Enterprises experience ‘productivity tax’ as remote work environments set for long term

With companies around the world still dealing with the first wave of the Covid-19 pandemic that has resulted in mass remote working, research has emerged showing that in certain territories where remote working remains at peak levels, including the US and parts of Europe, employee productivity has continued to fall.

The fifth edition of the Remote work productivity tracker from enterprise digital experience management company Aternity describes a “productivity tax” affecting enterprises deploying long-term remote work strategies and showing that staff returning to the office are, in some cases, benefiting companies in terms of overall productivity.

The report is based on data aggregated from millions of employee devices from companies being managed via Aternity’s software-as-a-service (SaaS) platform. It found that since the end of March, when all regions of the globe had issued work-from-home orders, remote work has declined in regions that have reduced the spread of Covid-19.

Between 26 March and 9 July 2020, the share of remote work decreased by 8% in Europe, 17% in China and Hong Kong, and 13% in the Middle East and Africa.

Looking at the percentage of employees working remotely up to 9 July as global shifts in remote work slowed with the gradual return to the office, North America was found to have the highest share of remote work – 85%, a level that has remained steady since the shift to remote work began in mid-late March.

In Europe, which has predominantly reduced the spread of the virus, 64% of employees are now working remotely, a decline of 8% since 26 March. Other regions of the world have shown similar declines, including China and Hong Kong at 36%, a 17% fall since 26 March, and the Middle East and Africa at 30%, a 13% decline since 26 March. In Latin America and the Caribbean, remote work has not been as prevalent, with current levels at 29%, down 3% since 26 March.

These changes have had a marked effect on business productivity. The study found that productivity in North America initially increased by 23% between the middle and the end of March, while it declined by 8.2% in Europe over the same period. That initial trend has not continued, however.

Between 26 March and 9 July, productivity in North America declined by 14%. With a near-constant 85% of employees continuing to work from home, this suggested that workers become less productive the longer that remote working continues, said Aternity, imposing a remote work “productivity tax” on companies.

The report suggested that the overall productivity decline in North America was entirely attributable to the 14% decrease in productivity among US employees. Canadians were found to have adapted better to remote working, maintaining about the same overall productivity during the same period.

In all regions across the US and Canada, remote employees began and ended their work days 30-60 minutes later in June than in March. The same pattern was revealed in European countries with a larger percentage of in-office work.

In Europe, overall productivity increased by 2% from 26 March to 9 July, but the study also showed evidence of a remote work productivity decline in countries where remote work was still the dominant model. In Spain, Belgium and Switzerland, where the level of remote working is at least twice as high as in-office work, overall productivity has decreased since 26 March despite increasing in-office work. 

That said, overall productivity increased between 26 March and 10 July in countries with the highest growth in in-office work as a percentage of total work. Specifically, in France, Italy, the Netherlands, Denmark and Germany, employees are now mainly working in the office, driving overall productivity higher.

Aternity suggested several factors may be contributing to the rise in productivity as employees return to the office. The most significant was the fact that they are free from juggling work responsibilities with personal commitments, such as helping children with remote learning.

New health protocols, such as social distancing and requiring masks to be worn indoors, were reducing non-essential meetings or conversations that negatively impact on productivity, allowing employees to be more focused on their work, it said.

Also, IT performance was having an effect on employee productivity. The performance of some business-critical applications was significantly better for employees accessing them in the office compared with those accessing them remotely. Client-server applications designed for use on-premise delivered better performance in the office.

“As organisations go through digital transformations and consider permanent shifts to remote work, we developed our Remote work productivity tracker to help them better understand the impact that different work settings have on employee productivity,” said Bill Hewitt, president and CEO at Aternity.

“Whether employees are in the office or at home, the only way to harness the power of the digital enterprise is to understand its pulse constantly and at every endpoint, no matter how you shift to adopt technology or change your strategy. SaaS agility is a necessity to move at the pace of a digital enterprise.”