How productive are small businesses with a remote workforce?

There's conflicting evidence on whether the pandemic-related shift to remote work has positively or negatively affected productivity of the small business remote workforce.

On the one hand, there are studies like the Real Productivity Impact of Remote Work published by Valoir in May 2020 that show an overall minimal negative impact (1%) despite distractions and technology issues as compared to pre-coronavirus findings. And the 3,500-person (downloadable) survey by Azurite Consulting published in July 2020 that found that "employees can be more productive, more engaged, and more loyal without ever stepping foot into a physical office."

On the other hand, there are studies like the three-volume (downloadable) one by Aternity that found productivity dropped by 8.5% in Europe but increased 23% in North America.

Which view is right?

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Why some remote workers are less productive

Andres Mejer, an immigration attorney and founder of Andres Mejer Law, is squarely of the less productive view. His Mexico office showed a nearly 25% decrease in productivity as compared to before quarantine. He found there were several factors that negatively affected production:

There are more distractions at home, particularly if family is home.
With no one to see you aren't doing your work, it is easier not to do it.
Focusing is more difficult at home.
The added stress from COVID-19 decreased out-leads and business.

Director of Successful Release, Adam Sanders, also found about a 20% drop in production at the small NGO. In the office, his team relied on robust informal communication, but working remotely, his team has 25% more formal meetings.

In addition to more at-home distractions, especially for single parents who must home-school children, he notes that inferior equipment is a big problem.

He says, "technical issues pop up in at least 10% of our meetings, which [affects] focus during peak times when teams are online."

Why some small businesses show mixed results

Other businesses show both an increase and a decrease in productivity. The culture of a group and the nature of the work prove to be why Clarify Capital has some teams thriving and others lagging in productivity.

"Our sales team, as a collective group, is less productive working remotely," reports Nishank Khanna, chief marketing officer for Clarify Capital. The reason is, "our funding advisors leverage the competitive energy from one another to make sales. When one teammate closes a sale, another is motivated to do the same." The newly remote team saw a significant decline in call volume, which the company attributes to the change in workplace dynamics.

"Our marketing team, on the other hand," Khanna says, "has been operating more efficiently remotely." Khanna says the high-energy office environment is much more distracting for the deep work that requires their focus for longer durations of time. Having control over their space has created the opportunity to complete that work.

Remote working tips from thriving small businesses

Familiarity, flexibility, communication, and accountability seem to be the common threads through small businesses that are thriving with their new remote workforces.

Keep it familiar. Some small businesses are taking the to-do list, and putting it on steroids. "One of our most successful strategies for managing a remote workforce is 'four-week cycles,'" says Michael Alexis, CEO of TeamBuilding. With these cycles, he and his managers establish a list of priority items and projects that become the "must-do" list where everything must be completed by the end of the cycle. "Everything else becomes a 'could-do' or 'should-do.'" As long as all the must-dos get done, productivity is sufficiently successful to move the business forward. It's a very anti-micromanaging technique that instills trust on both sides—and works.
Keep it flexible. At other small businesses, like Slingshot, specific hours and workdays, e.g., 9 a.m. to 5 p.m., Monday through Friday, have gone out the window according to president and CEO David Galownia. "As long as our employees complete their 40 hours in [one workweek], we're good. We also offer mental health days for those who feel overwhelmed or burnt out. They can take a day to recharge." The benefits of flexibility extend beyond increased productivity, according to Charles Wang, cofounder of Bondeno. Employees are able to include exercise, have more family time, and report improved sleep patterns and eating less overall, which makes for a mentally and physically healthier workforce.
Keep communicating. Brandon Monaghan, cofounder of Miracle Brand, reports that consistency in communication has been key. "I have taken the time to communicate more with my team on an individual basis since we don't get to see each other and speak as frequently as we did in the office. As a result, I have noticed an increase in overall productivity and sales." Jase Rodley, founder and CEO of Jase Rodley, adds you should make sure to create an online space for group chatter for catch-ups, memes, and stories as a way to replicate informal communication that happens naturally in the office to keep employees bonded.
Keep everyone accountable. "We've embraced collaboration tools to help measure productivity and provide key insights," says Helen White, CEO of houseof. "The combined analytics and qualitative feedback ensure we're productive, but most importantly, expectations are managed effectively, ensuring everyone feels connected, supported, and is aligned on our company strategy."