Corporate Wellbeing Asia 2023
How working in the office vs working from home affects productivity, innovation, culture and engagement

How working in the office vs working from home affects productivity, innovation, culture and engagement

Flexible work arrangements can improve work-life balance by reducing commute times and increasing the ability to focus. However, they may be diminishing returns for employees beyond a certain point of remote work.

In a new report, titled Purpose of Place: History and Future of the Office, Cushman & Wakefield has highlighted the benefits of both office and working from home (WFH), focused on four dimensions, namely productivity, creativity/innovation, corporate culture, branding, and employee engagement.

According to the researchers, these are the four main dynamics will impact the degree to which remote work in a post-COVID-19 world will impact the office sector. Excerpts from the report below:

#1: Productivity & output

Flexible work arrangements can improve work-life balance by reducing commute times and increasing the ability to focus. However, they may be diminishing returns for employees beyond a certain point of remote work. A 2007 meta analysis of 46 academic studies of literature suggests that workers see greater autonomy and lower work-life conflict when working up to 2.5 days per week; beyond 2.5 days per week, the researchers found that there were greater harms to relationships with coworkers. However, the results are complex and depend on industry, occupation, job complexity and the degree of remote work. 

 What this means for employers:

  • Distributed workforces offer potential output benefits to employers:
    • Disruption avoidance
    • Increased productivity
    • Improvements in employee work-life balance
    • Access to talent
  • Productivity is difficult to define for knowledge and creative class workers. These are the very employees who both can execute much of their work from anywhere and benefit the most from in-person collaboration / interaction.
  • Impacts of remote work on productivity vary greatly depending upon employee personality, role and job complexity.
  • Employee choice is a net-positive; working remotely every day is often not.

 #2: Innovation & creativity

In an interview analysis of managers and employees at four different firms, researchers found remote work to be a double-edged sword when it came to “innovative work behaviour”. On the positive side, employees noted the ability to focus better when away from hectic workplaces. This suggests that for successful remote work, employees need a distraction-free place in their home, or a productive environment in a “third office” such as a satellite office, co-working location or coffee shop. For some workers, however, a distraction-free home office is not an option. Young workers, for example, are more likely to have WFH challenges due to caregiver responsibilities and inadequate workspace.

What this means for employers:

  • An important implication for the future of office demand is that employees and managers are intuitively aware of the benefits and risks of remote working and therefore balance their approach to manage hybrid models of working from the office and from anywhere.
  • Getting away from the office periodically has measurable benefits for innovation by creating “head space” for workers and offering new ways— or “fresh eyes”—to look at projects. These gains, however, have not been proven over long-term, permanent virtual work.
  • Impromptu collaboration and serendipitous discussions play a key role in creativity and innovation, highlighting the need for office space.
  • Remote work is complementary to in-office work, but not a full substitute for most workers as it decreases innovation.
  • Ultimately, “the positive effects of remote working on [innovation] can only be fully realised if employees have the freedom to determine the extent to which they engage in it themselves and a balance is maintained between physical and digital communication.”

#3: Culture & branding

When scholars study remote work, there are no completely applicable studies that examine the direct relationship between remote work and corporate culture. There is, however, literature exploring how remote working and culture are related. The first finding is that culture influences how much organisations can adopt various degrees of remote working. Second, there is a subsequent feedback loop where adoption of remote working begins to influence culture. And finally, managers adopting more remote working in their organisation have to think conscientiously about how to build culture with greater degrees of remote work.

What this means for employers:

  • Remote working can provide some benefits to culture, but tends to pose more challenges.
    • Half of employees struggle to connect with their company’s culture while working from home during COVID-19.
    • Even during more normal times, less face-to-face interaction equates to less engagement in the corporate culture, and managers find it more difficult to foster certain values through traditions and customs.
    • Going fully virtual will eliminate that physical manifestation of their organisation in the office, which will make corporate branding more challenging.
  • Increased remote working can lead to one or more of the following common outcomes, which vary in their value:
    • Formalisation of control: Feeling out of control, organisations increase oversight of the remote workforce and attempt to manage (or even micromanage). 
    • Liberalising: Greater autonomy is given to employees and improved communication leads to faster decision-making and execution.
    • Dilution: The existing culture is slowly weakened as the physical distance of employees makes it more difficult to impart and reinforce shared values, norms and traditions.
  • Mentoring and learning opportunities are diminished via remote work without active efforts by the company to replace the consistent interaction, as well as spontaneous interactions that lead to these learning opportunities.
  • The degree of autonomy and interaction of employees plays a vital role in whether organisations can continue to maintain a consistent culture. Many organisations are presently being stressed in this regard as they lack the same human interaction that fosters these shared values.

#4: Employee engagement & satisfaction

In a tangible sense, employees benefit from remote working through increased autonomy, decreased commuting time and increased work-life balance. In one study, researchers estimate that remote workers have saved $90 billion in commuting costs during COVID-19 restrictions over the March to August 2020 period. On the other hand, working from home has caused disruption and stress unique to virtual work—for example, not all employees have access to focused offices and share their home with roommates, dependents, partners or spouses. This stress has been felt disproportionately by younger workers since the onset of COVID-19. The demands of remote working from COVID-19 restrictions have indeed shifted capital requirements and costs onto employees—workers must have access to high-speed internet, webcams, high-quality microphones and physical space to conduct work.

What this means for employers:

  • There are mixed results from various studies related to the impact of remote work on employee satisfaction or engagement. This points to the fact that distributed workforce strategy needs to be customised for individual organisations and needs to take into account different types of employees, roles, functions and team structures.
  • The future of office demand will be different based upon the autonomy and interpersonal interaction of specific groups of employees because engagement depends on things such as how senior an employee is, the complexity of their tasks, and how much they see their customers, clients and coworkers.
  • The negative effects of a distributed workforce on employee satisfaction can be exacerbated by poor management of remote work and workers. Regardless of the strategy—from 100% virtual office to all employees required to be in the office every day—talent management still matters.

Photo / 123RF

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