Even though remote workers are more productive and engaged than in-the-office workers, new research shows that they are promoted 31 percent less frequently than their counterparts working in the office full-time or as hybrid workers. My question: Why pass over more productive and engaged remote workers for promotions? To punish them for working remotely?
We can be smarter.
And don’t be fooled by a recent 2023 Stanford University headline-grabbing finding that remote workers are 10 percent less productive than in-the-office workers, despite mountains of previous studies that have found remote and hybrid workers to be more productive by as much as 22 percent. What gives? Incomplete research is the answer. The researchers did not examine the long-understood cost savings from selling vacant office space and identified companies struggling with easy-to-resolve issues, as you will see, below.
Why not promote equally remote and in-the-office employees?
According to Live Data Technologies, as The Wall Street Journal reported, 5.6 percent of office-based workers and hybrid workers were promoted versus 3.9 percent of those who worked remotely. LDT’s analysis includes two million white-collar workers. Remote workers also received less mentorship, a gap that is especially concerning among women.
It doesn’t have to be this way. When I implemented a flexible work environment in 2012 at Medtronic in Santa Rosa, CA, employees who had the choice to work remotely had a significant concern about being promoted equally as in-office workers. They did not want to be “forgotten with raises, training, and promotions.” We assured them they would not be forgotten and told them we would be transparent about the results. We tracked raises, training attendance, participation in mentoring and coaching programs, and promotions by remote, hybrid, and in-office status, gender and race and saw no statistically significant difference. The employees saw the same thing and didn’t feel ignored. Back then, some of our high-potential employees elected to work remotely. We wanted to continue developing them and retain them.
Are remote and hybrid workers more or less productive than in-the-office workers?
For years, studies have found that remote and hybrid workers are more productive than in-the-office workers. For example, in 2010, Global Workforce Analytics found that companies save $10k to $20k per employee per year by lowering real estate costs, turnover, and absenteeism. And they also benefited from increased productivity.
A study by Standford University in 2015 of 16,000 call center workers over nine months found that working from home increased productivity by 13 percent. This increase in performance was due to more calls per minute attributed to a quieter, more convenient working environment and working more minutes per shift because of fewer breaks and sick days.
At Medtronic, we found similar excellent cost savings, productivity increases, and reduced turnover. We found that remote and hybrid workers worked more hours than in-the-office workers because they worked half the hours of their saved commuting time and took the other half for themselves or to be with their families. In addition, we found that they were 22 percent more productive than in-the-office workers, largely due to avoiding interruptions in the office. (Open office design was always a productivity disaster.)
Best yet, we saved $2 million a year in selling off vacant office real estate and redesigned the remaining office space to make the in-the-office workers more productive, by adding more video-conference meeting rooms, huddle rooms for impromptu discussions (and to keep the office area quiet), and training rooms. Office worker productivity improved by 21 minutes per day, our turnover fell, and it became easier for us to recruit great employees.
Headline-grabbing 2023 Stanford Study
A Stanford Study published in July of 2023 made headlines because it found that remote workers were ten percent less productive than in-the-office workers. However, the authors also found that the productivity of remote and hybrid works depends critically on issues they should have quantified, such as the savings from selling vacant office space and easier recruiting. For me, this was a big oversight. Furthermore, the authors observed that the mode of the work is most important and suggested more research is needed. Below is the primary finding of the Stanford Study:
Fully remote work is associated with about 10 percent lower productivity than fully in-person work. Challenges with communicating remotely, barriers to mentoring, building culture and issues with self-motivation appear to be factors. But fully remote work can generate even larger cost reductions from space savings and global hiring, making it a popular option for firms.
Hybrid working appears to have no impact on productivity but is also popular with firms because it improves employee recruitment and retention.
The challenges to communicating, training and mentoring remotely can be easily overcome by management. More to come below.
When to have remote and hybrid work and how to thoughtfully implement it
Companies should allow remote or hybrid work when it benefits the company’s business model, culture, and bottom line. Remote work should not to be a fad, CEO whim, or employee right.
The goal of CEOS should be to provide their employees with the time, space, and technology to do their jobs wherever it works for the employee, team, and the company’s bottom line. In 2012 with Medtronic, we found that office workers who conducted most of their communications through email, text, phone, and video conference and did their work mainly on the computer could work remotely or hybrid. (We gave them their choice.) About 45 percent of our workforce were able to work remotely.
If their work was tied to a manufacturing line, research and development, or innovation team, or their work was dependent on technology, customer support, or data only available at work, they had to come into the office, lab or manufacturing site. That applied to about 55 percent of our workforce.
We wanted all remote or hybrid workers to come into the office at least one day a week to maintain relationships with colleagues and to keep everyone aligned with the team’s goals, build relationships, and the organization’s culture. On this day we held staff meetings, training, one-on-one meetings, and recognitions. Otherwise, they were more productive at home or at the supplier’s or customer’s site.
Our obligation to employees was to provide the technology, time, and space (when not at home) to do their jobs.
From a team and cultural perspective, we found it essential to have every team set up norms for fast and effective communication, collaborative behavior, and availability. We also worked out data sharing and decision rights. The team’s manager was responsible for establishing these norms with a guidebook we gave them. The result was that teams could meet at a moment’s notice during a crisis, and employees had plenty of time for productive work and collaboration when they were not required in meetings. They physically saw each other weekly and daily on video-conferences.
We frequently required new hires to spend weeks or months in the office, depending on their jobs, to learn their roles from assigned coaches before beginning to work remotely or in a hybrid model.
Thoughtfully implemented remote and hybrid work will improve employee productivity, morale, and engagement and reduce real estate costs and employee turnover. It should not be considered a dying fad from COVID-19, a management whim, or employee right. Nor should remote work be treated by management as a dead-end career choice.
About Victor
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and Managing Partner of InnovationOne, LLC. He works with organizations to transform HR and recruiting, implement remote work, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: The Best of Empirical Research, Method and Process, and Digitization. He is quoted in business journals such as The Wall Street Journal, Workforce Management, and CEO Magazine. Victor has partnered with The Conference Board on innovation research. Subscribe to his weekly blogs at http://www.VictorHRConsultant.com
To learn more about implementing or improving remote or hybrid work, I invite you to go to my website and read, “Form Follows Function: Telework and tailored office design improve productivity, employee engagement and your ability to recruit and retain employees!”