The COVID-19 pandemic has significantly impacted the way businesses can operate. Companies have been forced to examine and implement remote working for the safety of their staff and customers.

Transitioning to remote work during a global crisis is hard.

Your team is under more stress than ever. They’re worried about their safety, concerned about layoffs, and some are trying to work remotely while their kids are attempting distance learning. It’s totally reasonable to expect productivity to drop under the circumstances.

That doesn’t mean that remote work is less productive, though. In fact, many companies have found that their team gets more done when they work from home, even during the pandemic.

Businesses who never offered remote work before are now embracing it. In our recent State of Remote Work survey, we found that 84.5% of companies intend to continue offering some remote work options after the pandemic. Some, like Twitter, have even instituted a permanent remote working policy.

Why are so many companies staying remote even after they could reopen their offices?

We’ve done the research. Remote work affects employees’ productivity, well-being, and happiness, and it can be great for a company’s bottom line.

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Defining productivity

Productivity is simply how efficient you are at completing tasks. It’s directly tied to effectiveness, which, in turn, can be defined as “the capability of producing a desired result.”

However, while an employee can be effective at completing a certain task, that doesn’t necessarily mean they’re productive. Being productive means staying focused and motivated. It’s getting things done quickly and producing a high quality result.

Define what productivity means for your team.

When looking at individual employee performance, think about why you hired for that position in the first place.

A developer might be considered productive if they write a certain amount of clean code, or you might look at whether or not they ship products on time. For a support agent, you’ll probably be more concerned with completed help tickets and positive feedback from customers.

The productivity benchmarks you measure for your team depend on what you need to get done. It’s all about what moves the needle for your business.

Accurately measuring your remote team’s productivity is important because it’s harder to spot potential problems when you don’t see your team face-to-face.

Using a productivity tracking tool can help you spot warning signs of burnout so you can offer help earlier. You can also see which projects are going well, where there might be problem spots, and who has room to take on more tasks.

Everyone should know how their productivity will be measured and judged. Here’s a short list of productivity metrics you might want to measure:

The rate that tasks are completed on time

The number of tasks that are completed

Quality ratings on completed work

Feedback from customers

Activity levels during work hours

Availability during work hours

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We’ve examined eight different factors related to workers’ productivity. Here’s what we found:

From performance to engagement, all studies show that remote workers are indeed more productive than their in-office counterparts.

Why remote workers are more productive

Studies repeatedly prove that remote employees get more done. They perform better, get work done faster, and take less sick time.

Employees also love remote work. Remote teams are happier, and people who regularly work from home report higher job satisfaction. That leads to higher engagement and better productivity.

It sounds great, doesn’t it? Let’s break down the research.

1: Remote teams perform better

Let’s start with the hard facts about productivity – employee performance. After all, performance is one of the most crucial productivity metrics.

One of the most commonly cited studies on remote worker performance was conducted by Stanford University professor Nicholas Bloom and other scholars in 2013. The Work From Home (WFH) experiment was done at CTrip, a NASDAQ-listed Chinese travel company.

16,000 call center employees volunteered for it. The 9-month study showed a 13% performance increase.

Working more time per shift, meaning fewer sick leaves and breaks, accounted for 9% of the increase. Another 4% was because employees took more calls per shift. It was easier for call center employees to focus because the home environment was quieter and less distracting.

A different US-based study showed a 35% increase in employee productivity. When Best Buy introduced a flexible work program for its employees, performance jumped dramatically.

Remote teams can feel the difference. 65% of workers report that they feel more productive when not in the office. Out of those employees who say they’re more productive when working remotely, 86% rate their productivity as being either good or excellent.

A ConnectSolutions remote working report found that reducing work distractions is good for productivity. Remote work helps eliminate workplace distractions like background noise and interruptions from coworkers.

Remote workers confirm this themselves, with 76% claiming that they’re more productive when working remotely because they experience fewer distractions, and 62% attributing their productivity to a less noisy work environment.

