes one of the more popular arguments during the pandemic – childcare gets in the way of work. Well of course working from home when also caring for your children reduces productivity.

But let’s frame this correctly. How about a study on productivity levels in the office, when employees’ children are also in the office? Working and also taking care of children is incredibly challenging, wherever the workplace. And let’s consider the alternative for most people around the world. When children are off school unexpectedly, especially when Covid-19 closes schools, parents have no choice but to be parents, not employees. So they can try and work from home at reduced productivity, or not work at all (0% productivity).

The other essential consideration is how to define productivity. Aternity measure productivity as “hours spent on business applications.” It’s the traditional measure used by businesses who are far behind the remote work curve, those viewing productivity as the input (number of hours). An automobile factory is not measured by the raw materials fed into its production line. Real productivity is always measured by output. Like how many cars were produced in the factory? Or what was the result of the work performed by the employees.

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Employee Productivity Increases With Remote Work

Evidence on remote work productivity existed long before the Covid-19 pandemic. Back in 1999 a research company tracked 1000 Trip.com employees doing the same job – half got to work at home and half stayed in the office. Nine months later and remote workers were shown to be 13% more productive.

There have been more than 20 similar studies over the last 20 years, before the pandemic, all with the same results. One caveat is that some employees prefer remote working over others. It’s important to remember that everybody thrives in different situations, so for some, remote working can reduce productivity. But the general trend is undeniable – workforce productivity increases with remote work.

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Why Does Employee Productivity Increase?

Fewer distractions. That’s a common theme throughout all the studies. While detractors argue that remote work reduces the important impromptu interactions around the water cooler or coffee machine, it also reduces the pointless, time-consuming interactions around the coffee machine. Working at home, without children around, means less distractions. According to the studies that’s anywhere from 4 – 24% increased productivity.

Most studies show that remote employees spend more time at work. In one study, remote employees were working 1.4 more days every month than those in the office – that’s an extra three weeks a year! They take less sick days, shorter lunch breaks, and are online more. This comes with stress – some employees report that they struggle with work-life balance and a feeling that they are always at work. When home is also work it’s hard to draw the line, even if you’re an experienced remote worker.

On the other hand, remote working gives employees more time in their day. For many office workers an eight-hour work day is actually a ten-hour day, because of a one-hour commute either way. So remote workers have more time and this can improve work-life balance.

Evidence shows that small business productivity and remote work is enhanced most by implementing good remote work practices. The office and the home are not the same. Remote workers perform better when they are given more autonomy and trust. Businesses perform better when implementing an output-based measure of productivity.

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Small Business Productivity & Remote Work Is More Than Just Employee Productivity

A more productive workforce results in a more productive business. But that’s only one part of the story. Let’s think of the automobile factory once more. Studies show that businesses with a remote work culture are feeding less into the production line. Their inputs are lower and their outputs are higher.

Consider overheads and the money that can be saved by reduced office space. The world’s biggest companies are going remote, buying themselves out of long-term office contracts, embracing a new normal. For example, rents have dropped 35% in Silicon Valley and San Francisco as those big companies go remote. So remote working is remaking where and how we live!

Office space is a big overhead and the financial benefits filter further. Documents are accessed electronically so printing costs are reduced (and let’s think about how much greener this is as well). How much does your small business spend on office furniture? Why pay for a meeting room when a Zoom subscription costs $18 a month? Spend less and get more, that’s what remote work is delivering for businesses big and small.

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Sustaining Remote Work Beyond the Pandemic

70% of organisations in the Capgemini study believed productivity benefits would be sustained beyond the pandemic. But that’s not really the important evidence here. Businesses don’t have a choice, not if they want to keep their employees happy. In Buffer’s State of Remote Work 2020 report, “98% of remote workers said they wanted to work remotely, at least some of the time, for the rest of their careers.” 98%!

In the same report, 97% recommended remote work to others. Why? Well the big three reasons are the ability to have a flexible schedule (32%), opportunity to work from anywhere (26%), and then not having to commute (21%). Once again the report focuses on trust. Productivity is highest when employers don’t track employee hours and screens, but focus on results their team produces. Likewise, a Havard Business Review provides evidence to what we all know. Flexibility suggests trust. And employees at high trust organisations maybe up to 50% more productive.

