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Remote work boosts productivity

Remote work will deliver major changes to the workplace and to the economy, Upwork's chief economist Adam Ozimek says in an interview.

Once the pandemic ends, employers may encourage employees to continue to work from home for economic reasons. Those reasons include remote work productivity gains.

A recent survey by Upwork Global Inc., which provides a platform that connects professional freelancers with businesses, found that remote work was increasing productivity.

Upwork polled 1,500 U.S. hiring managers and executives using an independent third party. The survey's core conclusion is that remote work is here to stay, a finding that gets support from other industry analysts. Upwork's survey, featured in the recently published "The Future of Work" report, drills into some of the reasons why the shift to remote work will continue.

Adam Ozimek, Upwork's chief economist and author of the report, believes that remote work will stick, in part, because of remote work productivity gains. He outlined the trends in an interview. 

Prior to the pandemic, Upwork estimated that about 13% of U.S. workers were remote, a number the company based on the survey results.

Before COVID-19, were hiring managers resistant to the idea of remote work?

Adam OzimekAdam Ozimek

Adam Ozimek: Some of them were and some of them weren't. They didn't feel like making a big change, and they didn't have to. But now they're learning that it works a lot better than they thought.

The vast majority in your survey, 56%, said remote work has gone better than expected, and 35% said it has gone as expected. Only 10% said that it's gone worse than expected. What was your takeaway from those numbers?

Ozimek: The great remote work experiment is working. People are finding that the stuff they were worried about isn't nearly as big of a deal as they thought it was going to be. People are being thrown into this gigantic experiment very quickly and without really time to plan. Even in account of all of that, it's going well.

One of the major obstacles to remote work is distractions at home. In the survey, 32% cited this as a problem. Will this change in time?

Ozimek: It's never going to be worse than it is right now. Schools are closed. Daycares are closed. You can't get out of the house. There's really nowhere that you can send your kids during the work week. Some of [those who see it as a problem] might, in the long run, find out that [remote work] does work.

Not having to commute was the top benefit of remote work, cited by 49% of managers in this survey. But that was followed by the reduction of nonessential meetings, cited by 46%, and by less office distraction, cited by 41%. What does this tell you about office environments?

Remote work gives us more control over our day.
Adam OzimekChief economist, Upwork Global Inc.

Ozimek: It kind of gives you a cynical view of what we're doing at the office, right? That there's a lot of unnecessary stuff that we do and that we can accidentally get in each other's way a little bit. Remote work gives us more control over our day.

The leading obstacle in remote work was technological, cited by 36%. But other impediments included reduced team cohesion, cited by 30.5%; difficulties in communications, cited by 30%; and less organized teams, cited by 23%. Will those problems lead to reversals of remote work?

Ozimek: There are some companies that, just for whatever reason -- cultural fit or something about the way they do business -- it's not going to work for them. But it doesn't have to work for everybody in order to significantly increase the share of people who are working from home.

The technological problems will get better over time, and that's going to help with your team cohesion and communication issues, so some of it might be temporary.

The survey found that hiring managers expect 22% of their workers will be entirely remote in five years. About 40% of the overall working population will be either working full-time or part-time remotely. Do you think that is going to lead to major changes?

Ozimek: I think it's going to lead to major changes in the way we work and live. [Remote work] is going to be something that weighs against demand for living in the most expensive, crowded, high cost-of-living cities. That doesn't mean those cities are going to suddenly empty out. For every one person that finds a place to live in San Francisco right now, there are 10 who would love to live there. The same for Manhattan. They might not shrink outright, but the cost of living could fall. House prices are going to fall as lower cost-of-living places become relatively more desirable to live.

Pre-COVID, some companies reversed work-at-home policies. Are they exceptions or warnings?

Ozimek: Before the crisis, every single year, a greater share of the workforce was going remote. It's not the case that we tried this before, and it failed in general. It was on a steady path upward over time already, which I think is pretty suggestive that it's working for more people than it isn't working for.

The report contends that remote work productivity will deliver gains for the entire economy. In it, 32% of hiring managers said productivity has increased, compared to 22.5% who reported a decrease. Do you really think remote work can have a positive impact on productivity in the economy?

Ozimek: With remote work, you see [productivity increases] in the data. Remote work has been steadily growing over time, and now we're about to accelerate it. But even if you step back from the impact on individual worker productivity, something that's happened in the last few decades is that people have crowded into high cost-of-living places.

Once people can live where they want and not live where they have to because of work, I think you're going to see people start to locate to cities where the way they respond to higher demand [for housing] is to actually build more houses. You're going to have less of the economy being vacuumed up by landowners. And that means more of the economy could go to businesspeople and to workers.

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