Companies that let their workers decide where and when to do their jobs—whether in another city or in the middle of the night—increase employee productivity, reduce turnover, and lower organizational costs, new research suggests.
Prithwiraj Choudhury, an associate professor in the Technology and Operations Management Unit at Harvard Business School, and fellow researchers compared the outcomes of flexible work arrangements at the US Patent and Trademark Office (USPTO). The team found that employees with liberal “work from anywhere” arrangements, similar to those offered at Akamai, NASA, and Github, among others, were 4.4 percent more productive than those following a more traditional “work-from-home” policy that gives schedule flexibility but requires workers to live near the office.
“While prior academic research has studied productivity effects of ‘working from home’ that gives workers temporal flexibility, ‘work from anywhere’ goes a step further and provides both temporal and geographic flexibility,” says Choudhury, who co-authored the paper, (Live and) Work from Anywhere: Geographic Flexibility and Productivity Effects at the United States Patent Office, with HBS doctoral student Cirrus Foroughi and Barbara Larson, executive professor of management at Northeastern University.
While digital technology has made workers more efficient and accessible than ever before, many companies have been slow to let employees work from home regularly, let alone from anywhere at any time. The study’s findings can help firms understand the effects of various flex-work options, and support certain types of employees as they negotiate with employers. Choudhury says the results have important implications for workers, who could potentially move to lower-cost areas, reduce commuting costs, and live closer to family and friends.
Working from home has gone from a niche perk to a standard practice thanks to recent world events. With companies across all industries adopting remote policies it’s clear that work from home is here to stay.
For employers, there are many benefits to having team members work remotely. It can save money, attract top talent, and lead to higher productivity and job satisfaction. As virtual and hybrid arrangements become the norm, organizations that support work from home are gaining key advantages over those requiring on-site work.
In this comprehensive guide. we will explore the top eight ways work from home benefits employers and organizations
- Increased cost-efficiency
- Higher productivity
- Greater employee satisfaction
- Reduced absenteeism
- Access to a wider talent pool
- Better talent retention
- Enhanced corporate social responsibility
- Improved competitiveness
Let’s look at each of these remote work advantages in more detail.
1. Increased Cost-Efficiency
Having employees work from home can result in major cost savings for businesses
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Reduced office space needs – Less space is required when employees work remotely. This cuts costs spent on rent, utilities, and office upkeep.
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Lower equipment costs – Remote employees use their own devices and furniture, reducing expenses on hardware, tools, and office supplies.
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Reduced overhead – With fewer employees on site, overhead costs like snacks, programs, and on-site services are minimized.
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Lower absenteeism – Remote workers take less sick days and other unplanned absences. This avoids wasted productivity and the expense of covering shifts.
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Increased retention – As we’ll explore later, remote work improves employee retention. Turnover is extremely costly, so reducing it through work from home policies saves companies money.
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Tax incentives – Some states and cities offer tax breaks to companies with remote workers. Employers can take advantage of these incentives.
Altogether, studies show businesses can lower costs by up to $11,000 per half-time telecommuter per year. For larger teams, the savings add up through reduced real estate and operational costs.
2. Increased Productivity
Contrary to old assumptions that remote workers are lazy or distracted at home, statistics show the opposite is true:
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A Stanford study found remote workers were 13% more productive on average. They also took shorter breaks and sick days.
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Employees report higher productivity when working from home in 66% of cases, according to a survey by Airtasker.
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Companies with remote work opportunities have 25% lower employee turnover, according to an Owl Labs report. This improves continuity on teams.
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Remote workers have fewer interruptions from co-workers and can focus deeply on tasks. This enables higher productivity.
Higher productivity results from a combination of quieter working conditions, flexible schedules, improved morale, and optimized workflows. Employees can work when and where they are most productive.
3. Greater Employee Satisfaction
Surveys consistently show the ability to work remotely ranks among the top benefits employees value most today. Compared to commuting and working on-site, remote work offers advantages such as:
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Flexibility – Employees can more easily balance work and personal needs when working from home.
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Improved focus – The quiet, private home office minimizes distractions and conversations that disrupt work.
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Avoiding commutes – Eliminating travel time enables workers to sleep later and have more time for family and hobbies.
