Companies that support remote work have seen revenue growth up to four times faster compared to those that are more rigorous about keeping their employees in person, a new study reveals, adding to the debate over remote work. productivity and performance in today’s workspaces.
After analyzing 554 public companies that employ 26.7 million people, it was discovered that “fully flexible” companies, which are either completely remote or that let workers decide when to go to the office, increased its sales by 21% between 2020 and 2022, on a basis adjusted to the sector. This contrasts with the 5% growth of companies with hybrid or completely in-person workforces. The study, prepared by flexible work advisor Scoop Technologies Inc. and Boston Consulting Group, included companies from twenty sectors, ranging from technology to insurance. Revenue growth was normalized against the sector’s average growth rates so that companies in the best-performing areas would not distort the results.
According to the survey, among companies that required at least some office attendance, those that came a couple of days a week had double the sales of those that came to the office all day. According to Rob Sadow, co-founder and CEO of Scoop, the better growth rates of remote companies may be due to their ability to hire faster and from a larger geographic area, as well as better staff retention. For example, at insurer Allstate Corp. (ALL), 84% of its new hires in the United States during 2022 do not live near one of its local offices, and remote jobs received twice as many applications, explains Lauren DeYoung , in charge of overseeing the company’s flexible work arrangements between different departments.
Allowing people to work remotely is good for business revenue growthCompanies that offer more flexible work arrangements outperform others (Source: Scoop Technologies, Bost)
“It is beginning to be a stronger argument for financial directors and CEOs not to spend 5 days in the office,” Sadow said. “People are questioning whether income growth is the best proxy; We could also look at the return for the shareholder. There is no perfect answer, but we consider it to be a step in the right direction.”
The survey is one of the first comprehensive looks at how different work arrangements impact corporate performance. To date, most research comparing remote and office workers has been limited in scope, focusing, for example, on data entry workers in India or call center workers in India. China. Meanwhile, business leaders at companies like Amazon.com Inc. (AMZN) and JPMorgan Chase & Co. (JPM) rarely cite financial data when imploring (or demanding) that workers return to their desks, arguing instead, that in-person work reinforces collaboration and culture. Of the 5,565 companies in Scoop’s database, the proportion requiring full-time office work has fallen to 38% in October from 49% at the start of the year.
However, return-to-office advocates have some new data that bolsters their position. A separate survey of 4,505 full-time American employees at consulting firm Mercer found that those who were in the office four days a week reported the highest levels of motivation and belonging. They were also more likely to recommend their company as a good employer and felt strongly that their career goals could be achieved. However, a similar Mercer survey last year found that those who worked just one day on site were the most engaged.
Mercer senior director Lauren Mason said the results of her company’s latest study surprised her and could be because remote employees feel marginalized within their organization, even if they are satisfied with their work setup. “That’s a theory we have,” she said, adding that such feelings tend to be more prevalent among women, who do flexible work at a higher rate than men. “And it’s not a good thing.”
Among companies that require a certain number of days in the office, only 6% require four days, and most require two or three, according to the Scoop-BCG survey. Previous research by Harvard Business School associate professor Prithwiraj Choudhury found that just one or two days in the office is the ideal setup for hybrid work, giving workers the flexibility they crave without the isolation they need. It means working completely remotely.
A good practice, according to workplace experts, is to give individual teams some autonomy over when and where they work, rather than the CEO imposing a company-wide attendance policy that rarely works for everyone. According to Gallup, teams that establish their hybrid policy together have the highest employee engagement.
“I’m talking to more companies these days that have weakly implemented hybrid guidelines but haven’t yet put together a policy,” said Debbie Lovich, a senior partner at BCG who leads the consulting firm’s workplace efforts. “They are looking for data to know what to do.”
SOURCE: Bloomberg en Línea