If done right, remote working can be very good for business
With the festive season upon us, employers prepare themselves for work from home requests by employees who want to be at home with their families for Christmas.
The holiday season causes a more noticeable spike, however the overall trend for remote working has been moving upwards in recent years. Since 2007, there has been a 159% rise in remote working in the US and by 2020 it is estimated that 50% of the UK workforce will work remotely.
The Best Place to Work institute recently published it’s annual report on the World’s Best Workplaces 2019 A close examination of the top ranked companies reveal that 60% of them actively implement remote working policies in their organization.
60% of top 20 companies listed in the annual World’s Best Workplaces list have an active remote working policy
Following a shortage of talent and interest from employees, emerging tech is the next biggest driver of remote working in the workplace. Could the increase in digitization be driving a feel of office presence irrelevance amongst employees? Is the demand for remote working driving the innovation in collaboration technology?
The rise of productivity tools and people analytics platforms like Microsoft Teams and Workplace Analytics, Slack and Isaak by StatusToday promise to make managing remote teams simpler and more transparent.
From Salesforce to Hilton, we examine the best workplaces in the world and establish key benefits of remote work for employees and organizations while debunking popular myths on the way.
Companies can access an ever expanding talent pool
Due to convenience and ease of hire, employers often end up filling open positions within their city limits. This excludes thousands of qualified remote applicants who would otherwise be a good fit for the role. Sometimes the most qualified and hardworking candidate for the job is someone who is homebound by family responsibility or visa restrictions.
Remote working expands the talent pool
American Express embraced remote working with the belief that expanding their talent pool globally is what helped them deliver a better service and become a better brand.
Access to talent has become a major bottleneck for progress amongst high growth companies. Remote workers have the potential to decrease that inconvenience.
Enhanced flexibility increases retention
One of the most underestimated cost that all businesses endure is Employee Turnover. Businesses currently spend about one-fifth of an employee’s annual salary to find a suitable replacement. With remote work being one of the more sought after perks amongst employees of all age, the case for enhancing these policies to reduce turnover costs is quite strong.
Despite the retention benefit, remote work isn’t as commonly practiced amongst the employers globally. For companies like Cisco or Vodafone, that have taken the progressive measure to adopt these policies, an increase in retention combined with a visible boost to employer brand is evident through a quick look at their ratings and employee reviews.
Remote work increases productivity
Contrary to popular belief, home workers are not more vulnerable to distractions compared to their office counterparts. It is in fact the office that homes disturbance from colleagues, random drop ins, noisy colleagues, etc. A recent article about bad management practices, shared that the average worker loses 20% of daily activity to interruptions and office noise.
A 2-year case study by Stanford professor Nicholas Bloom with Ctrip (China’s largest travel agency), exhibits just how efficient working from home is. Ctrip noticed a 14% rise in productivity and an increase in actual hours worked amongst the remote study group. Thanks to such impressive results, Ctrip implemented remote working policies across the entire company.
Operational costs and absenteeism decrease to enhance profits
A geographically diverse workforce brings with it a geographically diverse salary. When hiring virtually you are no longer bound by your region’s average pay. For instance, thanks to a lower cost of living, the standard salary for a software engineer in Warsaw will be considerably lower than one in London.
Besides the immediate cost savings from maintaining a larger office space, remote work also benefits from enhanced revenue generated through increased productivity. All the collective hours lost with sick days, late starts and office distractions add up to a surprising dent in company revenue. In Nicholas Bloom’s 2-year study, companies reported an annual increase of $2000 in profit per remote working employee.
BONUS: Working remotely is really good for the planet
Remote work has an immediate impact on the transport congestion in big metropolitan cities like London, New York or San Francisco. With the costs of congestion costing cities like London as much as £9.5 billion, it’s no surprise that more cities are offering programmes and grants to incentivize remote work. The city of Tulsa offers a tempting $10,000 cash and a discounted rent to all eligible workers who transition out of traditional office setups.
While these benefits present a strong case for companies to embrace remote work, there are still other practical aspects to consider. A remote working policy needs to be suitable complemented with technology enablement. Companies need smart communication tools and productivity analytics to ensure that employees can stay efficient. Displacing traditional emails, modern communication platforms are great for brainstorming sessions and questions that require rapid responses. Workplace and people analytics tools provide further insight into the workforce to help manage staff wellbeing and collaboration trends.
The case study by Nicholas Bloom, while well controlled and extensive, could be biased to its city’s culture, which in this case is Shanghai. Would the same result be produced if the study took place in Paris?
Remote working is the future, but it faces significant problems in the present. In recent years, several large companies like IBM, Best Buy and Yahoo banned working from home entirely while others are in active consideration.
Let’s dive deeper into the problems facing modern day remote workers in the upcoming article.
(Shout out to Dylan Fernando for assisting with the content and research for this article)