Why is telecommuting on the rise

By some estimates, Dragon says it can cost companies up to nine months of a person's salary when they leave. When Candace Beres, 30, switched jobs six months ago, one of the things she was looking for was the flexibility to telecommute from her home in Hamilton some of the time, freeing up time that would otherwise be spent making the hour-long-plus commute to and from offices in Toronto.

Now a senior account manager for public relations and marketing firm The Colony Project, where all employees work from home on Fridays, Beres says her telecommuting days are her most productive. I find that it's my busiest day of the week, in addition to being the happiest day. There was a work-from-home component to almost every job Beres considered, and she says that more of her millennial peers are looking for the same.

Many of her friends who had moved to Toronto for work have since moved back to Hamilton to raise their kids in less costly housing close to family. Karen O'Malley and her husband moved to Petawawa, Ont. She works remotely full time as office manager for AgentC, a recruiting firm that specializes in hiring admin workers for the real estate industry. Like Beres, she also finds productivity is higher in her home environment.

I find it easier to focus on larger projects and the turnaround time is a lot better. O'Malley says she has felt isolated from her colleagues in previous work-from-home roles — but not in her current job. They're very good at keeping you involved and up to date on everything that's going on in the company," she said of her employers, who also work from home.

The team of four remote workers and several freelance contributors communicates using WhatsApp throughout the day. This policy brief has been produced in the context of the Global Forum on Productivity and benefitted from support by its members.

This has potentially large impacts on businesses of all kinds, whether they had embraced teleworking in the past or not OECD, [1]. For instance, many workers — especially young, less educated workers at the bottom of the wage distribution — during the crisis worked in jobs requiring physical presence Brussevich, Dabla-Norris and Khalid, [2].

Telework has been crucial to sustain production during the crisis, but its effects on productivity are unclear. In the short term, compared to the pre-crisis period, the exceptional conditions in which telework was implemented may well have lowered productivity for those who were able to work from home.

In a recent interview, Nick Bloom from Stanford University, who previously identified important gains from telework under normal circumstances among Chinese call-centre workers Bloom et al.

Conversely, a poll among US hiring managers found that managers were more likely to have experienced short-term productivity gains rather than losses due to remote work Ozimek, [6] , suggesting that productivity losses during the crisis are by no means a foregone conclusion. Emerging evidence provides support for this notion: However, against these positive longer-term productivity effects stand potentially adverse effects arising from increased spatial distance among employees, e. Public policies and dialogue among social partners can play a key role in facilitating this transition and contributing to spreading of teleworking practices that enhance both productivity and worker well-being.

They can enable firms to carry out the necessary adjustments, while counteracting potential risks and allowing more workers to benefit from welfare-improving telework opportunities. Understanding the long-term impact of teleworking at the firm-level and aggregate productivity is important given the likely rising diffusion of this work practice globally.

Future research conducted by the Global Forum on Productivity as part of its work on the Human Side of Productivity project 2 aims to empirically investigate the link between telework and firm productivity using granular data. As a first step, this brief draws largely on existing evidence to discuss the potential role for policies to contribute to the more widespread use of efficient and welfare-improving telework in the medium- to longer-term, as the immediate health crisis recedes and firms and workers have more discretion whether or not to telework.

The brief consists of two parts: First, it discusses the prevalence of telework in the pre-COVID era, to gauge the scope for a wider use of telework after the crisis.

Second, it discusses how policies can maximise the potential gains from more widespread telework for firms and workers. To that end, it briefly reviews the link between telework and productivity and discusses the challenges policies need to address.

Based on this review, it then discusses some key policies contributing to higher gains from telework for productivity and worker well-being. Differences across countries, industries, occupations and firms in the use of occasional telework before the crisis can be informative about the scope for more widespread use of telework during normal times, as well as about factors that need to be in place to use telework efficiently or that may prevent its use.

By way of example, to the extent that factors such as lack of ICT skills, inefficient management practices or tasks requiring physical presence prevent the use of telework and are more common in some countries or types of firms than others, cross-country or cross-firm differences in the prevalence of telework give an indication of the scope for increasing telework via better management practices and public policies aimed at widening access to it.

Information on the use of telework before the crisis thereby complements insights gained from the use of telework during the crisis. The fast pace with which many firms adapted to the health crisis by conducting a large number of jobs from home indicates that the use of telework pre-crisis remained well below what is feasible.

