Is remote work more effective? 7 key benefits for companies

Remote and hybrid work environments have dramatically reshaped our understanding of the traditional office and typical workday. Once a luxury or exception, remote work has rapidly become the norm for many organizations worldwide.

However, the benefits of remote work extend beyond cost savings. It’s deeply intertwined with staff motivation, productivity, and employee retention. In some cases, working from home has proven to be more effective than conventional office work.

The advantages of remote work are numerous and impactful, from enhanced productivity to tapping into a broader talent pool.

In fact, 91 percent of employers recognize that offering increased workplace flexibility is important to attract and retain talent—even though some of those same employers incorrectly assume that remote work negatively impacts productivity, culture, training, and other concerns.

Supported by up-to-date data from our 2023 State of Remote Work Report, let’s explore the challenges of remote work arrangements, how to best navigate them, and how compensating your remote workers is much easier when you have a software system like Payscale to help.

9 benefits of remote work for companies

The digital revolution has revamped the tools we use at work and significantly altered traditional workplace dynamics. Tools like Payscale’s MarketPay are available to help you analyze data and manage surveys, AI bots like ChatGPT can help draft company blogs and marketing materials, and video conferencing platforms like Zoom have made collaboration easier than ever.

In a similar vein, the advent of remote work is a prominent example of how this transformation reshapes the corporate landscape. While many employees have expressed appreciation for the flexibility and work-life balance that remote roles offer, it’s essential to underscore that large and small businesses also witness various advantages from this shift.

Let’s look at some of the core benefits organizations have realized from embracing remote work:

Growing employee retention

According to our State of Remote Work report, organizations that mandate a return to the office risk losing their higher-paid employees. These employees are typically more experienced and have more unique skill sets, making them expensive and difficult to replace. By offering remote work, companies can save money on recruitment and onboarding for highly skilled positions.

Even beyond those higher-paid positions, our report showed that there is a correlation between the autonomy to choose when to work from home and retention. Employees who cannot work from home are 14 percent more likely to seek new employment, and employees who permanently work from home are 13 percent less likely to leave.

Interestingly, employees who can work remotely as needed, expressing control over their day-to-day working environment, are 32 percent less likely to leave their jobs, making them the least likely to seek new employment.

While this is a strong argument for hybrid work environments that balance the benefits of an in-office culture and work-from-home convenience, it does show that providing remote work in some form can greatly influence retention—saving your organization valuable time and money.

Improved performance

Remote workers often seem more committed to hitting their targets, regularly exceeding standard expectations. The comfort of personalizing one’s workspace at home makes a huge difference. Choosing an ergonomic chair or controlling room lighting pushes one’s efficiency a notch higher.

More importantly, skipping a busy daily commute allows employees to start their day fresh without the fatigue of traveling. This renewed energy translates to a better mood, leading to better results.

Additionally, the trust and autonomy of remote work often empower employees. When organizations trust employees to get the job done no matter where they are, this trust often fuels a sense of responsibility, encouraging employees to deliver their best. Thankfully, this trust is not uncommon: our report showed that 84 percent of organizations say their executive leadership trusts employees to work from home, at least for select employees.

The research backs it up, finding that remote workers feel more productive when working off-site. So, it’s not just the employees who are benefiting. Employers get to see improved outputs, making it a win-win situation.

While some organizations may believe that remote work is the reason for the decreased productivity seen in data from the U.S. Bureau of Labor Statistics, it actually ranked second to last in the explanations from respondents in our State of Remote Work Report.

In reality, employers cited high employee turnover—which remote work can actually help alleviate—and insufficient pay as the most likely reasons for this productivity decline.

It just goes to show that pay is powerful. Getting pay right with relevant, validated salary data and industry-leading, AI-powered compensation software from Payscale can help boost your employees’ productivity whether they work in-office, at home, or in a hybrid work environment. From pay transparency to compensation planning, a comprehensive and mindful compensation strategy is an effective way to build a motivated workforce.

Increased productivity

Data showed a 47% increase in worker productivity in 2020 compared to the previous year. Better work hours and more comfortable workspace environments are primary factors in the increase. A flexible schedule allows employees to enjoy a better work-life balance, often resulting in increased productivity.

More access to top talent

Our Status of Remote Work report showed that 91 percent of HR leaders believe that offering workplace flexibility is a crucial component for attracting talent. Because high-performing employees are 400 times more productive than average performers, attracting top talent can significantly enhance your company’s bottom line. After all, profitability is a measure of efficiency.

In addition to remote work being a differentiating benefit to attract and retain talent, it also gives HR teams a broader talent pool to choose from, allowing them to hire talent from anywhere in the world.

