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Remote work improved business performance during pandemic, GAO says

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Remote work generally improved worker productivity and business performance in 2020 and 2021, according to a U.S. Government Accountability Office report released Aug. 11.

The percentage of workers who teleworked for most of the week more than tripled from 5.7% in 2019 to 17.9% in 2021, and those who teleworked for any portion of an average workday increased from around 24% in 2019 to 38% in 2021.

“Studies GAO reviewed found that telework generally had a positive impact on worker productivity and firm performance in certain sectors,” GAO said in a statement.

“For example, a study of a Chinese call center found that telework increased productivity by 13%. Some studies also found that telework mitigated the negative impact of the pandemic on firm performance and the economy,” they wrote. “Estimating the long-term impacts of telework is difficult, however, because some economic effects may emerge only over time.”

GAO said it looked to the American Community Survey and the American Time Use Survey to describe the trends in telework from 2010-2021, as well as the growth of telework among different sectors and by worker characteristics between 2019-2021. GAO also reviewed 44 studies to examine the relationships between telework and worker productivity and firm performance.

Generally, telework appeared to positively affect productivity, but some jobs don’t have measurable outputs so their productivity is unclear, the report authors wrote. Long-term effects are also difficult to estimate so far because some factors — such as workforce attrition, potential collaboration challenges and cost savings from reduced office space needs — aren’t fully measurable yet.

In addition, the increase in telework was concentrated among workers with higher earnings and education, as well as in certain occupations, they found. About 28% of workers in management and related occupations primarily worked from home in 2021, as compared to 7.5% of workers in service occupations.

The GAO report will be the first in a series to examine changes in telework in the U.S., as well as the effects on productivity and business performance. Upcoming reports will focus on public policies that affect telework, long-term effects and other issues, GAO said.

“For many years, employers have used telework to manage their business operations and to promote a better work-life balance for their employees,” the report authors wrote.

For the most part, hiring managers have said pandemic-driven remote work is here to stay, even as return-to-office debates continue. Talent acquisition and retention are among the top reasons for maintaining remote work, HR leaders said, along with productivity and lower overhead costs.

In fact, mandating on-site work could hurt employee retention, according to a recent report. Workers at companies with mandates said their intent to stay and productivity had decreased, while remote workers said they felt more productive.

Another study found that remote work arrangements seem to be most successful at companies that create flexible and supportive environments. Remote cultures flourished at companies that prioritized employees’ interests, provided employee independence, fostered collaboration and had flexible work policies.

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