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Comfort – Working in casual clothes and a personalized workspace is preferable for some employees.
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Healthier lifestyles – Remote workers tend to eat better, exercise more, and feel less stress when avoiding office life.
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Inclusive options – Remote work enables some groups like caregivers and disabled individuals to participate equally in the workforce.
These factors result in much higher job satisfaction for remote employees. Satisfied team members are more engaged, motivated, and committed to their roles.
4. Reduced Absenteeism
Employees working remotely take less time off. Statistics show:
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IBM saw absenteeism drop by 59% when remote. Employees returned to work sooner after illnesses as well.
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Workers with long commutes have higher absenteeism. Remote work eliminates commute time and related absences.
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Parents working from home take up to 20% less time off for family reasons.
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Remote workers avoid “churn and burn,” allowing for fewer mental health and sick days.
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With flexible schedules, remote team members can more easily attend appointments without missing work time.
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Remote workers avoid illnesses spread through an on-site workforce.
Reduced absenteeism means projects stay on track. Less time is lost waiting for team members to return or covering missed shifts.
5. Greater Pool of Applicants
Top talent increasingly expects employers to offer remote working options. Without this benefit, businesses miss out on many qualified applicants.
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73% of surveyed millennials said having remote work options would make an employer more attractive, per FlexJobs.
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54% of job seekers say they would turn down a job that didn’t offer work from home, according to an Owl Labs report. That amounts to top applicants your business could miss.
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You can recruit outside your geographic area and hire the best employees for the job. Location matters far less when teams work remotely.
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Remote opportunities also expand hiring options for roles requiring niche skills, since location is no longer limiting.
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Remote work makes companies more accessible to talented groups like caregivers, disabled individuals, military spouses, and others who cannot easily commute or relocate.
Taking advantage of today’s distributed workforce gives employers access to the widest, most skilled talent pools possible in any industry.
6. Better Talent Retention
Some of the same factors that make employees happier and more satisfied also encourage them to stay in their roles longer. Key statistics on remote work and retention include:
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80% of workers say they would turn down a job that didn’t allow remote work, per a 2021 survey. Employees will leave companies that don’t support work from home.
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54% of employees say they would look for another job if required to be in the office full time.
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Employers offering work from home options have 25% lower average turnover rates.
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It costs 33% of an employee’s salary to replace them. Reducing turnover through remote work saves companies this expense.
Being able to work remotely results in improved employee retention across industries. Talent is very unlikely to leave a job solely because of remote work options. Supporting work from home demonstrates that businesses value and trust their team members.
7. Enhanced Corporate Social Responsibility
Allowing remote and flexible work models is attractive to today’s workforce and customers because it supports larger social responsibility initiatives such as:
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Work/life balance – Remote work allows employees more family time and flexibility for their personal needs.
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Sustainability – Remote work eliminates employee commutes and reduces a company’s environmental impact.
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Accessibility and inclusion – Remote jobs enable wider participation in the workforce, as location and mobility are less limiting.
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Mental health – Avoiding rigid office policies and commutes helps decrease employee stress and burnout.
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COVID-19 safety – Remote work enables social distancing and reduces virus transmission risks.
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Affordable housing – Companies hiring remote workers ease demand for local housing in pricey areas like Silicon Valley.
Clear corporate social responsibility advantages exist around remote work policies. They demonstrate a commitment to employees and communities.
8. Improved Competitiveness
The cost and productivity benefits of work from home make companies more efficient and competitive. Other advantages include:
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Access to top talent – As covered earlier, remote hiring provides the widest pool of qualified candidates.
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Continuity and adaptability – Remote teams stay productive during events like COVID-19 which halt on-site work.
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Better customer experiences – With remote employees located across time zones, customer service is improved.
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Top-tier employer branding – Companies known for leading with remote work opportunities attract the best applicants.
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Innovation – Remote work propels development of new communication tools and engagement strategies.
Early adopters of work from home are already realizing noticeable advantages. However, these benefits will be even more pronounced moving forward as remote and hybrid work become standardized across entire industries.
Key Takeaways
The case for remote work is stronger than ever from an employer perspective. Leading companies recognize work from home is beneficial for their bottom line along with employee satisfaction and retention.
