Remote work, also known as distributed or telecommuting work, allows employees to perform their job duties from locations outside the traditional office environment. This flexible work arrangement has gained significant traction, particularly after the COVID-19 pandemic, as companies and employees alike have recognized its benefits and challenges.

Also, for that reason, many platforms for remote administration appeared, they are essential for effective HR management. Orgchats, matrix teams, employee and contractors databases, access control: all of that can be done with Tribune — HR Platform for distributed teams.

The Situation from the Companies’ Perspective

Throughout the post-pandemic period, companies (especially large ones) have attempted various strategies to bring employees back to the office, often without success.

Why is Remote Work Productivity Lower?

In July 2023, Stanford released a study indicating that remote workers are, on average, 10–20% less effective than their in-office counterparts. The primary reason cited for this drop in productivity is companies’ inability to organize processes properly. Knowledge transfer, employee engagement, and corporate culture are the top three issues.

Companies are facing such significant challenges with hiring and retaining employees that recruitment has become a strategic priority.

Is There a Global Workforce Shortage?

Staff shortages are a global phenomenon, unemployment rates are at historic lows globally.

To solve issues related to employee attraction, retention, and efficiency, companies need to stop viewing people merely as a workforce and adopt a product-based approach:

1. Understand what the labor market wants.

2. Develop a unique employment value proposition.

3. Build effective onboarding processes and employee life cycles.

The first two points can be addressed with the help of the Oyster report we analyzed.

Why is Salary So Important?

The first and most significant factor for employees is salary and its regular review. While this may seem obvious, the importance of this factor has sharply increased since the pandemic, with 61% of respondents stating that financial motivation has become more critical.

Why Has Salary Significance Increased?

The importance of salaries has been growing due to a sharp increase in real estate prices that began in the 2000s, which has driven up the cost of living.

Let’s examine the disparity between income growth and real estate price growth in the U.S.:

Growth of Income vs. Real Estate Prices in the U.S.: Since 2020, the global economy has experienced an inflationary spike that continues today. The cost of living has risen significantly, further narrowing the already small gap between incomes and expenses.

Why is Remote Work Popular Among Employees?

The second most important factor for employees is the ability to work from anywhere. This is driven by a better work-life balance, time savings on commuting, reduced travel expenses, and other factors. However, it’s not just about convenience. Have you ever been on vacation and thought, “I wish I could live here on my current salary”?

This factor also reflects the purchasing power of a salary. Why rent a subpar apartment for €2,500 in Berlin when you can rent a great one in Zagreb or Athens for €1,200? You can compare the cost of living in different cities and countries on websites like NomadList and Numbeo.

Why is Company Culture Important?

The third factor is company culture. This doesn’t just mean informal communication between CEOs and employees or a relaxed dress code. Company culture encompasses the processes, behavior standards, and rituals within a company. At its core are processes that most companies can build effectively.

What Can Be Done About Declining Productivity?

On one hand, the Stanford study shows that companies struggle with building a remote work culture, leading to a decline in productivity. On the other hand, the Oyster study indicates that work culture is also crucial for employees.

How to Solve Remote Work Problems?

The solution lies in combining two approaches:

1. Modern Automation: Companies should become transparent to employees, making interaction with company institutions friendly and efficient.

2. Disciplined Management: This includes setting goals, providing regular feedback, maintaining transparent communication, and supporting employees.

Does Remote Work Affect Employee Engagement?

A remaining challenge is declining employee engagement — communication and social connections are harder to build in distributed teams. It’s crucial to occasionally gather employees to work and socialize together, which is essential.

Opponents of remote work often add that bringing people together is expensive. Let’s consider the costs:

Suppose the average cost of a workspace in a Class A office in major cities is $500 per month, totaling $3,000 over six months. Imagine a company decides to bring employees together for a week every six months. The estimated costs could be: airfare $800 + hotel $200 per day for 7 days + coworking space $50 per day for 5 days. This totals approximately $2,450. So, it is likely no more expensive than maintaining a workspace in an office.

Is Hybrid Work Effective?

The hybrid work model, a compromise between employees wanting to work remotely and management wanting everyone back in the office, has emerged as a solution. In our view, it is the least effective work format.

For employees, hybrid work often fails to deliver the benefits of remote work, such as the ability to live where they want, reduce expenses, and save commuting time. Schedules often don’t align, and work turns into the same video calls but from the office.

For companies, hybrid work requires office reconfigurations, creating numerous spaces for online conversations, and purchasing expensive equipment for group calls. Processes become less efficient due to scheduling conflicts in involved departments or discrimination against certain employees (such as technical support or HR).

Do All Employees Want to Work Remotely?

It’s important to note that 13.4% of employees do not want to work remotely. Additionally, many people may want to but cannot work remotely due to various reasons (unsuitable home conditions, work with specific equipment, roles requiring physical presence, etc.). For these employees, offices will remain relevant. It’s conceivable that, in the future, the option to work in an office will become a significant competitive advantage in the talent war.

Conclusions:

Instead of expending efforts to revert to the past, both individuals and companies should adapt to transition into a new era of remote work as the norm.

The key to winning the talent war lies in satisfying employees’ three main demands: competitive compensation, the ability to work from anywhere, and a strong work culture. While such extreme changes may not suit everyone, numerous successful examples of large companies (with over 500 employees) working remotely exist, including Zapier, Deel, HubSpot, Canva, GitHub, Trello, and PandaDoc.

Join Us at the HR Synergy Forum 2024

To explore these ideas further and gain insights from industry leaders, join us at the HR Synergy Forum 2024 in Limassol, Cyprus, on October 30–31. This event will feature discussions on critical HR challenges, including remote work strategies, talent retention, and corporate culture. Don’t miss the opportunity to connect with HR experts and peers from various industries. For more information and to register, please visit our website. We look forward to seeing you there!

FAQs

What are the main benefits of remote work for companies?

Remote work allows companies to access a wider talent pool, reduce overhead costs associated with maintaining physical office spaces, and increase employee satisfaction by offering flexibility. It can also lead to increased productivity if managed effectively with the right tools and processes.

How can companies address the challenges of remote work productivity?

To improve productivity in remote work settings, companies should focus on modern automation, clear communication, regular feedback, and strong management practices. Building a transparent and supportive work culture also plays a critical role in maintaining productivity.

Is hybrid work an effective solution for balancing remote and in-office work?

Hybrid work can offer a compromise by combining remote and in-office work benefits, but it often presents challenges such as coordination issues and inefficiencies. Companies need to carefully design their hybrid models to avoid these pitfalls and ensure both employees and management find it beneficial.

What are employees’ top priorities regarding remote work?

Employees prioritize competitive compensation, the ability to work from anywhere, and a strong company culture. Meeting these expectations can help organizations attract and retain talent in a competitive job market.

What can I expect at the HR Synergy Forum 2024?

The HR Synergy Forum 2024 will feature expert-led discussions and panels on pressing HR topics, including remote work strategies, talent retention, and corporate culture. Attendees can expect to gain valuable insights, network with industry peers, and participate in open discussions.

How can I register for the HR Synergy Forum 2024?

To register for the HR Synergy Forum 2024 in Limassol, Cyprus, on October 30–31, please visit our website for more information on the agenda, speakers, and ticket options. We look forward to your participation!