In the US for instance, 94 percent of 1 hiring managers surveyed in April indicated that some of their workers teleworked during the crisis Ozimek, [6] ; in another survey that is representative for the US population, out of 25 respondents surveyed in April , 34 percent of those employed four weeks earlier indicated having switched to telework during this period Brynjolfsson et al.

Moreover, workers were usually forced to telework during the crisis. While many may continue to telework in the longer term, as long as regulatory and other obstacles to telework persist many others may not want to. Already in a substantial fraction of workers across many OECD countries teleworked — i. Yet, the extent of people teleworking varied widely across countries, from around 25 percent in Portugal and Italy to more than twice as many people in Sweden and Denmark.

It is important to note that the share of people having teleworked shown in Figure 1 deviates from recent studies estimating the scope of jobs that can be performed by teleworking during the crisis Dingel and Neiman, [8] ; Boeri, Caiumi and Paccagnella, [9] ; jobs that allow doing some tasks from home may not be suitable to be done entirely through teleworking.

For instance, while in Sweden Interestingly, however, cross-country differences in the scope of jobs to be done entirely from home — based on occupational tasks, which may more closely reflect constraints to telework due to the nature of the jobs — are generally smaller than differences in actual telework reported in Figure 1.

This suggests that, besides the industrial structure of countries -- i. Military occupations and subsistence farmers have been excluded from the sample. In addition, occasional teleworking shown in Figure 1 appears to be much more widespread than regular teleworking.

For instance, in Germany only 12 percent of workers teleworked from home at least 1 day per week in , and in Hungary only 1 percent did so during the past 4 weeks, while in both countries almost 30 percent of workers teleworked occasionally in Eurofound and International Labour Office, [12].

Similarly for the US, while 43 percent of employees worked from home during , only 15 percent of working hours between and were performed from home Hensvik, Le Barbanchon and Rathelot, [13]. The large discrepancy between regular and occasional telework again suggests that — besides technical requirements — substantial non-technical obstacles to telework exist: most workers who could perform at least some tasks from home may choose not to do so, e.

The extent of telework also varied widely across sectors. It was most common in knowledge-intensive services, e. These differences are likely to at least partly reflect task requirements, as many high skilled jobs in knowledge-intensive industries can be done remotely using laptops, whereas a physical presence is more likely to be required for many jobs in manufacturing or, say, accommodation. Similarly, many non-market services comprise jobs for which a physical presence is an important component, e.

While the current data do not allow a breakdown by industries and occupations, future work may shed light on which types of jobs teleworked intensively in these industries. These broader patterns notwithstanding, there is substantial variation across industries within the aggregate sectors shown in Figure 2.

For instance, education and activities of extraterritorial bodies in non-market services, including international organisations such as the OECD or the International Monetary Fund, are among the industries with the highest share of telework. Similarly, in less knowledge-intensive market services, real estate activities exhibit a large fraction of people doing telework.

Although a substantial share of workers in public administration teleworked occasionally, this share still appears low in comparison to industries in knowledge-intensive market services that may perform many similar tasks.

This comparatively low share may partly reflect a larger reluctance, or fewer incentives, to adopt novel working models. The crisis may act as a catalyst especially for the public sector to adopt these measures with potentially positive spill-over effects for productivity also in the market sector.

Military occupations and subsistence farmers are excluded from the sample. Other industries include: Agriculture, forestry and fishery; mining and quarrying; electricity, gas, steam and air conditioning; water supply and waste management activities; construction. Figure A1 in the annex shows the use of telework for more detailed industries included in each sector. While the reported shares may not be statistically representative at the industry-level as a result, a comparison exercise with representative micro data from the UK has yielded a satisfactory accuracy.

There is no single authority representing both Turkish and Greek Cypriot people on the Island. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus. As mentioned above, occupations vary in their potential to telework.

Accordingly, Figure 3 confirms that the actual occupational use of telework before the crisis also varied substantially. Grouping occupations by skill content, teleworking was most common among high skilled occupations, e.

Indeed, cognitive and non-cognitive skills receive the highest returns in digital-intensive industries Grundke et al. However, continuing digitisation may further increase the range of tasks to be done remotely Autor, [15]. Telework was lowest among low- and medium-skilled workers, comprising occupations with many tasks requiring a physical presence, e.

