Remote Work: The Right Response to a Labor Market Made Complex by Government

Remote work has quickly become an alternative to millennials making a living off the gig economy, thanks in part to the growth of websites like Fiverr and the big-data revolution. But as the practice became more popular and companies noticed they could actually benefit from it, many began to either send their employees home or to simply rely more on freelance workers doing most of what they were hired to do from home. 

But despite the growing reliance companies have on remote employees and freelancers, not all workers are given the freedom to dictate their own scheduling rules. That created a split in the sector, giving researchers a chance to identify which group was the most productive.

Putting Freedom to Work

Over time, employers noted that they could find talent with ease by allowing workers to take control of their labor in a more familiar setting. They also noticed a boost in productivity when full freedom was in effect, whereas giving limited flexibility to semi-autonomous employees didn’t make a big difference. Now their observations have finally been confirmed by research carried out by members of the academia.

According to a team led by Prithwiraj Choudhury, an associate professor in the Technology and Operations Management unit at Harvard Business School, employees with more flexible “work from anywhere” arrangements were 4.4 percent more productive than workers who were given some flexibility but required to live near the office.

The data differ from data used in previous studies involving employees who are allowed to work from home as researchers looked at two different categories of remote workers, making a distinction between those who are completely free to work on their own terms and those who must follow certain rules and must sometimes show up at the office. 

“While prior academic research has studied productivity effects of ‘working from home’ that gives workers temporal flexibility, ‘work from anywhere’ goes a step further and provides both temporal and geographic flexibility,” Choudhury told reporters.

And while the report found at least a few negative effects of the “working from anywhere” approach, as employees who work remotely are less likely to learn from co-workers, researchers explained that the added productivity produced by the work-from-anywhere policy could add $1.3 billion of value to the U.S. economy yearly. 

Furthermore, remote workers can help companies in other ways — especially in a heavily regulated environment, which forces many employers to cut back on staff to stay in business. 

Working From Home Equals Fewer Tax Concerns for Employers

While remote full-time workers aren’t seen the same way by Uncle Sam as contractors, it is a well-known fact that the self-employed status is appealing to both the employee and the employer. 

From the businessperson’s perspective, this means that the responsibilities of dealing with taxes related to the employee are passed on to the contractor. This shields the company from having to pay taxes in different states and makes the employee’s life easier as well, as he or she may be working for a company in an expensive state, where wages are higher while living in a more affordable state.

But these are not the only advantages to remote work. 

Technology makes everybody’s lives better, inside and outside of the office. 

With the big-data revolution helping to create the gig economy as we know it, young and tech-savvy workers realized they did not have to rely on the false sense of security that comes with an official company title, thus embracing freelance work as a full-time opportunity. 

Employers may not all realize the importance of this, as some may still believe their line of work doesn’t allow for this type of flexibility. But when you have fewer workers in-house, you also have limited expenses. 

Making a long story short, the very difficulties brought about by government and bureaucracy that made life difficult for firms in general as hiring new employees became an expensive task helped to make remote work popular.

But remote work, at least in some sectors that involve technology, marketing, and digital content, removes some of these expenses and is now allowing companies to hire more people, effectively nullifying, if you will, the influence of the government’s interference. 

The market found a way to go around the red tape. But as both employers and employees benefit from this arrangement, some legislators are already scheming up a way to make the lives of contractors and those who hire them more difficult.

Is there anything the government won’t try to ruin?

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