The debate on the pros and cons of the return to office mandate has intensified, with claims that remote work is less productive. However, the narrative is flawed, and it seems the media is fixated on proving the bosses right. The study that has most often been used to argue for the necessity of employees to return to the offices is a July 2023 working paper from researchers at the National Bureau of Economic Research, which randomly assigned data-entry workers at a company in India to work either from home or in the office for eight weeks. The researchers determined that remote workers were 18% less productive than their in-office counterparts.
Where productivity numbers may be flawed
Journalists have consistently cited this study but seemingly without considering the findings behind the numbers that indicated a drop in productivity. Firstly, it is questionable to use the work of entry-level data workers—who were recruited specifically for the study—as a sample to represent the hugely varied type of employees in all industries across the world. Secondly, the measure they used for productivity was the “net speed,” or the number of correct entries the workers made per minute. Hence, the “drop in productivity” is really about how fast people could put numbers into a sheet—which is obviously not what most people do at work.
Other outlets cited a study that examined the productivity of 10,000 workers at an Asian IT-services company. The researchers estimated a productivity shortfall of between 8% to 19% from workers that started working from home. While the study’s authors found only a “slight decline in output,” they nevertheless acknowledged workers were stretching out their working hours at home, which together still curiously showed up as a drop in productivity. Here, too, are some issues with this: “Output” in this case refers to the “performance against the semi-annual goal on a key performance metric,” like the lines of useful code written by a developer. However, the actual composition of these metrics is vague and based on managers’ interpretation of their value.
A game-changing solution
As the debate over remote work continues, offshore staffing remains as a viable solution for businesses seeking to overcome productivity and costing challenges. Rob Brough, Founding Partner and CEO of Agility Staffing Services, emphasizes that two primary drivers for remote staffing are the availability to source top talent and to greatly enhance EBITDA margins. “It has become difficult to find great people so you can grow and maintain your business, especially at this time with full employment,” Brough points out. “And when it comes to margins, some businesses are under extreme pressure. For many businesses people costs are the biggest cost of doing business—is to go offshore with remote staffing.”
In the November 2023 Business Leaders Survey and Empire State Manufacturing Survey conducted by the Federal Reserve Bank of New York, for instance, the firms that indicated some source/s of restraint in their hiring plans showed that an “inability to find workers with required skills was the most widely cited factor in both survey groups. Low expected sales growth and high labor costs were also ranked as fairly important by a sizable proportion of businesses in both surveys.” The full 2023 survey results weren’t necessarily grim for US businesses and employment, but it does underscore the reasons Brough pointed out that make companies turn to offshore staffing. And this has been going on in the last couple of decades as evidenced by what his company went through back in the early 2000s.
Offshoring saves businesses
Offshoring can address these challenges, as demonstrated by Brough’s previous experience. “I had a big healthcare company based in Los Angeles. We had six accountants that just kept rolling in and out, and it was hard getting stability. And then later, the business suffered a massive margin squeeze. Our reimbursements dropped by 47%, and we had a 17% EBITDA margin. You don’t need to be a math whiz to work out that you’ve got a problem.”
After much research, he flew out to the Philippines and built out his own remote teams that became successful. “I started by employing hard to find accountants and web development staff and then began transferring jobs from my Patient Services, Patient Care, and Revenue Cycle Management areas to the Philippines as my margins were impacted by competitive bidding,” Brough shares. Eventually, he had two successful teams in different parts of the country. “In the first year, we saved $4 million. By the second year, we were saving $6 million. It was a huge deal for the business then.”
Employees where and when you need them
Today, post-pandemic, there’s a huge push-and-pull between employees wanting their staff back in the office and workers standing their ground about working from home, companies that have moved roles abroad to be performed by managed remote teams (in a providers’ office or in a shared services office) deal with less business disruption at a crucial time when businesses are still reeling from the effects of the pandemic shutdowns and struggling to regain their profits. The answer for many of these small and medium US businesses is still offshore staffing as it offers benefits like lower staffing costs, access to a global talent pool, and round-the-clock availability. Additionally, offshore staffing can be flexible in terms of length of contracts and the volume of staff, allowing businesses to scale up or down quickly based on their needs. By maximizing time zone difference, businesses can accomplish more tasks and extend their operating hours to cater to a broader customer base.
Brough emphasizes the value of working with an offshore staffing company that understands the intricacies of transferring jobs abroad successfully and operates at high-quality standards. A smaller vendor can also provide agile solutions, highly skilled teams that respond faster, and focus more on their clients compared to huge vendors juggling many commitments. Furthermore, a vendor with hands-on experience and a successful track record can address the reduced productivity issues cited in the July 2023 study.
Find success with the right offshoring partner
“The fact that I came and did this for myself, I think, makes a big difference,” Brough states. “Most companies don’t start like that, and so I really know what works. And I really understand how to transfer jobs from the US to the Philippines successfully. There’s no silver bullet in this, but I’m able to help people, especially people who have tried it and failed, or people who are brand new to remote staffing and need some guidance. And I like to work with all of my clients in order to make sure they’re successful. The second thing is we work to ISO standards, so we have a very high-quality operation. We do extensive documentation for our clients. Over the first six weeks or so as they’re being trained, my QA people sit in, we write up detailed work instructions so that we can take that training burden away from the client as they start adding staff. And that makes a big difference as well.”
Productivity issues will always be a part of running a business. It is true for remote workers as it is for in house staff or internal employees. For companies that experience the pinch especially in the midst of the return-to-office issues and the evolving business landscape, offshoring company roles to managed remote teams is a solution that clearly works. Gaining a competitive advantage and driving growth in a cost-effective manner is achievable beyond emerging work cultures.
Rob Brough is the co-founder and CEO of Agility Staffing Services. Together with his other company, the healthcare-focused Healthscope Services, he has over 13 years of experience in the offshore staffing field and continues to help businesses succeed. His remote teams can deliver up to 70% savings in staffing costs, with an annual churn rate of less than 3%. Agility and Healthscope have offices in Manila and Pampanga in the Philippines, currently serving clients in the US, Australia, and New Zealand.
References:
Business Insider: The fight over return-to-office is getting dirty
Regional Analysis: Supplemental Survey Report, November 2023