Equality of Opportunity in Remote Employment

Organisations are increasingly considering the cost-benefit analysis of hiring remote workers versus traditional employees. One key question is often raised: what if we recruited someone from outside the United States? To help answer this, we have developed a new concept, similar to the Big Mac Index, which we are referring to as the Remote Job Parity. We are conducting a thorough investigation into the potential advantages, and drawbacks, of engaging remote workers in order to help organisations make an informed decision about whether or not it is the right choice for their business.

In this analysis, we will consider the factors of productivity and cost that are applicable to virtually all businesses. Subsequently, we will assess the pros and cons of having employees work from the office compared to from their homes.

Please let us know if there is anything we have overlooked.

Comparison of Remote and Traditional US Employees

Times Spent Working

  • Indoor Employees: The Bureau of Labor Statistics reports that the typical American workday consists of 8.8 hours. They work for just 2 hours and 53 minutes however!
  • Employees Working From Home: A joint study conducted by CoSo Cloud Solutions and US News & World Report has revealed that remote employees are putting in an additional six to seven hours of work each week, as well as demonstrating greater levels of effort.

Profitability Measurement

  • In-Office: A recent survey conducted by Harvard University has revealed that 16% of those who work in an office environment experience distraction from their surroundings. This cost of these distractions, such as noisy colleagues and telephone calls, is estimated to cost the USA an eye-watering $1.8 trillion in terms of lost productivity on an annual basis.
  • Remote: A recent survey conducted by Sure Payroll has revealed that 66% of businesses who utilise remote working report increased productivity. It has been observed that these employees are less likely to take time off due to illness, and are more likely to take shorter breaks and vacations.

Engagement:

  • In-Office: Managers may be physically present at all times for onsite staff, but they seldom interact with employees.
  • Remote: A report released by Gallup, entitled “The State of the American Workplace”, indicates that remote employees are likely to experience the highest return on investment when it comes to engagement. This is due to the fact that, despite working away from the office, they can still participate in daily meetings with their supervisors and colleagues.

Stronger bonds via cooperative effort

  • In-Office: It has been suggested by Harvard that the number of collaborative projects has increased significantly over the last two decades, however, it is important to note that only a small proportion of employees, 3-5%, who are deemed to be helpful, actively take part in such initiatives. This serves to highlight that it is possible to have too much of a good thing.
  • Remote: At Harvard, both students and faculty members have come to favour digital methods of collaboration. This is due in part to the fact that digital collaboration can accommodate a range of working styles, promote involvement from all members of the team, and, as a result, increase engagement and produce more effective outcomes.

Acquiring the necessary technical knowledge

  • In-Office: When employees leave their positions, whether it be on a permanent or temporary basis, their managers can often be left with few alternatives other than opting to recruit somebody who is less qualified to take on the role.
  • Remote: By enabling remote working, businesses can benefit from a wider talent pool of experienced and knowledgeable professionals, such as retired workers and parents who have taken a break from their careers. This has the potential to reduce the burden on businesses, as these individuals can continue to work, but from a location that enables them to meet their other commitments.

Capabilities afforded by technology

  • In-Office: The workplace as a whole has gone digital. Some workers have trouble adapting to the new procedures.
  • Remote: It is not unexpected that Millennials and Gen Z, who have been surrounded by computers since childhood, have an advantage in terms of their ability to use the technology required for remote working. Remote workers are accustomed to utilising a range of remote technologies, such as communication applications, video conferencing services, and file sharing platforms.

Communication

  • In-Office: It is often the case that the very characteristics which define us as human beings, and which should help to foster meaningful connections between us, may instead be obstacles to establishing such connections. Inadequate self-confidence, pre-existing biases, non-verbal body language and a lack of concentration can all have detrimental impacts on the effectiveness of communication within a professional setting.
  • Remote: The successful execution of remote work is now largely dependent on the use of remote communication technologies. The majority of remote teams employ one or more of these platforms, enabling them to effectively supervise, expedite and simplify the communication process, while requiring little effort from their personnel.

Salary

  • In-Office: When recruiting for a position, it is important to consider candidates from outside the local area. This can bring a wealth of talent to the business, although it may come with additional costs such as relocation expenses. These should be taken into account alongside the regular salary when hiring employees from abroad.
  • Remote: It is not equitable to differentiate against a remote worker through paying them less. However, if you expand your search to encompass personnel from all over the world, you could potentially save a large sum of money on salaries. For instance, the salaries of Java programmers demonstrate this. In the United States, the average wage for a senior programmer is $137,000, whereas the wage is $78,000 in Sweden, $70,000 in Australia, and $58,000 in Spain.

Expense to Business

  • In-Office: The costs associated with sustaining a workforce, ranging from minor perks such as transport reimbursements to the more considerable health insurance premiums, increase as the number of personnel employed increases.
  • Remote: After extensive consideration of the evidence presented both here and here, it is apparent that allowing employees to work remotely can be extremely beneficial to businesses in terms of cost savings. Not only are there direct cost reductions, but there are also a multitude of indirect cost reductions. A survey conducted by FlexJobs found that 77% of remote workers reported better physical and mental health than those working in an office setting.

Work-life equilibrium

  • In-Office: It is increasingly common for office workers to experience stress and poor health, largely as a result of a range of underlying issues. These include a restricted ability to allocate time to hobbies and other interests outside of work, the need to travel to and from the office every day, and being sat down for extended periods of time. All of these factors can contribute to a feeling of being overworked and undervalued, which can lead to mental and physical health problems.
  • Remote: For those who work from home, achieving a healthy balance between their professional and personal lives can be difficult. However, this is something that they are able to do that their office-based colleagues may not have the opportunity to. This is supported by research such as the State of Remote Work research conducted by TINYpulse and Owl Labs, which revealed that 51% of remote workers felt their work-life balance had improved as a result of their position.

Vacancy amongst workers

  • In-Office: The Work Institute’s Retention Report has highlighted that businesses are facing a potential loss of one in four workers by 2023, which is estimated to cost the American economy a staggering $680 billion. This alarming situation could have serious ramifications for businesses of all sizes, as well as the wider economy.
  • Remote: According to research conducted at Stanford University, it was found that businesses with remote employees had a 50% lower turnover rate compared to businesses with onsite employees. In addition, a poll conducted by TINYpulse/Owl Labs revealed that these businesses also had a 25% higher retention rate.

It can be difficult to assess the exact number of people working remotely who could replace one person in an office, however, by purely considering salaries, it can be estimated that around twice as many people could be employed in a home-working environment as opposed to a traditional office setting. However, this calculation is overly simplistic and overlooks the fact that an individual with specific skills and expertise could have a significant effect on a team by contributing a range of views and experiences.

The findings of this study have demonstrated that working from home is definitely more advantageous than being confined to an office. This is likely to be the reason why more businesses are now allowing their employees to telecommute. If you have any further queries, please do not hesitate to contact us.

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