Then, tools like Payscale can help HR professionals seamlessly create compensation plans for distributed teams to fairly compensate their remote employees, making remote work easier to implement within their organization while contributing to higher employee retention.

Enhanced communication and collaboration

Our State of Remote Work report showed that many organizations require employees to come into the office at least some of the time in order to build or maintain their company culture or connections and to facilitate collaboration. However, this reasoning may be misguided.

Contrary to popular belief, remote work fosters better communication. Tools like Zoom, Slack, and Microsoft Teams have bridged the gap. In fact, 82% of remote workers feel more connected to their colleagues when using collaboration apps rather than communicating in an office environment.

Decreased absenteeism

Remote work reduces the number of sick days and unexpected leaves. Decreased absenteeism also provides employees with a proper work-life balance and enhanced job satisfaction, making them more productive during work hours. Overall, working remotely from home reduces stress and produces fewer distractions, contributing to the well-being of employees and employers.

Larger cost savings

With fewer employees needing in-person office space, utilities, and other resources, organizations have witnessed significant cost savings. Organizations allowing remote work save an average of $11,000 per remote employee annually, and our State of Remote Work report showed that cost savings from commercial real estate or office equipment was the third-most cited reason for organizations to offer remote work.

Remote work also saves on real estate, relocation costs, cleaning services, office equipment, and tax considerations, resulting in lower costs overall.

Heightened employee engagement

In the workplace, engagement goes beyond employee happiness. We’re talking about someone genuinely invested in their job and the organization’s goals. Thankfully, remote work significantly boosts this engagement.

Employees get to draft their schedules, fitting work around when they feel most productive. This sense of control makes one feel more connected to one’s job. A healthier work-life balance, often a byproduct of remote work, leads to better mental well-being.

When employees feel good, they’re more likely to engage deeply with their work. Distractions from office politics? Reduced. The feeling of being valued because the organization trusts you to work independently? Heightened. All these factors combined create a potent recipe for increased engagement. Remote work is an effective strategy for organizations who want to get the best out of their employees.

Reduced environmental impact and carbon footprint

Remote work offers significant sustainability benefits as well. According to Global Workplace Analytics, full-time telecommuting decreases yearly highway driving by over 119 billion miles, significantly reducing greenhouse gas emissions.

Minimizing the need for traditional office space means less demand for real estate and related resource consumption. Additionally, a geographically unrestricted work environment means organizations are able to hire from any time zone, eliminating the environmental costs associated with employee relocation and long commute times.

Embracing the ecological advantages of remote work positions organizations as eco-friendly leaders, resonating with a generation that values sustainability.

While full-time remote work offers various benefits, there’s a unique allure to part-time online jobs from home. Often seen as side hustles, these roles are gateways to flexibility and financial bolstering. They allow individuals to work around their primary commitments, offering an opportunity to supplement income without the constraints of a 9-to-5 schedule.

Beyond the financial perks, these positions are a playground for skill enhancement, testing potential career shifts, and networking. Part-time online jobs are an avenue for extra earnings and a versatile tool for personal and professional growth in the digital age.

Embracing the remote work trend is not just about staying current but tapping into all the benefits that significantly boost an organization’s bottom line and employee satisfaction.

Challenges of remote work

While the benefits of remote work for employers have been well-documented, it’s not a one-size-fits-all solution. Remote work comes with its unique set of challenges. Recognizing these potential pitfalls is the first step toward addressing them, ensuring that the remote work model remains beneficial for everyone.

Here are some “work from anywhere” challenges that organizations encounter when transitioning to or maintaining a remote work environment:


Popular communication tools like Zoom meetings and instant Slack messages only somewhat replace the nuances of in-person conversations. You risk misinterpreting messages when you remove the non-verbal cues of face-to-face discussions.

Moreover, missing the spontaneity of quick chats near the water cooler or spontaneous brainstorming sessions often means missed opportunities for collaboration and innovation.

Long work hours

The boundaries that once separated work and home are becoming increasingly hazy. While some hail remote work for its increased productivity, it comes with the caveat that many work beyond their regular hours. With the buffer of a commute, workers sometimes put in extra hours, potentially risking burnout.

Increased workload

The expectation to consistently deliver high productivity levels and the relative calm of a home office setting puts undue pressure on remote workers. While there are fewer traditional office distractions, the weight of additional tasks becomes overbearing.

Without careful management and regular check-ins, this situation rapidly results in burnout and decreased morale.

The need for evolving pay management practices

Organizations need to consider a clear plan for managing pay for remote employees to support geographic-based pay. Our State of Remote Work survey showed that 86 percent of organizations have not significantly changed their pay methodology to support remote work, although more remote-first and fully remote organizations have made an effort to keep up with these changing needs.

