Who Is More Productive: Remote or Onsite Employees?

​A recent Microsoft study on hybrid work and productivity revealed a stark divide between leaders and employees. Although numerous studies have shown that employees are often more productive when they have the option to work remotely, more than three-quarters of the leaders surveyed by Microsoft remain skeptical, a phenomenon that the researchers dubbed "productivity paranoia."

If unresolved, this paranoia can lead organizations to restrict or even terminate their remote-work options, which may, in turn, impact HR's ability to recruit, retain and engage talented employees. The following four steps can help you determine what works best in your organization.

Step 1: Do a Reality Check

The first step to determine if remote workers are less productive within your organization is to gauge whether that premise has any basis in reality.

As the former vice president of a global learning company with more than 3,000 employees—many of whom work remotely—John Arendes had trouble convincing his CEO that their remote employees were being productive.

"He was making judgments without data based on preconceived ideas," said Arendes, who is now CEO of the compliance training company Traliant in Manhattan Beach, Calif. Then reality intervened to change the CEO's mind. After the company was forced to move to fully remote work during the pandemic, leaders saw a 37 percent increase in productivity based on key metrics such as course development, product development and sales, which demonstrated the importance of using data to make decisions.

"There's a solution to every problem," Arendes said, "but you can't solve the problem until you understand what it's really about."

One approach is to pinpoint the source of leadership's resistance to remote work, said Ken Matos, director of people science at Culture Amp, a New York City-based employee experience platform. This can be done by: 

• Asking leaders to define what they mean by productivity.
• Establishing productivity metrics for each role.
• Analyzing the data.
  

"Work your way through the explanations starting with the most obvious," Matos said. "If you show leaders the metrics and it doesn't move the needle, the resistance is about something else. It's not about the numbers."

Step 2: Develop Meaningful Metrics

Ben Loring, a senior principal at Gartner HR in Washington, D.C., identifies what he considers to be the three most important productivity metrics:

• Activity metrics to measure how many hours are spent on various tasks.
• Outcome metrics to measure results.
• Predictive productivity metrics to measure the efficiency and effectiveness of processes. 

"If you measure productivity by activity, you end up rewarding people who aren't achieving goals and results," Loring said. "If you define productivity based on outcomes, the focus is more on results than just the fact of being present."

The traditional view of productivity usually focuses on tasks, volume or busyness rather than quality outcomes.

Many experts believe a meaningful assessment process includes both qualitative and quantitative measures. Topia, for example, uses the Objectives and Key Results (OKRs) framework to set quarterly goals and measure progress. "It takes away the need to monitor what employees are doing," said Jacky Turnbull, chief people officer at the global talent mobility platform. For example, one of the HR team's year-end OKRs is to revamp Topia's remote-work policy and meet diversity, equity and inclusion goals. But the assessment goes beyond the numbers because the OKRs are closely aligned with the company's core values, Turnbull said. Employees are evaluated both on what they accomplish and how they accomplish it.

Effective communication can also have a significant impact on productivity when used to build trust, transparency and accountability. "Proper and consistent communication is a key factor to assure leaders that employees are working," said Laith Masarweh, founder and CEO of Assistantly in Irvine, Calif., a 350-employee virtual recruitment and staffing company. "If you don't have communication, there's no trust. And if you don't have trust, things break down."

Although Assistantly prides itself on its flexibility, the company also values communication and collaboration. It maintains regular business hours (approximately 9 a.m. to 6 p.m. PT), and everyone is asked to check in with their manager first thing in the morning and at the end of each day. There's a virtual all-company meeting once a month, and in between staff rely on Slack and Zoom to stay connected.

Several experts emphasized the importance of managers meeting regularly with team members one-on-one to set goals, clarify expectations and troubleshoot productivity deficits.

"Employees who know what's expected of them from management, the metrics they are going to be measured against and how their individual role contributes to the organization's mission will be the most successful," said Katherine Loranger, chief people officer at Safeguard Global, an employment outsourcing company in Austin, Texas. Once clear key performance indicators and measurable objectives are established, she recommends that managers leave it up to individual employees to determine how the work gets done.

"When managing remote or hybrid employees, it's important to have clear goals and expectations around response times, availability and standards," said Jennifer Donnelly, senior vice president at Segal, an HR consulting firm in Buffalo, N.Y. 

Step 3: Trust but Verify

"The No. 1 thing we instill in all of our leaders is trust. You need to trust your employees until they prove otherwise," Arendes said. Since he took over as CEO of Traliant 18 months ago, Arendes said, he has seen the impact of that trust on both the culture and growth of the company. Although the firm has nearly doubled in size, only four employees have left voluntarily.

"Trust building is relationship building," explained Turnbull, adding that trust breaks down when leaders are isolated from the people they are supposed to lead.

"Senior leaders are often removed from their front-line employees and don't really know what they do," said Erin Dertouzos, vice president of people strategy at StrongDM, a remote security software company. "There's a false belief that if they can't see their employees, they aren't really working."

Dertouzos sees the widespread movement to adopt remote and hybrid business models as an opportunity for HR to be a true business partner to help company leaders develop a more thoughtful approach to leadership and management.

"The hourly approach of tracking professionals is archaic," she said. "The mission is to create an environment where people can do the best work of their lives."

Donnelly also encourages HR leaders to be more thoughtful and intentional about how they implement remote and hybrid work processes and policies. "Look at collaboration tools and the meeting environment to make sure it includes remote employees and gives them a way to participate," she said. "Make sure the technology you choose supports remote work and the way it fits into the work culture."

When considering new technology to aid remote work, many HR leaders are unaware of the full menu of options. So it's important to invest in the software that best suits the culture and needs of the business, said Adam Riggs, CEO of Frameable in Washington, D.C., an online workplace platform. He cautions against the common tendency to conflate transparency with visibility.

"The right technology can be used to show leaders that employees are really working," Riggs said. Not surprisingly, Frameable uses its own platform to create a virtual infrastructure that maps to physical infrastructure.

"It allows us to see where everyone is, what they are working on and who they are working with," he explained. "It takes away the need for monitoring because we see from their avatar exactly where they are and what they are doing. It offers the benefits of in-person work without the commute."

Step 4: Prioritize Employee Well-Being

In an analysis of 339 independent studies originating from 230 independent organizations across 49 industries in 73 countries, London School of Economics researchers found a direct correlation between employee well-being, productivity and company performance. This dovetails with Masarweh's belief that "employee well-being is the key to productivity" and that "a healthy employee is a productive employee." He recommends that HR implement regular anonymous employee satisfaction surveys to see what employees want and need.

"Find out what would make them more productive and then show that data to the leaders," Masarweh said. "This will force them to confront what's best for the business, not just what they personally prefer."

When he realized that employees were often unproductive on Fridays because they were making plans for the weekend, Masarweh decided to give everyone Fridays off. "It's been great for morale and productivity because people are motivated to get their work done in four days," he said.

"Many executives don't really know what their employees do," Culture Amp's Matos added. "They need to recognize that people are human beings, not just extensions of the business."

Turnbull agreed. "Productivity paranoia is a reflection of leaders' discomfort with not being in control," she said. "We need to treat each other as adults and as human beings. The other side of the productivity conversation is burnout."

Arlene Hirsch is a career counselor and author based in Chicago.