So you are thinking about increasing your workforce and considering hiring remote employees. But don’t remote employees just sit on their couches, eating snacks and watching Days of our Lives? What if allowing employees to work from home leads to a decrease in productivity, adversely affecting your bottom line?
The evidence is in that remote employees actually increase productivity and present a substantial cost savings for your business.
Remote workers don’t have the distractions of an office environment. There is no water cooler to gather around and discuss topics unrelated to work. There is no catching up on how fellow employees spend their weekend.
According to a study conducted by CareerBuilder, 39 percent of workers reported that gossip was a major distractor in the workplace. Meetings also ranked high as a distractor with 24 percent of those surveyed. Noisy coworkers were cited by 20 percent of the survey participants.
In addition to the top distractions, in-office employees have gatherings to celebrate birthdays and other special occasions, as well as less productive “impromptu” meetings when another employee just drops by their desk. Remote workers, freed of all these distractions, are able to stay focused on their work, which leads to increased productivity.
The average commute time is on the rise, according to 2017 census data. The average commute time rose to 26.9 minutes from 26.6 minutes the previous year. The study also reported that more than 14 million Americans have a commute time greater than one hour.
Remote employees do not have the commute time and studies show that this time is repurposed for the work they are doing. While in-office employees typically end up arriving late because of being stuck in traffic, or leave early to “avoid the traffic,” remote employees devote more of this time to work related activities.
Stanford professor Nicholas Bloom decided to conduct a study on whether or not remote employees presented an increase or decrease in productivity. He found a willing participant in one of his economics graduate students, James Liang. Liang was the co-founder and CEO of Ctrip, China’s largest travel agency with over 16,000 employees.
Ctrip’s office in Shanghai was an extremely steep overhead expenditure. Furthermore, the high cost of living in Shanghai meant that most of the workers were making long commutes from where they lived outside the city. Liang wanted to explore the idea of allowing employees to work from home because the attrition rate for his company was terrible and the cost of replacing and training employees was having an impact on his bottom line.
Nicholas Bloom designed a study where 500 of Liang’s employees were divided into two groups -- a control group of employees who continued to work in the office and a group of employees who volunteered to work from home. The remote workers had to meet certain conditions, such as having a dedicated work space, at least six months tenure with Ctrip, and a reasonable broadband connection.
After nearly two years of conducting the study, Bloom and Liang were pleasantly surprised at the results. There was an amazing boost in productivity for the remote workers, equivalent of a full day’s work. Employee attrition decreased by 50 percent. Additionally, Ctrip saved nearly $2,000 per employee on rent after decreasing the size of their headquarters. (Bloom discussed these results in a TEDx talk in 2017.)
So if you are considering hiring remote employees or letting your current employees work from home, even just a couple days a week, the evidence suggests that you will see an increase in productivity and a decrease in costs for your business. It’s time for you to discuss this with payroll specialists who have the expertise to help you manage remote employees.
There's no denying the growing trend of remote employment in the United States. So check out our comprehensive overview of everything employers should know about a remote workforce, including upsides, downsides and overall impact to payroll and HR systems.