16 Sep Study: Remote Work Boosting Employee Productivity up to 13%

The measurement of employee productivity has been widely debated. Some discuss the business concept as a straightforward one. Many educational sources express productivity through the labor productivity equation: total output / total input.

Say, for example, an assembly worker in a small business in the fashion industry was able to manufacture 100 units of shirts, utilizing 25 hours in a week. His weekly productivity would yield 4 shirts per hour. 

This computation appears quite simple in this scenario. However, as businesses have evolved, corporate leaders have observed different factors defining employee productivity, and how these reflect in their companies’ productivity as a whole. 

In today’s employment climate, many businesses prefer not to focus on the number of hours an employee clocks in. HR and global mobility managers rather put more emphasis on accomplished deliverables in measuring an employee’s productivity. By answering the question, “Are employees delivering results,” managers can easily determine which employees are being productive.

Identifying productive employees in this manner can also eliminate the prevalence of employees who pretend to work during working hours. Erin Reid, a professor at Boston University’s Questrom School of Business, discovered in her study that managers couldn’t distinguish between employees who actually utilized the weekly 80 hours of work from those who just put on a show.  

With remote work becoming a common practice, it’s more difficult for employees to pretend to be working when managers aren’t able to physically observe them. This means that leaders in human resources and global mobility are beginning to dismiss the idea of equating longer hours with productivity.  

Another observation business leaders have noticed is the redefinition of work. Forcing companies to adopt a remote workforce has made them realize that work is no longer a place employees go to but it is something they need to do regardless of location. 

In a LinkedIn article, Anna Auerbach, core member of Egon Zehnder’s Tech & Digital, tagged this definition of work as one of 2019’s big ideas in 2018. To add, back in 2014, Scott McCool, CIO of Polycom, stressed the same sentiments in his article, “Work is a thing you do, not a place you go.”

However, in a recent article, Josh Levs, a business consultant, went beyond this definition of work by describing it not just as something you do, but as something you need to accomplish. He explains that rethinking of work this way makes a huge difference for companies that judge solely on effort and time rather than results. 

So now having discussed the definition of productivity and work, what’s the relationship between these two business concepts in today’s context? Does remote work improve productivity?

Stanford case study: Productivity boost in remote work

Many sources have cited a Stanford study to highlight the evidence of a link between remote work and productivity. 

The subject of the experiment is a Chinese travel agency called Ctrip. The senior management of the company considered allowing its call center employees to work from home due to the increasing costs of commercial real estate in its area. 

The proponents of the study were able to gather up volunteers to work with, and divided them into two groups. One group of employees worked from home for 4 days a week with the fifth day in the office while the other group worked in the office for the whole week.

After 9 months, the researchers were astonished with the results. The former group’s work performance increased by 13% where 9% came from the increased number of minutes they worked during working hours and the rest stemmed from the increased number of calls per minute accomplished. The call center employees who worked from home explained that the convenience at home had given them more time to work on their deliverables. 

Additionally, attrition rate shrunk among remote employees, 50% less than the group who worked in the office. These employees also reported better job satisfaction and scored higher psychological attitude scores. 

The successful results led the company to decide to continue remote work with a portion of its workforce indefinitely.

Covid-19’s a different story

Naturally, when businesses see the positive impact of this remote work experiment, they gravitate toward the idea of conducting the same experiment in their organizations as well. 

Whether companies like it or not, the pandemic has forced the “World’s Largest Work-from-home Experiment,” as titled in a Bloomberg article. But most argue that this experiment is thought to be conducted in less than ideal circumstances.

Even Nicholas Bloom, one of the main proponents of Ctrip’s experiment, exclaimed that working from home during these times will create a productivity disaster for many firms. He further explained that besides the pandemic, one difference between Ctrip’s and today’s work-from-home experiments is the fact that employees in Ctrip were only allowed to work from home if they had a designated room for work. 

Unfortunately, Bloom found out that many have been working in their bedrooms and common areas, and are far more susceptible to distractions. He adds that his daughter even distracts him in the middle of work, hoping to find him in a playful mood.

So it’s clear that one of the roadblocks to productivity in today’s work-from-home experiment is not having a designated workplace at home. 

At California Corporate Housing, employees are strong advocates of designating workspaces in their homes, so they can draw the line between work and personal lives.