Return To Office = Productivity?ByRaymond D. Matkowsky
Before we delve into the subject of “Return to Office” (RTO), I would like to put one myth to rest. Many of us have seen commercials of people “working out of the office”. Many times they are lounging on a beach or by a pool with a laptop. These are advertising scenarios designed to appeal to the fantasies of some viewers. For the most part it is not real life. It is an old technique that can alter the perception of some people. They are usually selling houses, cars, or lottery tickets, not working from home. They do make some managers suspect employee motives though. Since they are not realistic for most people, they should be of little concern to most managers.
A substantial number of remote workers say that being free of office distractions increases productivity. Few employers agree. Employers remain unconvinced despite a large amount of evidence to the contrary. However, a substantial portion of this evidence is conjecture. The questions are why and who is right?
Many of us know that remote work is not new and pre-dates the 2019-20 pandemic. A few days ago, a call was placed to a U.S. based California company’s customer service. The response came from a Philippines based representative. You would not know unless you asked.
What About Productivity?
Does remote work it increase productivity? I do not know since I have not seen any convincing and large amount of definitive data on the subject. Does it harm productivity? Again from what I have seen from data, it does not seem to. A report out found that 78% of managers have experienced no productivity issues with remote workers. A separate Robert Half report states that managers of in-office staff spend 26% of their time with underperforming members. The numbers of low preforming workers are very similar in comparing both reports. There may even be a very slight advantage with the remote group. Regardless, the two reports indicate that there is no substantial difference between the two. Some remote workers go as far as to say that it is a competitive advantage.
Remote Employee Advantages
Remote workers list many advantages that include increased flexibility, better work-life balance and the saving of time. Most commonly mentioned is commuting and child care expenses.
The average person commutes 25 miles one way, five days a week. The cost of this adds up. Not only do you have fuel or the cost of rail or bus passes, insurance rates are calculated on travel distance plus there is normal maintenance. Stay at home workers bypass these costs.
Child care expenses are a huge cost for many families. Child care expenses can run into thousands of dollars per year per child. Remote workers do not have to worry about meeting these pre-school or after school care expenses. They do not have to worry about picking up their children by a certain time. In office workers might have to leave an unfinished job to do so.
Employer Advantages
I Googled “benefits with remote work.” Google came back with a list of twenty-four items. Fourteen of the twenty–four dealt with benefits to the employer.
It appears, that at least from Google’s prospective, that there are more benefits to the employer from remote work than an individual. Some of the benefits were better employee retention, a reduction of office politics, less absenteeism and a recruiting incentive.
A number of items can be classified under cost reductions. This comes in the form of lower utilities, potential taxes, janitorial services, etc. As I have told my customers and mention many times in articles, cost savings go right to your bottom line. Cost savings are pure profit. No expenditures are required to generate that profit.
Not the least of these expenditures is salary. The National Bureau of Economic Research finds that many new hires are presented with 15% to 25% lower salaries than their in office counterparts. Many gen-z hires are willing to take lower salaries in exchange for the life balance possibilities.
Most companies that I am familiar with lease their property. Some own their location outright. Either way you might have extra space now. Depending on the terms of your lease, you might be able to subdivide and sublet the space that use to be occupied by remote workers into a profit center. If you own your location, you do not have to go through a third party.
There is no limit as to how you could put that space (and furniture) good use.
Conclusions
Going back to the original question, there is insufficient evidence to say remote work increases productivity. Maybe a year from now when more information is known, we can draw conclusions. What we do know is that it doesn’t harm productivity. There are many benefits for both the employee and employer.
If you have any comments, let us know. Email me at rdm@datastats.com. We will try to print it in our next newsletter.
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