"Remote work is bad for productivity". I've heard this a lot from office work advocates. But is this true? And how do we know? Let's unpack this a bit.
To look at this objectively, we need numbers.
As long as you track the proper inputs & outputs, productivity can be measured.
But what numbers? Well. Here are some metrics you can use.
1. % of goals & KPIs hit each month/quarter/year
2. Revenue per employee-hour
3. Revenue per payroll-dollar
4. Individual accountability metrics
1. % of goals & KPIs hit each month/quarter/year.
I like this metric. At my last biz, we mainly operated off of the principle of "work however works for you, as long as the work gets done". Measured by KPIs & project completion. This is great in terms of progress towards stated goals which, if forecasted correctly, should directly translate into growth/revenue/cash flow. In a remote environment, it's freeing for the whole team to not have to care about clocking in & out or tracking time. Nice culture boost. But it does come with the trade-off of more granular productivity data.
2. Revenue per employee-hour.
Great for teams with hourly pay, part time employees, or lots of contractors. You'll notice this is contingent on knowing the hours your team works. This is important! If your company's productivity is predicated on delivery of hours, you need to measure and know everyone's hours. I've used Harvest to track this at different times and effectively you are directly linking your inputs (hours) to outputs (revenue). In other words, the man-hours needed to service your revenue. "Standard" 40-hr weeks = 2,000 hours per year for easy calculation on fixed salaries.
3. Revenue per payroll-dollar.
Hour tracking is great for calculating efficiency on time but of course, some time is more expensive. Senior employees, specialized contractors, etc. etc. In this case you can look at dollar yield on payroll. This effectively averages your specialized & leveraged staff across the organization and shows you how productive your team is on a dollar basis.
4. Individual accountability metrics.
I believe that everyone on your team, bar none, should have accountability metrics of some sort. These metrics should be visible to the whole leadership team, easy to find and reference, and updated as close to real-time as possible. When you run operations in this way, the office is basically a non-issue. Productivity will be measured the same way regardless of where everyone is.
Let's be honest, if someone can work half as much and get paid the same, they're naturally going to gravitate to that equilibrium. So you need proper management systems, training, and cultural habits to ensure productivity stays high. Done right... and you have a productivity BOOST, not just remote, but in the office too.