COVID-19 turned remote work into a reality for tens of millions of Americans almost overnight. Now, 66 percent of workers report working remotely at least some of the time. Remote work was already on the rise for years, growing 173 percent since 2005. And now it’s possible that COVID might be accelerating us towards a world where remote work becomes the norm—a norm that could be a major boon to rural America. While rural economies have long struggled as available jobs concentrated in urban centers, remote work can offer rural workers tech-enabled pathways to sustainable employment. By giving rural America unprecedented access to the national job market, remote work will make it easier to connect rural talent with high-paying jobs. And with remote work going widespread, many urban dwellers might reconsider where they’re living, bringing their talent and income to small towns nationwide.
To assess the power of remote work, especially in rural areas, we dove into the burgeoning research on remote work. We found that for many companies, remote work can be good for business, especially when adopted with the best managerial practices. Below are our most important takeaways on what employers need to know to successfully implement remote work.
The business case for remote work
From cost savings to employee retention, remote workforces can offer advantages to employers looking to take advantage of this growing trend. Our research identified five key areas where remote work can bring organization wide benefits.
Remote work helps companies save money in many ways, mostly related to space and personnel. A typical employer can save an average of $11,000 for each half-time commuter employed per year. Without the need for a physical office space, real estate costs decrease. Additionally, remote workforces generally have lower turnover than those that require an in office presence, meaning major potential savings on replacement costs and onboarding and training time.
When employers adopt remote work, they often see increased employee participation and engagement, which can boost the companies labor productivity. And many remote workers are happier at their jobs, with 40 percent reporting they were likely to work overtime because they enjoyed what they did. Overall, 71 percent of remote workers report job satisfaction, versus 55 percent of their on-site peers. Employee productivity is highest when employees work 3-4 days per week remotely, and one day in the office. This allows employees to maintain dedicated time to work without distraction, while still getting regular face time with managers and peers.
Without being tied to recruiting only in their physical region, employers can recruit talent from anywhere, opening up the possibility of landing higher-quality candidates. Firms can hire outside of ultra-competitive talent hubs and bring skilled, experienced workers in at a lower acquisition cost. These benefits can add up, as the average US employer spends $4,000 per new job opening, and 46 percent of newly-hired on-site employees fail within 18 months on the job.
As remote work becomes more widespread, it’s likely that more workers will expect and appreciate the option to work remotely, at least part of the time. As such, it will become important for employers to offer remote work as an option. One study found that 37 percent of workers would switch to a job that allows them to work off-site some of the time, and 53 percent of workers say that work-life balance is important to them—which remote work can help provide through decreased commutes, more time with family, and greater work satisfaction.
Client Market Access
When a company has client markets everywhere, but employees are only in one headquartered location, it can run up major costs when trying to plan for in-person meetings where clients are based. In fact, the U.S. Travel Association reported that companies spent $334.2 billion on travel to have employees host or attend work meetings. Building a distributed workforce can minimize these costs. Of course, COVID-19 is upending travel for all companies, remote and otherwise, but it remains true that a local or regional presence can be meaningful for client relations.
Best practices for implementing and managing a distributed workforce
While remote work can offer these cost and productivity benefits to employers, there still are challenges companies need to be mindful of as they consider the transition to remote work. Adopting practices like the ones below can help companies maximize their savings and benefits with a distributed team.
When teams are remote, monitoring employee work tasks can be challenging, as managers don’t get the interaction that’s naturally built into an office setting. Remote monitoring can help address that, and include tactics like tracking screen time and mouse movement, which have been shown to decrease work avoidance. While the synergy built in in-person offices is difficult to perfectly recreate online, there are ways to keep employees engaged.
Technology today is powerful, but there are still sometimes hiccups in transitioning to remote teams. Often, organizations lack sufficient collaboration tools, tech infrastructure, and interpersonal training to guide remote employees through navigating work situations. To ensure smooth remote work, companies should be aware of broadband availability in the regions where they’re hiring remotely. They should also focus on equipping remote employees with access to key technologies like cloud storage, communication tools, and collaborative information systems, while also providing training support for those platforms to ensure employees are maximizing their usage.
Planning for legal and tax implications
Many employers forget to account for the legal and tax considerations of having remote workers. However, to understand how remote work will affect a company’s bottom line, it has to fully analyze these costs and consequences. Companies should do research into local tax and employment laws to see whether employees will be at risk of paying two states’ taxes, whether employers will have to abide by multiple codes of employment law, and whether HR departments will be able to factor in changes to workers’ comp and insurance policies.
Adopting remote managerial practices
Remote employees often worry they will be left out of traditional career advancement tracks. Managers can address this anxiety by creating job descriptions with specific measures of success and advancement to give remote employees more structure. They should also adopt a practice of collaborative goal setting, because when employees see how their role contributes to the success of the team and organization, they are 3.5 times more likely to be engaged in their work. More broadly, managers have to help create a shared identity in their remote teams. That means doing their best to recreate the organic conversations that physical offices are home to. Overall, for remote work to be effective at scale, employers have had to make steady, consistent investments over time to help mold remote work to their unique strategies, allowing remote work options to be flexible as their workforce changes.
The good news is, lots of companies have successfully managed their transition to remote work, so we know it can be done. Intuit, for example, has a robust remote work program, offering specialized training to remote and on-site teams that fosters virtual partnership and a flexible work culture. Dell launched its Connected Workplace Initiative in 2010 to encourage more remote work, and in two years reported $14 million in cost savings and a 6,375 metric ton decrease in carbon emissions. Aetna has used remote work for over 20 years, saving millions on real estate. Kaplan allows 85 percent of its workforce to be distributed.
It’s clear that remote work has the potential to be a powerful option for companies to embrace. It’s also clear that this power can be especially transformative in rural communities, which have long faced struggling economies and a disconnection from tech-enabled career paths.Through our work developing digital economy ecosystem strategies, we’ve seen how remote work can lower the entry barriers for rural workers to secure jobs at high-paying firms, and allow employers to tap into talent present but underutilized in rural places nationwide. While technology has contributed to rural America’s economic decline, the rise in remote work with today’s more inclusive technologies can reverse this trend and allow rural workers to connect with the digital economy to enhance our country’s productivity and offer geographically inclusive opportunity.