This makes a lot of sense. By empowering people to control their own work environment, everyone can create their own ideal work situation. For example, some people listen to music to improve focus, while others find it distracting. Some employees are energized when the office is busy, and some do their best work in peace and quiet.

In the ConnectSolutions survey, 30% of the respondents said that working away from the cubicle allows them to achieve more in fewer hours. Another 24% said they accomplish more in the same amount of time.

Overall, 77% of remote workers in that survey reported higher productivity. Employees are more effective when they have some flexibility in their work arrangements.

Businesses confirm this: 85% say that flexible remote policies have improved their overall productivity.

It’s also important to note that while remote workers can work from anywhere, 84% of them prefer working from home. Coworking spaces and coffee shops are other popular places for remote employees to spend their hours, but the vast majority like to work at home.

2: Remote teams take less sick leave

While working from home, employees take fewer breaks. They also stay healthier and take less sick leave.

When remote workers do get sick, they’re more likely to work anyway since they don’t have to worry about passing along germs to their coworkers. Most importantly, working remotely allows people to take better care of themselves. They can sleep a little later and adjust their work schedule to allow time for healthy activities.

In fact, 89% of employees believe that a flexible job would help them take better care of themselves, and 77% think it would help them be healthier in general by allowing them to eat better or exercise more.

Remote work is appealing for mental health reasons, too. 84% of employees say the increased flexibility would allow them to manage their mental health better, and 86% expect that remote work would help reduce stress.

Additionally, 88% of people who had to take a break from work due to difficult personal circumstances (such as going through a divorce or experiencing the death of a family member) report that they would have been able to keep working if their job offered more flexibility.

Eliminating the daily commute is another major draw.

The average one-way commute in the US is 26 minutes long, which means that the average employee spends 52 minutes of their day driving to and from work. That’s 200 hours per year.

Eliminating commutes helps to reduce health risks associated with commuting, such as high blood sugar, high cholesterol, increased blood pressure, and anxiety.

3: Remote teams log more hours

Gallup’s study, State of the American Workplace, found that remote employees log four extra hours every week. This was confirmed in a study of AT&T workers who worked five hours more per week when working from home.

Another survey calculated that remote workers put in an extra 1.4 days more every month compared to office workers.

The time adds up because remote employees are willing to work longer hours and less likely to take time off.

Because of the flexibility that working from a distance allows, employees are also more likely to spread their work throughout the day in different ways. They’re more likely to work before and after business hours.

Ryan Robinson, a content marketer that works 100% remotely, agrees. He shares:

“Being fully remote with my clients gives me the permission to work during my peak hours of the day—which tend to be extremely early. The hours from 5:00am – 11:00am are when I get my best work done, and in previous jobs that time would often go to waste simply because it wasn’t the norm. Choosing to start freelancing and work with clients in a capacity that allows for a more flexible work schedule has been one of the best decisions I’ve made for the quality of my own output.”

4: Engagement is higher in remote teams

Highly engaged employees are motivated to do their best work. They care about the success of their company, and they feel like they can contribute to their team.

On the other hand, disengagement at work is a global problem. When employees feel disconnected or even negative about their jobs, that attitude is contagious. Productivity stalls and the work environment can become toxic.

Fortunately, flexible work arrangements can help address disengagement.

That Gallup study we mentioned earlier also found that remote workers are more engaged with their work than office employees – 32% against 28%.

Some of the reasons pointed out by Harvard Business Review include the fact that proximity does not always lead to quality conversations. Plus, when people are absent from the office, they put more effort into reconnecting with coworkers when they return.

Remote employees are more engaged because they like their jobs more.

According to Leadership IQ, 45% of remote workers love their job, compared to 24% of office workers. That’s a pretty big difference.

5: Collaboration is better between remote employees

Employers often cite collaboration as the main reason not to allow employees to work remotely. However, statistics show that working remotely can actually improve communication and collaboration.

A total of 81% of remote workers state that their communication with colleagues is good or excellent. Only a small amount — less than 3% — consider their communication poor.