Specific advantages range from cost reductions and productivity gains to wider talent pools and continuity. Supporting work from home elevates businesses through improved efficiency, adaptability, and competitiveness.
In the modern era, organizations that do not offer work from home options will face major disadvantages recruiting, retaining, and managing top talent. The benefits are simply too great in today’s distributed digital world.
By embracing the remote work revolution, progressive employers are positioning themselves to excel in the emerging hybrid workforce model. Work from home is no longer an edge case – it is quickly becoming the default employment arrangement companies must get comfortable with to succeed.
Isolating the benefits of remote work
To study the productivity effects of work-from-anywhere policies, Choudhury looked for a setting that would allow the researchers to isolate productivity changes among workers with similar job functions under different remote-work conditions. The USPTO provided the perfect opportunity.
Seeking to increase efficiency, the agency implemented the Telework Enhancement Act Pilot Program (TEAPP) in 2012. The program transitioned patent examiners to a work-from-anywhere policy over 24 months, shifting new examiners each month based on union-negotiated quotas. This implementation process enabled Choudhury and his co-authors to avoid what is known as the selection problem in social science research.
“The concern is that there is some underlying characteristic of people that is driving whether one wants to become a remote worker, and that characteristic is also correlated to productivity,” explains Choudhury.
Prior to TEAPP, examiners could work from home as long as they were within 50 miles of the USPTO headquarters in Alexandria, Virginia, but they had to report to the office once a week. The agency eventually allowed them to work beyond 50 miles away, but still required weekly trips to the office. TEAPP provided full autonomy.
Choudhury and his coauthors compared 600 examiners’ productivity under these various conditions. While working remotely, productivity increased among all examiners and continued to rise with each step toward the full work-from-anywhere policy, the researchers found. Productivity increased 4.4 percent when employees moved from working at home on a limited basis to the location of their choice. Based on a patents average value, this productivity gain could add $1.3 billion of value to the US economy each year, the researchers estimate.
Many of the examiners also benefited financially by bringing their Greater Washington, DC, salaries to less costly regions, effectively increasing their real incomes. Early- and mid-career workers tended to choose locations based on future career considerations, while workers with longer tenures flocked to “retirement-friendly” destinations, such as Florida.
Work from anywhere isn’t for everyone
To put their findings in perspective and offer a framework for future research, the researchers emphasized the nature of a patent examiner’s work, which requires little coordination with co-workers on a daily basis. Examiners perform their work independently, adhering to the same best practices of patent searches—a style of work that prior research has termed “pooled interdependence.” Choudhury stresses that the research results apply only to companies or units that employ this type of worker.
“For the vast majority of such employers, remote work is a win-win, because the employee can move to a location of choice and save money in cost of living, and the employer will see higher productivity and lower attrition, and save on real estate costs,” says Choudhury.
Choudhury and his fellow researchers contrast pooled interdependence with “reciprocal interdependence,” which requires continued interaction between co-workers, and “sequential interdependence,” which involves a series of tasks performed by different employees.
The Benefits of Employees Working from Home Productively
What are the benefits of work from home?
Things like lower overhead costs, improved employee morale and higher productivity are just a few of the reasons employers choose a work-from-home setup. In this article, we explore even more benefits of work from home for employers. Related: 20 In-Demand Work-From-Home Jobs Why is it important to let employees work from home?
What are the benefits of a work-from-home job?
While there are plenty of reasons employees benefit from a work-from-home job, employers can enjoy many similar benefits too. When employees are more satisfied with their roles and working situation, companies can become more profitable and productive. Here is a more in-depth look at the many benefits of work from home for employers:
Why should employees work from home?
Employees may also feel happy about the money they save not paying for gas money, frequent oil changes, parking fees, business attire and team lunches. Both employers and their employees can save quite a bit of time working from home. Getting ready for work each morning can take a couple of hours.
Is working from home a good idea for your business?
You may find that you’re happier and healthier when you work from home. Taking a strategic approach to running a remote company helps your business maximize the benefits of working from home. Here are some tips to help: Create a remote work policy: Having a remote work policy ensures your employees understand your expectations.