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How to Maximise Small Business Productivity & Remote Work

Reports are consistent in showing that remote work increases productivity. But there’s a massive difference from a 13% increase and a 70% increase. So how do small businesses get closer to 70%?

Get your IT sorted

IT issues stall all work and they are harder to fix in a remote environment. Remote systems are different to office systems. And while collaboration tools from Google and others are highly effective, they don’t always sync with existing systems. Number one with all remote teams is efficient tech.

It must be secure, fast, easy to use and easy to fix. Most small businesses switch to cloud-based solutions for this reason. Cloud-based technology is more future-proof and the foundations from which a remote team can work efficiently. Unfortunately, many business are tied into long-term tech contracts with providers. It’s also difficult to quickly implement changes.

However, implementing a new system can be done alongside your existing system. Develop the cloud-based remote tech then watch your productivity increase when it can be implemented.

cloud technology

Stay Connected (not just for work tasks)

The biggest drawback to remote work reported by employees is the inability to stay connected with colleagues. Many feel isolated. In one study “70% of respondents said maintaining relationships with their co-workers was just as important as their jobs.” At the same time, office workers spend 66 minutes per day discussing non-work topics, down to just 29 minutes for remote workers.

The feeling of isolation is most likely to be reported among new colleagues. So it’s essential that your small business makes it easy for employees to connect. This can be a virtual coffee room on Slack, scheduling regular check-up calls between teams and with employees, and encouraging employees to show they are available for a call (various apps make this possible).

Importantly, you need to remember the 29 minutes. Employees want to preserve their relationships so ensure they can keep their 29 minutes a day communicating with colleagues about non-work topics. It will benefit their productivity, not hinder it.

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Communication

Remote workers are most productive when they leverage all the benefits of remote work. These include flexible hours and flexible working locations. It’s no longer 9 – 5. You may lead a distributed team working distributed hours. Communication is everything in this situation, because yes, you’re not going to meet your colleagues over the coffee machine. You don’t need to either.

Practice over-communication and embed this in your culture. In an office you communicate when asked, because you are always there, available. When working remotely over-communicate your workings, so they are available for colleagues when needed. This isn’t micromanagement. By documenting progress and decision making you avoid duplication and increase efficiency.

Improve your video proficiency as well. Not just Zoom or video meetings, but leveraging video tools to communicate your message. Screencast and Loom are two screen recording programs. They allow you to communicate a personal message from afar. Plus, speaking to video is much faster than scribbling long emails. Also remember the communication cadence – you may need to meet more often now your team is remote. This will help everyone in your team.

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Trust, Trust, Trust

If you haven’t already, now is the time to make the switch to a business model based on output, not input. Checking exactly when your employee starts work and closes down will be counterproductive. Any employee can use a time tracker at home but be doing something completely different to work.

Trust that they will do their job and focus on their overall performance. Review performance rather than hours. And don’t lose trust in employees because you can’t see them. A 2020 Havard Business Review research paper shows that many managers struggle with remote management. It requires a different skillset and mindset. When managers cannot see their employees doubts creep in. So they set unreasonable expectations, move towards micromanagement, and create more work-life stress.

With a remote team it’s even more important to instill a culture of accountability, transparency, reciprocity and confidence. Share openly and assume goodwill and good intentions. Sure, you can’t see your employee. But measuring their work and your business success comes down to output. For small businesses during the pandemic, remote work means trust has never been more important.

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Small Business Productivity & Remote Work

The success of every business is based upon its workforce. So do you have a workforce suitable for remote working? When you hire new employees, do you consider how well the candidates will perform in a remote working environment? If you work remotely, surely it also makes sense to hire remotely.

Search Remotely is the leading platform for remote work recruitment. Only remote jobs are advertised on the platform. Businesses can access a global talent pool or remote job seekers. And they can be supported all the way through optimised remote work recruitment.

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