Yet, among selected medium- and low-skilled occupations telework was in fact relatively frequent, notably market-oriented skilled agricultural workers or street vendors, which may reflect a high share of self-employed doing telework. Nonetheless, the overall high share of telework in high skilled relative to medium and low skilled occupations suggests that, in the absence of targeted measures to reduce gaps in the ability to telework, more widespread telework could exacerbate disparities in working conditions in the long-run.

Figure A2 in the annex provides shows the use of telework by 2-digit ISCO 08 occupations included in each skill group. The reported shares may not be statistically representative at the occupational-level as a result. The general pattern of actual telework across occupations roughly fits the rankings by scope of occupations to telework during the crisis, such as those reported by Dingel and Neiman [8] — consistent with evidence that some occupations are intensive in tasks that are particularly prone to telework.

However, it is important to note that the suitability of an occupation to be performed through telework during the crisis is more stringent than the requirement to perform some of the tasks through telework; as occupations comprise a range of different tasks, some of which can be done remotely and some which may require or benefit from physical presence, many occupations that cannot entirely be done through telework are nevertheless fit for regular or occasional telework, e.

In addition to differences in telework across countries, sectors and occupations, also differences across firms may indicate which factors are conducive to telework in ways that can affect productivity.

TBW can be seen as a prerequisite for telework. Similar to telework, TBW implies giving up control over working time and assessing worker performance solely based on their outputs Viete and Erdsiek, [18]. Firms using TBW may therefore be more likely to use telework. In fact, for — when information on telework and TBW are available for Germany — there is a positive and significant correlation between using TBW and teleworking from home correlation coefficient 0.

Figure 4 shows that the use of TBW is more widespread among the most productive firms, which are almost twice as likely to use TBW as the least productive firms. Importantly, however, these results do not indicate that firms are more productive because they use TBW; productive firms may share characteristics, such as using advanced management practices, which raise productivity and make it more likely to use TBW. Results do show however that the use of TBW is compatible with high performance.

Note:The figure shows the difference in the share of firms using trust-based working time arrangements TBW between each productivity group and the bottom decile of the productivity distribution as percentage of the share in the bottom decile. Productivity groups refer to low-medium th decile , medium th decile , high-medium th decile , and frontier 10 th decile. Deciles are based on annual productivity distribution within STAN A38 industries, excluding agriculture, forestry and fishery, financial and insurance activities, and public sector.

Productivity is measured as 3-year backward moving average based on gross-output per worker. Results show unweighted average of shares across years and industries.

TBW is also more common among larger firms. Figure 5 shows how much more likely medium and large firms are to use TBW compared to small firms with otherwise similar characteristics, i. For instance, large firms are almost 20 percentage points more likely than small firms to use TBW.

This large effect may reflect a number of features associated with firm size and not included in the model, e. Figure 6 shows that firms with younger and more skilled workers and managers are more likely to use TBW.

For instance, replacing 10 percent of workers who have medium skills with high-skilled workers increases the probability to use TBW by about 2 percentage points; similarly, replacing 10 percent of managers who are middle-aged with older ones decreases the probability by 0.

The link between skills and TBW is in line with the fact that telework is more common among higher skilled professions e. Eurofound and International Labour Office [12].

This may reflect that higher skilled workers on average may be better able to work independently, or that they may better engage in creative tasks in a flexible working environment. Similarly, highly skilled managers may be more prone to allow TBW as they are better able to implement it successfully, e. The fact that TBW is less common among firms with a higher share of older workers may reflect their reluctance to deviate from traditional working models, or that older workers are less likely to possess the ICT skills necessary for telework.

It may, however, also reflect differences in preferences, as competing tasks — and demands for better work-life balance — may be particularly pressing among young and middle-aged workers, e. Note: The figure shows the expected marginal changes of probability of using trust-based working time arrangements when firm-size increases relative to small firms. Firm size groups comprise small employees , medium and large or more.

Results are based on a linear probability model of TBW use at the firm-level, controlling for log productivity, skill, age and gender composition of managers and workers respectively, share of part-time male and female employees, manager share, manager remuneration, firm-size and -age, and industry-year fixed effects.

All variables except TBW use and firm-age are based on 3-year backward moving averages. They can hire the best talent without regard to geography. Cookie Notice This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. I Accept Privacy Policy. Remote work offers greater flexibility, reduced commuting times and cost, and even lower child-care expenses.

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