Allowing employees to work from home (Toughest HR Question)

Is productivity lowered when employees have remote work arrangements?
By Yaseen Hemeda
|Canadian HR Reporter|Last Updated: 05/02/2016

Question:

Our organization has been exploring the option of allowing employees to work from home, but some managers have expressed concerns around lost productivity. To encourage more flexible work arrangements, should we allow employees to work remotely?


Answer:

Lost productivity is a concern for all employers. And there are many factors that impact productivity such as absenteeism, employee dissatisfaction and ineffective management practices. 

There are a few prominent CEOs, HR professionals and even employment lawyers who claim flexible work arrangements are to blame for lost productivity. Unfortunately, even senior HR practitioners make haphazard decisions based on widely held misconceptions.

There is much debate around the issue of remote workers, and employees are constantly finding challenges balancing their personal and work lives, but the majority of these discussions are not based on research. 

HR professionals should embrace evidence-based decision-making when deciding if remote work arrangements hinder or enhance productivity. 

When looking at the overall evidence, studies show productivity actually increases as a result of telecommuting. 

These employees are typically more engaged, log more hours at work each week and, ultimately, are more productive.

A 2014 study by professors at Stanford University and Beijing University entitled “Does Working from Home Work? Evidence from a Chinese Experiment” provides strong evidence that telecommuting benefits both the employer and employee. In association with CTrip, a Chinese travel agency that employs 16,000 people, researchers randomly assigned 250 call centre employees to work from home or the office for a nine-month period. Results showed those selected to work from home were 13 per cent more productive than their office colleagues, spending nine per cent more time on calls and handling four per cent more calls per minute.

In addition, these workers were sick less often, reported increased rates of job satisfaction and turnover was reported to be half that of office workers. And CTrip estimated savings of about $1,900 per employee for the nine-month duration of the experiment.

It is worth noting, however, that the Stanford study found promotion rates for remote workers dropped by 50 per cent. This is why it is important for HR and line managers to have open and candid conversations with employees about the potential drawbacks of telecommuting, while ensuring there is no discrimination as a result of employees seeking such arrangements.

What is interesting is that about 70 per cent of full-time millennial workers would be more satisfied in their jobs if they worked remotely using cloud software, according to a 2014 Conference Board of Canada report. So it is important for HR professionals to understand the needs of the different generations.

Many organizations today are promoting telecommuting as an effective cost-cutting strategy. Lower overhead is realized through savings associated with a mortgage or lease, utilities, janitorial services, office supplies, coffee and water expenses, office equipment, furniture and even transit subsidies. 

Companies that have embraced telecommuting have experienced significant financial savings. Aetna reported it saved US$178 million in real estate costs, while Cisco Systems reported it gained US$195 million in productivity within the first year of adopting its telecommuting policy, according to media reports.

That being said, remote work arrangements aren’t suitable for all organizations and job types. Positions that are customer-facing and require employees to meet with clients on a regular basis would not be suitable for remote work arrangements. 

However, remote work arrangements can be ideal for the vast majority of administrative and creative office tasks.

Establish policies, build culture of trust

It is important to establish written policies and procedures for remote work arrangements. HR should provide training to managers and employees on these policies to ensure requests are handled in a transparent and fair manner.

It may be a good idea to stress that eligibility is only reserved for full-time, permanent employees and not all positions may be suitable for remote work arrangements. 

It is also important to mention management reserves the right to reverse telecommuting arrangements or even deny employee requests if they feel they are unable to maintain operational feasibility and quality standards. 

That being said, managers should be reminded performance is measured by results, not physical presence, and, therefore, should not refuse requests simply because they don’t trust their direct reports.

In fact, the biggest barrier to telecommuting within most organizations is a rampant culture of distrust towards employee actions and behaviours. 

Establishing a culture of trust is the most important factor for a truly successful and healthy employer-employee relationship. 

Organizational trust should not simply be a slogan that is artificially espoused by HR but must be embraced in the actions of line managers. 

Unfortunately, every organization is going to have a few bad apples, but this should not be the reason to justify micromanaging and distrusting employees.

Once a culture of trust has been clearly established, it is important to train and encourage line managers to embrace technological tools that enable meetings to be conducted virtually through WebEx and video conferencing. 

While technology may be intimidating to older generations of workers, young millennials are relying on these types of technologies in their everyday communications, which may impact overall organizational commitment and engagement in their work.

Yaseen Hemeda is a product developer at Carswell in Toronto and co-author of HR Manager’s Guide to Succession Planning. He can be reached at yaseen.hemeda@thomsonreuters.com. For more information, visit www.carswell.com.

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