New Study Uncovers the Secrets of Remote Work Productivity

The COVID-19 pandemic has forced many businesses to adapt to remote work, and the results have been surprising. A new study from the Becker Friedman Institute at the University of Chicago found that remote work saved about two hours per week per worker in 2021 and 2022. Workers allocated 40 percent of time savings to work and about 11 percent to caregiving activities. 

That’s over 45 minutes more work per week! No wonder extensive data shows that workers are more productive when working remotely.

As a highly experienced expert in hybrid and remote work, I have consulted for many companies on this topic. And my clients invariably express surprise over the clear data showing the improvement in productivity caused by remote work.

The Data on Remote Work Productivity

A study conducted by Stanford University in the summer of 2020 discovered that remote workers were 5% more productive than those working in a physical office. By the spring of 2022, remote worker productivity had risen to 9% as businesses became more familiar with remote work practices and invested in technology to support it. This trend was also confirmed by another study utilizing employee monitoring software which found that remote workers were substantially more efficient than their in-office counterparts.

Overall, productivity is significantly higher with remote work, as evidenced by a study from the National Bureau of Economic Research (NBER) which found that businesses relying on remote work, such as IT and finance, saw productivity growth increase from 1.1% between 2010 and 2019 to 3.3% since the start of the pandemic. In contrast, industries that require in-person contact, such as transportation, dining and hospitality, saw productivity growth decrease from 0.6% between 2010 and 2019 to a decline of 2.6% since the start of the pandemic.

In addition to increased productivity, remote workers are often willing to accept lower wages in exchange for the flexibility of working from home. Another NBER study found that remote work decreased wage growth by 2% over the first two years of the pandemic as employees view it as a valuable benefit. A survey of 3,000 workers at top companies such as Google, Amazon, and Microsoft found that 64% would prefer permanent work-from-home over a $30,000 pay raise.

Remote Work Productivity: Case Studies

One of my clients, a mid-size IT services company, found that their employees were able to accomplish more in less time when working from home. This was because they were not wasting time commuting and were able to create a comfortable and efficient work environment that suited their needs.

Similarly, a large financial services company reported that remote work led to improved focus and concentration among their employees. They found that employees were better able to stay on task and avoid distractions when working from home. This led to a significant increase in productivity and helped the company to achieve its goals.

Furthermore, companies that offer remote work opportunities are able to save on cost-of-living expenses by hiring workers in lower cost-of-living areas, both within the US and internationally, to secure top talent at a lower cost. This is a major factor that led one of my clients, a late-stage software-as-a-service startup, to offer all-remote positions. Such cost savings lead to a more productive use of financial and human resources. 

Remote Work Leads to Improved Work-life Balance

Another benefit of remote work is that it leads to improved work-life balance, which prevents burnout and thus increases productivity and retention alike. A mid-size retail company found that remote work allowed their back-office employees to better balance their work and personal responsibilities. This led to happier and more fulfilled employees, which in turn led to better productivity and performance.

Similarly, a large healthcare tech company reported that remote work allowed their employees to better manage their time and energy. They found that remote work led to fewer distractions and interruptions, which allowed employees to focus on their work and personal responsibilities more effectively.

Ensuring Remote Work Productivity

To fully realize the benefits of remote work, businesses need to ensure that their employees are equipped with the right tools and resources. This includes providing employees with the necessary technology to work remotely, such as laptops, internet connectivity, and collaboration tools. Businesses also need to provide their employees with the necessary training and support to work effectively and efficiently.

In addition, businesses need to establish clear communication channels and protocols to ensure that employees can effectively collaborate and stay connected with their colleagues, even when working remotely. This includes regular team meetings, virtual check-ins, and other forms of communication that allow employees to stay connected and stay informed about what is happening in the company.

Remote work productivity is a key to success in the modern business world. The benefits of remote work, including increased productivity, improved focus and concentration, and improved work-life balance, are too significant to be ignored. Business leaders who want to stay competitive and succeed in the long term should seriously consider implementing remote work policies in their companies.

Written by Dr. Gleb Tsipursky.

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