30 percent of employers pay employees based on the location of their headquarters instead of the employee’s location, which is actually 7 percent fewer organizations who are structuring their pay in that way than there were during the pandemic. However, the income needs of employees in large metropolitan areas are different than the needs of employees in more affordable locations.

While there are many different approaches to consider regarding pay management for remote workers, geographic pay differentials may help you retain employees by getting pay right.

Our geo differentials data supports compensation strategies for remote work, and Payscale’s services are able to help turn this once-time-consuming undertaking into a smart, timely, and quick process.

Even if you choose to forgo a geographic pay strategy, it’s vital to be transparent about how you pay your employees so they understand why and how their pay is fair in the context of market conditions.

Feelings of isolation

Human beings are inherently social creatures. Shared office work often contributes to a sense of belonging. Remote teams are sometimes deprived of these. Over time, this lack of socialization leads to isolation and detachment, with employees feeling out of the loop or disconnected from the organization’s culture.

Difficulty maintaining work-life balance

Remote work appears to be the ultimate solution for achieving a balanced work-life dynamic. The flexibility it offers is undeniably attractive. However, there’s a hidden challenge many remote workers grapple with: the blurring boundaries between professional and personal life.

Imagine wrapping up a day’s work and being just a few steps away from your bed or family. With the workspace so intricately woven into the living space, it becomes increasingly challenging for employees to mentally clock out.

This continuous proximity to work tools leads to an always-on mentality, where employees often feel they’re perpetually on the clock. Over time, this erodes the idea of home as a sanctuary of relaxation.

The thought of pending tasks can disrupt moments of personal downtime, affecting peace, family interactions, and self-care routines. This fusion of work and leisure spaces challenges the traditional notion of work-life balance, demanding more intentional efforts to draw boundaries and prioritize personal well-being.

While remote work offers numerous advantages, employers need to tackle the challenges as well. Organizations promote a harmonious and efficient remote work environment by addressing them proactively through clear communication, setting boundaries, and offering support.

Final thoughts

The rise of remote work was particularly intensified by the pandemic, and it has undeniably redefined the modern workspace. Our Remote Work Report showed that 47 percent of the population expects more organizations to continue offering remote work in their field post-pandemic, a number that has continued to grow since 2020 — while 0 percent of respondents thought remote work options would decrease.

As discussed, the benefits of remote work are profound, from tapping into a broader talent pool, eliminating daily commutes, and offering flexible work schedules to witnessing higher productivity and substantial cost savings.

However, the paradigm shift from traditional office work to a remote workforce is challenging. Miscommunication, feelings of isolation, and potential burnout underline the need for a well-structured work-from-home arrangement. It’s essential to be aware of these potential pitfalls to ensure employee well-being and maintain the work-life balance that remote jobs promise, and it’s important to use tools like Payscale to help make the transition to remote work as easy and efficient as possible when it comes to compensation.

Choosing to embrace remote work is more than just adopting a trend. It’s a commitment to evolving and recognizing the organization’s and its employees’ needs.

While the benefits of remote work for organizations are significant, success in this arena requires a well-thought-out plan. Employers must address challenges head-on, harness the advantages of remote work, and prioritize the human element, ensuring that the workspace — on-site or at a home office — is conducive to growth, satisfaction, and productivity.

As we move forward, the landscape of work will continue to evolve. Integrating remote work is a testament to this change, representing a bridge between the traditional and the future of work. Organizations that understand and navigate this balance position themselves for success.

Worried about your remote employees?

In an era when remote work is becoming the norm, ensuring that your remote employees are compensated fairly and competitively is paramount. Addressing pay discrepancies, especially with employees scattered across various locations with differing cost of living considerations, takes time and effort. That’s where Payscale comes into play.

Payscale offers comprehensive solutions tailored for businesses with remote workers, like:

  • Location-based pay solutions: Geographic discrepancies significantly impact an employee’s compensation needs. A developer in San Francisco has a different cost of living than one in Boise. Payscale’s location-based pay solutions account for these differences, ensuring that employees are paid appropriately for where they live and work.
  • Compensation planning software: Crafting a compensation strategy for a remote workforce is intricate. Payscale assists businesses in planning their compensation packages, considering various factors like job roles, industry standards, and geographic considerations. Our expert insights and analytics-driven approach give organizations the confidence that their remote employees are happy and competitively compensated.

If you’re keen on effectively navigating the complexities of compensating a remote workforce, consider Payscale as your trusted ally. Request a demo to see the effectiveness of our offerings and how we tailor them to your organization’s unique needs.