Does working remotely damage a company’s productivity? It doesn’t have to, experts say, despite a recent report claiming otherwise.
A McKinsey & Co. executive summary analysis released recently that seeks to help businesses rebound quickly from the major economic downturn caused by the COVID-19 pandemic noted that the consultancy’s productivity decay data shows a dramatic slide as the number of a company’s work sites increase.
The report showed that a 100% company productivity index number when operations are concentrated at one location slid to 76% when work is split between two sites and to 48% when its divided into six different locations. The report said the “lack of clarity in roles and responsibilities, decision rights and objectives” from workers being physically isolated from other team members was a key reason for the productivity drop.
“[The] sense of lack of direction/isolation can degrade morale and performance,” the report stated.
But that doesn’t have to be the case.
Julien Picault, an economics and political science professor at the University of British Columbia’s (UBC) Okanagan campus, said there have been many research reports done that show productivity improvements – as well as reduced managerial and infrastructure costs – for companies that have carefully planned and introduced models for tele-working.
The key phrase there, however, is “carefully planned,” noted Picault, who counts industrial organization among his expertise. The difference in the case of COVID-19 is that social-distancing enforcement came quickly after the World Health Organization’s mid-March determination that the outbreak was a global pandemic.
Many companies, therefore, were unprepared to institute remote working models for their employees and executives and were forced to adapt quickly to health requirements.
“For some companies, this transition happened over a weekend,” Picault said. “Therefore, most companies and corporations should not expect the positive impacts to occur immediately.”
According to the McKinsey report, working remotely can expose issues beyond workplace psychology, including problems with technology and the overall work process. But the biggest factor is that isolation creates stress, and that reduces productivity and team cohesion. In these cases, the report said, it is key for an executive to exert an “increased role in providing direction, energizing the team and connecting the dots.”
It added that work culture needs to be the main focus, because it has been a proven driver in remote-work situations.
There is another company culture issue that the isolation of working from home creates, said Marc-David Seidel, professor of entrepreneurship at UBC’s Sauder School of Business and associate editor of Administrative Science Quarterly. In a 2005 report he co-wrote, Seidel said working remotely increased workers’ self-promotion of how much work they were doing to impress a boss that cannot see the work being done directly.
The best way a company can avoid such a problem, Seidel said, is to reduce the employee’s feeling that the work is being done “out of sight,” and while being in the same office is ideal, regular contact through virtual technology can achieve similar effects.
“Video meetings more closely approximating casual conversations in office settings, instead of formal reporting meetings, are likely to be very helpful,” Seidel said. “There is always a learning curve when organizations experience changes. This shift to remote work in such a quick period of time is a drastic organizational change. The good news is that much research shows that after such drastic changes and the initial rough patch … overall effectiveness increases.”
He added that he wouldn’t be surprised that – even after COVID-19 – some aspects of remote work will survive to reduce wasted travel and resources.
“At least that is my hope – that there will be some good learning that comes out of us having to question what we took for granted as the status-quo of how work ‘needs’ to be done.”
