Remote working is good for productivity, so why don’t bosses believe the data?

As demand for remote and hybrid working grows, managers need to be retrained to stop focusing on employee presence and learn to trust the actual data
In China, remote work can help address the pernicious 996 culture and counter the burnout that leads to young people ‘lying flat’

Gleb Tsipursky

Published: 11:15am, 4 Sep, 2022

Why you can trust SCMP

Do bosses trust employees to be productive when working remotely? Not according to a Citrix survey of 900 business leaders and 1,800 knowledge workers – those who can do their job remotely.

Half of all business leaders believe that, when employees are working “out of sight”, they don’t work as hard. Yet this belief contradicts the facts.

Already, before Covid-19, we had peer-reviewed research showing that remote work improved productivity at Ctrip, a 16,000-employee, Nasdaq-listed Chinese travel agency. It randomly assigned call centre employees to work from home or the office. Working from home resulted in a 13 per cent performance increase and a 50 per cent lower attrition rate.

A more recent study from the Covid-19 era with random assignment of employees either to fully office-centric work or to some days worked remotely by Trip.com, China’s largest travel company, found that the hybrid workers had 35 per cent less attrition and that lines of code written increased by 8 per cent.

A study using employee monitoring software confirmed that the shift to remote work during the pandemic improved productivity by 5 per cent. More recent research from Stanford University showed that remote work efficiency increased throughout the pandemic, with workers reporting 5 per cent greater efficiency from home than in the office in May 2020, rising to 9 per cent in May this year. That’s because we learned how to be better at remote working.

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And, really, are workers all that productive in the office? Studies show that in-office employees actually only work between about a third and 40 per cent of the time, and spend the rest of the time on non-work activities such as surfing the web.

So why do half of all business leaders ignore the data? The key lies in how they evaluate performance: based on what they can see.

Unfortunately, leaders are trained to evaluate employees based on “ facetime”. Those who come in early and leave late are perceived to be, and assessed as, more productive.

Even before the pandemic, the focus on presence in the office undermined effective remote working arrangements. Thus, researchers found that remote employees who work just as hard and just as long as those in the office in similar jobs may end up getting lower performance evaluations, smaller pay rises and fewer promotions.

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The problem here is proximity bias, which in this case describes how managers have an unfair preference for and higher ratings of employees who go into the office, compared with those who work remotely, even if the remote workers show higher productivity.

In North America and Europe, the consequence of this bias means employees are being forced to return to office-centric work by those leaders who falsely believe remote workers are not as productive. Many employees – including top executives at companies such as Apple – are resigning because of this forced return, and such irrational perceptions will continue to cause companies to lose workers.

A Society for Human Resource Management survey last June found that 48 per cent of respondents will “definitely” seek a full-time remote position in their next job. To get them to stay at a hybrid job with a 30-minute commute, employers would have to offer a 10 per cent pay rise and, for a full-time job with the same commute, a 20 per cent pay rise.

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Given the significant likelihood that we are heading for a recession, which will limit the ability of employers to offer pay rises and lead to a focus on productivity over gut-based intuition, we can expect a greater shift to more hybrid and remote work.

In China and other Asia-Pacific countries, employee demand for hybrid and remote work is also prevalent, if weaker than in North America and Europe. A survey of Asia-Pacific human resource professionals found that 45 per cent of Chinese enterprises were implementing work-from-home opportunities, higher than the 41 per cent in the Asia-Pacific region.

Remote work may help address the pernicious 996 work culture that is still found in some Chinese enterprises, and counter the burnout that leads to the “lying flat” trend among younger Chinese workers.

To succeed in an increasingly hybrid and remote future will require retraining managers to address the proximity bias and evaluate performance based on productivity. Companies will have to teach them to trust the data over their gut feeling.

Dr Gleb Tsipursky is CEO of Disaster Avoidance Experts, and author of Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage