Some traditional business leaders think of remote work as ineffective and undesirable. However, that perception is becoming outdated and is strongly opposed by mounting research. Plus, employees covet remote work, connecting it to areas like employee happiness, engagement, and loyalty.

Modern employers have recognized the benefits of remote work. Based on the data, more companies are hiring remote workers. Gallup found the number of employees working remotely in some capacity increased 4% from 2012 (39%) to 2016 (43%). Even more noticeable was the number of employees who spent 80% or more of their time working remotely — 24% in 2012 to 31% in 2016.

Increase in working remote graphic 2012-2016

Employers have started to and will continue to embrace flexible work arrangements. Fast Company called remote work “the new normal,” and added that in an UpWork survey of more than 1,000 hiring managers, many of them expected 38% of their full-time staff to work remotely in the next decade. Recognizing how remote work can contribute to higher productivity and a happier workforce can help companies take the next step in their growth.

What Are the Benefits of Hiring Remote Employees?

Research and surveys help illustrate the suite of benefits that remote working offers to employees and their employers. A groundbreaking study from 2015 helps frame some of those advantages. In The Quarterly Journal of Economics, professor Nicholas Bloom and his graduate assistant tracked 255 call center employees at a large Chinese travel website, Ctrip, for nine months to see how they would respond to remote work. Their findings remain a primary source in the literature on modern remote working arrangements.

Productivity

“The results we saw at Ctrip blew me away,” Bloom said in an interview with Harvard Business Review. “Ctrip was thinking that it could save money on space and furniture if people worked from home and that the savings would outweigh the productivity hit it would take when employees left the discipline of the office environment.”

They not only saved money — Ctrip gained the equivalent of an extra workday each week out of people who worked from home. Those employees completed 13.5% more calls than staff in the office. Why did productivity increase? Bloom pointed to two reasons:

  • One-third of it had to do with having a quieter place to work. There’s no denying that prevalent open office environments can cause employees to struggle. Surveys have found that 70% of workers can feel distracted while they’re working in open offices, and a Fast Company article added there’s plenty of backlash against those types of workspaces. In a survey from Bospar PR of 1,000 U.S. workers, 76% said they “hate open offices.”
  • The primary reason for the increase in productivity was that people worked more hours. Remote workers had no commute and used far fewer sick days. The average American’s commute is 26.9 minutes, according to the U.S. Census Bureau. Employees who work from home tend to give some of that time back. Additionally, since remote workers are happier, they’re less likely to engage in absenteeism, or unscheduled work absences. In an Indeed survey of 500 employees and employers, half of all employers said that remote work reduced absenteeism. Fifty-five percent of employees gave reduced absences as a benefit of remote work, which was third on the list of benefits. Fewer sick days was No. 5 at 50%.

Other sources indicate a boost in productivity for remote workers. More than half (57%) of employees in the Indeed survey said they’re more productive when they work from home; 38% said they’re equally productive and only 4% thought they’re less productive at home. Video conferencing provider Owl Labs surveyed 3,000 employers in 23 countries and found that the top reason people chose remote work was for increased productivity/better focus. In a survey of 8,000 employees and employers from telecommunications company Vodafone, 83% of companies saw an increase in productivity as a result of flexible working.

Companies saw an 83% increase in productivity with flexible working

Happiness

Bloom wasn’t at all surprised to see that work-from-home employees in the study were happier. They had much higher job satisfaction and quit at half the rate of workers in the office.

According to Owl Labs, employees work remotely at least once a month are 24% more likely to feel happy and productive in their roles than those who don’t or can’t work remotely. The Indeed survey had a lot of interesting results for the happiness side of remote working. On the list of remote work benefits for employees, three of the top five benefits relate to happiness:

  1. Better work-life balance (75%)
  2. Reduced stress (57%)
  3. Reduced absences (56%)
  4. Improved morale (54%)
  5. Fewer sick days (50%)

Furthermore, employees who work at companies without remote work policies were frustrated. More than half (52%) said they wish they could work from home. And of those people, 37% have considered looking for a job that allows remote work, while 14% are actively searching. Forty percent would take a pay cut for the option. An experiment from the American Economic Review showed the average worker would give up 8% of wages for the option of working from home.

Other Benefits

Ctrip thought it would save money on space and furniture and that those savings were going to outweigh the productivity hit the company anticipated. They were right about one of their projections. Over the nine-month duration of the study, the company estimated that it saved $1,900 per employee.

Company savings per remote employee graphic

Whether it’s due to office space, productivity, or boosts in employee culture, companies can benefit as a result of remote working. In the Vodafone survey, 61% of respondents said their company’s profits increased due to flexible working. It’s worthwhile to note that 58% believed those policies had a positive impact on their organization’s reputation.

Offering remote work policies doesn’t only improve the current workforce; it’s an asset for recruiting. Tech publication Dice Insights asked industry professionals what benefits mattered the most to them, fully expecting health benefits to top the list. However, it tied with remote work, and the two were far ahead of stock options and a better job title.

What to Remember When Hiring Remote Workers

Whether you’re in charge of hiring remote workers or you’re trying to pitch a remote working policy to executives at your company, you’ll need to be careful. The benefits of remote work are powerful, but they’re not for everyone and for every position.

For instance, some people opted out of the Ctrip study after the nine months were over. They didn’t want to or weren’t disciplined enough to work remotely, and as Bloom noted, they tended to be the poorest performers of the group. An article in New Technology, Work and Employment concluded that “while remote working is associated with higher organizational commitment, job satisfaction and job‐related well‐being, these benefits come at the cost of work intensification and a greater inability to switch off.” Some people prefer or need to keep work in the workplace and their personal life at home.

Bloom argued that even with most jobs, employees can benefit from one or two days a week at home. There are positions and personalities that naturally lend to remote work, but it can span younger and older workers, as well as low-income employees and senior executives alike.

The key is putting together policies that make sense in the short- and long-term. For instance, some companies start by allowing current employees to work remotely once they’re at a company for a certain period of time. Probationary periods are helpful as well. Others leave it up to a manager’s discretion.

Developing an effective policy must take those factors into account. Other aspects are important too, such as training, so that managers who oversee remote workers have systems for communication. Navigating those issues isn’t easy, but it’s worth it for many companies who enjoy the ability to recruit talented workers without geographical limitations. You can help lead your company as a prospective leader in HR with an HR degree online. The curriculum, which is guided by the Society for Human Resource Management (SHRM), teaches you relevant skills for working effectively in companies and organizations of all sizes. From the laws governing the workplace to conflict management and more, you’ll gain experience and build a strong foundation to become an HR professional.

Thomas Jefferson University’s fully online program allows you to study flexibly and to maintain your current personal and professional commitments. Experience a world-class education at your fingertips.