Working Remotely Works: How Smart Employers Can Build Morale and Enhance Productivity

Unfortunately, remote work is not the standard. A story in The New York Times reports that telecommuters make up only 2.6 percent of the American workforce, when defined as those at private, nonprofit or government organizations who work from home at least half the time. Telecommuting has increased, however, rising 79 percent between 2005 and 2012. For 2014, FlexJobs reported a 26 percent increase in work-from-home jobs on its site over the previous year, led by top companies like Amazon and Kaplan.

The positive impact remote work options can have on a company’s bottom line and culture is increasingly being acknowledged by smart employers. The organizations on this list are among those leading the charge to show that remote work options are a part of successful 21st century workplaces.

Sara Sutton Fell, founder and CEO of FlexJobs

In an interview with Harvard Business Review, authors of a recent work-from-home study presented the results of their experiment at Ctrip, China’s largest travel agency. Along with other evidence, their findings demonstrate that although remote work isn’t ideal for every situation, savvy companies can reap the rewards.

Benefits of Remote Work

Productivity

Perhaps the biggest highlight of the Ctrip experiment, which placed 255 call center employees into a work from home or control group for nine months, was the boost in productivity for those who worked from home. “The results we saw at Ctrip blew me away,” said Nicholas Bloom, the study’s lead author. “We found that people working from home completed 13.5 percent more calls than the staff in the office did—meaning that Ctrip got almost an extra workday a week out of them.”

“One-third of the productivity increase, we think, was due to having a quieter environment, which makes it easier to process calls. … Offices are incredibly distracting places,” Bloom said. “The other two-thirds can be attributed to the fact that the people at home worked more hours. They started earlier, took shorter breaks, and worked until the end of the day. They had no commute. They didn’t run errands at lunch. Sick days for employees working from home plummeted.”

Other companies and research found boosts in productivity for remote workers.

• Home-based workers at Sun Microsystems returned about 50 percent of the time they saved by not commuting to the company, keeping the other half for themselves and their families.
• Seventy percent of telecommuting employees improved their productivity, according to a survey from collaboration software provider PGi.
• Seventy-eight percent of managers reported that telecommuting workers were more productive than or as productive as their in-office colleagues, according to a survey from Korn/Ferry International.
• A meta-analysis of 46 studies published in the Journal of Applied Psychology found performance benefits for telecommuting.

Employee Morale and Culture

The improvement remote working has on employee morale is almost a given. At Ctrip, Bloom reported that “predictably, at-home workers reported much higher job satisfaction.”

Ctrip’s study concluded that remote workers had a higher positive attitude, less work exhaustion, and less attrition. At-home workers had an attrition rate of just 17 percent, less than half of the control group at 35 percent.

Sun Microsystems believes that its flexible work options represent one of the two leading reasons why 82 percent would recommend the company to others. In the PGi survey, 80 percent of telecommuting employees reported improved morale, 82 percent improved their stress levels and 69 percent improved for absenteeism. The Journal of Applied Psychology analysis found remote workers to have more job satisfaction, less motivation to leave the company, improved work-family balance and less stress.

Financial Benefits

Ctrip saw financial benefits apart from increased employee productivity and retention. Bloom estimated that the company saved $1,900 per employee on furniture and space.

Sun Microsystems also saved money due to a reduced office footprint. Initial and annual workplace expenses for flexible employees were about 30 percent lower than those in fixed offices. Home-assigned employees’ initial and annual expenses were about 70 percent less than those in fixed offices.

Addressing Potential Drawbacks and Establishing Best Practices

Best Situations for Remote Work

Working from home isn’t for everyone. “Not everybody wants to or is disciplined enough to,” Bloom said. Those with established social lives, such as parents, married workers and older workers, are generally the most interested in remote working. As for the best positions for telecommuting, work that is easier to track is ideal, although there are exceptions.

“The more robotic the work, the greater the benefits, we think,” Bloom said. “More research needs to be done on creative work and teamwork, but the evidence still suggests that with most jobs, a good rule of thumb is to let employees have one to two days a week at home. … At Ctrip, it was a self-selected group, so they were all motivated to work from home effectively, and that’s how it should be. Some people opted out after the nine months were up—and they tended to be the poorest performers of the remote workers.”

How can managers determine who will succeed with remote work? A trial period can help determine whether workers will be able to handle a long-term work-from-home schedule. Bloom recommends taking advantage of natural opportunities such as severe weather for insight into employees’ productivity at home.

Manager and Employee Relationships

According to Bloom, middle management is where most resistance lies for work-from-home arrangements because some managers feel like they won’t have as much control of remote workers. However, most findings indicate that this isn’t the case.

• Management becomes even more critical. “The role of the manager is not diluted in any way just because the team is dispersed,” according to Sun Microsystems. “In fact, studies show that management is even more important to distributed teams. Managers need to be intentional in their management style and proactive as leaders. As such, they set the stage for remote collaboration and model successful behaviors.”
• Workplace relationships largely remain steady. “Telecommuting had no generally detrimental effects on the quality of workplace relationships,” the Journal of Applied Psychology found. Only high-intensity commuting (more than 2.5 days a week) negatively impacted workplace relationships, but the report’s authors say that this can be effectively managed.
• Innovation can improve. A global study found that far-flung virtual teams “were not only productive but also more innovative than face-to-face teams.”

Overall, remote work doesn’t complicate workplace relationships, collaboration, and innovation. If this occurs, it’s likely an indication of the worker’s abilities to function in this sort of arrangement, or it can be due to poor management. Managers have the opportunity to be proactive in making work-from-home arrangements add value to a company. By setting clear expectations for employees, managers can help make this setup an asset for the company.

Balancing Work-from-home and In-house Work

A common concern for managers is how to schedule meetings for workers who telecommute part of the time. Bloom offers two solutions.

“One is to rotate the days at home so that a certain percentage of workers are always in the office,” Bloom said. “That’s the way to go if you’re focused on saving space and reducing your real estate costs. The other option is to schedule mandatory in-the-office days. That way there’s no confusion about when you can access staffers in person. There are pros and cons to each.”

Alternatively, technology can help eliminate traditional meetings. Managers can use video conferencing and instant messaging tools that are easily available online to connect to remote workers. Business leaders in ReadWrite discuss other collaboration methods and technologies that can compensate for a lack of in-person contact.

Creating a Successful Work Environment

Technology is bridging the gap in modern business. It’s now possible, and in some cases beneficial, to have a remote workforce. For some companies, it has become an asset.

It’s hugely beneficial to their well-being, helps you attract talent, and lowers attrition.

Nicholas Bloom, lead author of Ctrip experiment

“It’s hugely beneficial to their well-being, helps you attract talent, and lowers attrition,” Bloom said. “JetBlue allows folks to work as far as three hours from headquarters—close enough to come in now and again but a much bigger radius from which it can draw applicants. When I asked the people at JetBlue about this policy, they said it helped them gain access to educated, high-ability mothers who wanted flexibility in their jobs. The airline believes this policy has improved the quality of its workforce.”

Business leaders can consider remote work arrangements along with other policies to enhance employee productivity and morale. At Rivier University, an online MBA helps graduates obtain other knowledge and skills that can have this type of effect. It offers the understanding needed to navigate the changing business world.

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