Additionally, 54% of people with flexible work arrangements still want to keep communicating and networking with their colleagues even when not in the office.

Plus, one of the main distractions in the workplace is random conversations with coworkers. Many workers minimize these distractions by communicating via email or instant messaging, even when together in the office.

6: Remote employees are more loyal

On average, it costs $4,129 for a company to hire an employee. Since hiring is so expensive, companies want their people to stay as long as possible. Reducing employee turnover is important for the bottom line.

Offering remote work, even on a part time basis, is a great way to improve satisfaction and retention. Remote employees are 13% more likely to stay at their current job compared to on-site employees.

That’s why companies that allow employees to work remotely have a 25% lower employee turnover rate.

Additionally, 76% of workers state that they would be more loyal to their company if it offered flexible work options. 74% of them claim they would quit their job to go work for a company that allows them to work remotely.

In another study, employee turnover dropped by 50% when employees were allowed to work from home. More than half (54%) of office workers claim that they would leave their job if they were offered one with flexible work options.

Additionally, 99% of people state that they’d like to work remotely at least some of the time for the rest of their careers.

This is more than a passing preference. Almost a third of employees would even take up to a 20% pay cut to be able to work remotely, while 22% would forfeit vacation time. 52% of office workers have even attempted to negotiate a flexible work arrangement with their employer.

Companies that don’t offer at least some flexibility to work from home have more trouble keeping people on board and committed. 62% of employees have left or considered leaving their job because it lacked flexibility in where and when they work. 79% stated that they would be more loyal to their company if it offered flexible work options.

7: Remote employees are happier and healthier

Let’s take a closer look at job satisfaction and personal happiness. Happier employees are more productive, but that’s not your only consideration. Happiness and wellbeing are important on their own.

Remote work promotes a healthier work-life balance. Employees love skipping the commute, wearing comfortable clothes, and controlling their work environment. It’s easier to spend time with family, and eating lunch at home is good for their wallet and their health. Even extroverts who love social office spaces enjoy having the flexibility to work from home sometimes.

71% of remote workers state that they’re happy at their job, compared to 55% of on-site workers. Additionally, 45% of on-site workers claim that having a job that offered work flexibility would significantly improve their overall quality of life.

Employees who work remotely at least once per month are 24% more likely to report being happy in their roles compared to those that don’t work remotely.

Remote workers have more freedom of choice. Having greater control over their professional life leads to surprising health benefits for these employees. They report lower stress levels and better sleeping habits.

The results are clear. 44% of remote employees report having a more positive attitude when working remotely, while 53% claim they experience less stress. 81% of remote workers state that working remotely also allows them to achieve better work-life balance.

Remote workers are so happy with working remotely that 95% of them recommend it to others. They’re also more likely to recommend their company to other people, so you get a recruiting boost on top of better retention.

Remote work is good for your bottom line

Obviously, remote work is great for your employees, and you can enjoy huge productivity gains by embracing a more flexible policy.

Now, let’s talk business.

Cisco completed a study and found they save $277 million per year from telecommuting employees. Global Workplace Analytics found that businesses save $11,000 every year for each person who works remotely at least half the time.

If 50% of the U.S. workforce went remote, companies would save more than $700 billion per year.

The biggest savings come from real estate costs. Even having just a few employees work from home allows you to rent a smaller office space. That means lower rent, lower utilities, fewer supplies, and lower cleaning costs.

As we’ve all seen during the pandemic, remote work keeps businesses open when the office has to close.

Construction, building closures, and bad weather can mean that your team isn’t able to report for work. If your team is equipped to work from home, that’s not as much of a problem. For example, working from home saved the US federal government $32 million during four official snow days in 2014.

Convinced that remote work is the way to go?

Are remote employees really more productive? The data says yes.

If you’re working remotely for the first time — or if you just want to be more productive — subscribe to this blog for more strategies and tips to get the most out of your remote team.

This post was originally published 7/25/2016 and was updated with new research on 8/31/2020.