The True Cost of Outsourced Staff that Work From Home
The COVID era… The two-plus years where I earned platinum status at Dan Murphys and the time that transformed the way we work. Several years on, the globe is still feeling the impact but in other ways than we would have thought. In the thick of it, we were all working from home, schooling from home and the 4 walls of our homes became our daily reality.
It has transformed the way we work, and for Affordable Staff, it meant many people finally got how outsourcing works. As we emerged from the slumber of COVID, it created a new series of challenges with one of the biggest being the work from home work model. Before COVID, it was the norm to work in the office or, as we’d call it, the whole 9 to 5, Monday to Friday gig.
Post-pandemic, some businesses thought it attractive to consider a work from home model, considering cost cuttings of around 15% added to their profit margin in savings from rent alone, without including other costs like utilities. This, combined with workers refusing to come back to the office and the threat of having to replace staff, meant the idea of work from home just became a thing.
However, the work from home model has brought about a host of new challenges, with the most prevalent ones revolving around the effectiveness of remote workers and the escalating threat of cyber security. I want to delve into these issues and underline how we’ve found our staff in the Philippines working from home (WFH) to be 43% less productive than their work from office (WFO) counterparts.
I’ll Just Put on a Quick Load of Washing
It’s pretty common to put on a load of washing or get dinner started if you’re working from home and you don’t really think much of it, yet according to a study performed by Airtasker, people working from home spend an average of 27 minutes a day during work hours to perform household type work. That’s 1.5 hours a week, just under 80 hours a year and is a considerable loss of productivity and cost for their employer.
Additionally, a study from Cord Cutting shows that 33% of remote workers stream TV shows and Movies while working. Why? Well, why not? No ones watching and it’s not causing any harm, right? Well, this same study shows people working from home take more paid breaks on distractions like catching up on their favourite TV show.
This doesn’t even include the massive time killer, social media. A recent study by PCIEERD showed Filipinos spend around 4 hours and 15 minutes per day on social media, ranking the Philippines as one of the highest daily users of social media. High social media usage among remote employees can be problematic for employers as this high level of social media usage directly impacts productivity, especially in a WFH environment as there is no moderation on accessing their devices.
Finally, a study by Digital.com reported that 54% of remote workers felt more distracted at home, with family interruptions being a significant factor. The presence of children, partners, parents, grandparents, next door neighbours, friends, extended family members or pets can frequently interrupt work tasks, leading to reduced focus and efficiency.
These points can blur the lines between personal and professional time, making it harder to maintain a productive work environment.
Even within our organisation, we had team members approach their clients to explain why they would be more productive if they were able to WFH whilst at the same time raising a young toddler. As a parent of two beautiful children, I have first-hand experience of the greatly reduced amount of work you can achieve when you have kids around you and how it can impact a productive work environment.
Work From Home Staff are 43% Less Effective
I want to take a moment to share our first-hand experience comparing WFH and WFO. For over a decade in operation, Affordable Staff have always strived to provide the best service to our clients and the best working environment for our employees. Our team are very important to us, and we want them to succeed. The more equipped they are for success, the more our clients will want to work with us and the more sustainable our business model will be.
Within the business, we use a series of tools to track the effectiveness of teams in different work environments. One of these tools is Hubstaff, which is used to track time and productivity levels. The graph below is from June 2020 to January 2023 and summarizes hundreds of team members across the organisation during this time.
The two lines on the graph show WFO as the blue line and WFH as the orange line. The spread of people working from home vs. working in the office was fairly evenly balanced until January 2023, when we stopped tracking the data, with the majority of staff already working from the office. Productivity levels are measured based on the team members physically working, meaning if they logged into a project and were doing nothing, it would measure as 0% Productivity.
Should WFH be totally abolished? Of course not, and I’m by no means suggesting it doesn’t work for specific industries, especially creative industries. It is also important to acknowledge that some roles and people are perfectly capable of a WFH environment. Yet our overall data of hundreds and hundreds of people shows that the type of tasks we perform for clients (mostly clerical) is more of a rarity than commonality.
What is truly interesting about this graph is the clear gap between people WFH vs WFO, and it is one of the most significant driving factors (combined with the heightened risk of cyber-attacks) that we decided to bring all team members back to the office.
In fact, this data showed that people with WFH were less effective than people with WFO, initially around 12% less effective and over time, as employees' distractions became more habitual, they increased to become 43% less effective than people working in an office environment. To be clear, when I say habitual, I am referring to the distractions that initially started as an occasional distraction over time and became daily distractions that would directly impact efficiency and be very noticeable in an individual's performance.
With this knowledge, we could not, in good conscience, provide the level of service we’ve become accustomed to delivering.
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The final nail in the coffin was around the number of people we referred to as ‘Naughty Kids’. These were people that would abuse the trust of WFH and simply do... Naughty Things. This was rampant during the pandemic, and I believe it’s still common for people who are working from home and impacting their clients by being up to 43% less effective. This behaviour not only undermines productivity but can also tarnish our entire outsourcing industry, a concern we all share.
For some context, examples of Naughty Kids (of true stories) WFH include:
Or, as it happened with Wells Fargo (a renowned US bank) recently, staff installing mouse movers to fool bosses while actually not working.
In the instance of Wells Fargo, their WFH staff purchased a ‘mouse jiggler’ (there are tons of similar gadgets on Amazon with thousands of reviews, specifically discussing how to use the jiggler to fool your boss) to make it appear as if they were working when, in fact, they were gaming the system to the disadvantage of their employer. In this instance (and rightfully so), these team members had their employment terminated, and I think it goes without saying this type of behaviour is not acceptable, yet the data clearly states that given the opportunity, certain individuals will take advantage of their situation.
This also supports a WFO environment where people can work in a more conducive work place where temptation is removed.
Let’s Wrap This Up
Ok, I’ve shared a bunch of data and stats. I’ve shared our own real-life story that has literally taken years to compile, and moving forward from that journey; I’m genuinely proud of what we have built at Affordable Staff. I'm proud of our team of incredible individuals who are the backbone of our business. I also want to make it clear this isn't targeting one individual or group; it is a compilation of research and our own data. When we work with clients and employ offshore staff, we want the best opportunity for it to work for both parties.
I wonder if other outsourcing companies have completed that same research, and if they still offer WFH, do you think you’re offering the best service to their clients and support to their staff? Of course, the WFH model is cheaper on their bottom line, yet they simply can't protect their team and offer as solid a solution to clients at the same level as WFO.
We have a bunch of super smart people (way smarter than me) who have been able to compile data like this and help us navigate through our Outsourcing Journey. I trust that the information I have shared will give you one side of the story.
I admit, based on my position within my business, I am biased, and I come to you from my biased position by looking at all the facts (I’m very much a ‘facts don’t care about feelings’ kind of guy) available to me and looking to the best interest of our clients and our teams to ensure we are providing them with a sustainable outsourcing experience. By looking at our own internal data and the sweat and tears from our management team during this time working with ‘Naughty Kids’ I will leave you to make your own conclusion on whether WFH is still a viable option and appreciate any constructive feedback.
References:
CEO at StaffWiz | Staffing & Recruiting Solutions | Outsourcing | Virtual Assistant/Staffing | Workforce Management | Driving Business Success with Innovative Strategies
2 周David, you’ve highlighted some critical considerations when evaluating the cost of outsourced and remote staff. The hidden costs you mentioned, such as training and integration, often go overlooked but can make a big difference in the overall value of outsourcing. This article provides a thoughtful look at the true costs involved—very helpful for companies planning to go remote or outsource!
Human Resources Professional
4 个月Well put, David. IMO, more than productivity, I'd be most concerned about data security, especially for processors of sensitive and personal information.