In light of the current coronavirus crisis, many businesses have no choice but to offer far more flexible work arrangements for their employees than they did before. Working from home is currently crucial to reduce the risk of infection at the workplace and on the way to work. In many cases, allowing employees to flexibly adapt their working hours also became inevitable due to the closure of schools and childcare facilities. In this context, a study by ZEW Mannheim shows that companies can benefit from flexible work arrangements if they provide adequate digital infrastructure for their employees. Service providers that adopt flexible working models and make mobile devices like laptops or smartphones available to their employees tend to be more productive than others.

ZEW study shows that companies can benefit from homeoffice in the coronavirus crisis
Service providers tend to be more productive when they offer flexible work models in combination with equipping their employees with mobile devices.

As digital technologies evolve at a rapid pace, workers are increasingly able to work from outside of the office. Employees can only work efficiently from home if they have access to well-functioning digital infrastructure, something that is essential for many tasks. In addition to accessing e-mails, workers also need to be able to use data and software stored in the company’s internal network. In many cases, employees also require mobile devices like notebooks, tablets or smartphones for work. “These devices have become an integral part of our daily work lives. By 2014, 23 per cent of workers were already using mobile devices provided to them by their employers,” explains ZEW researcher Dr. Steffen Viete of the Research Department “Digital Economy”, who co-authored the study and is member of the scientific staff that advises the German Council of Economic Experts.

Trust-based working hours offer maximum flexibility

While the large-scale introduction of computers in the 1980s and the rise of the internet in the 1990s have already been extensively investigated, there is still little research on the productivity effects of mobile devices. According to the ZEW study, organisational structures must be adapted in order to fully exploit the benefits of mobile technologies. “Companies whose organisational structures allow their employees a high degree of autonomy can expect particularly positive effects,” says co-author of the study, Dr. Daniel Erdsiek, who also works in the ZEW Research Department “Digital Economy”, summarising a central finding of the analysis.

Employers can create more flexible work conditions in several ways, including working time (flexitime schemes), place of work (remote work arrangements), daily workload as well as continuity of work (long-term breaks, working time accounts). However, a maximum degree of flexibility is achieved through so-called trust-based working time schemes, in which workers are responsible for managing all the above-mentioned dimensions of work themselves. The shift towards these kind of work arrangements in recent years has been largely supported by the increased use of mobile devices and mobile internet.

Companies can benefit from using mobile devices

The study is based on a representative survey conducted by ZEW among over 1,000 companies in the service sector in 2015. Out of the surveyed companies, 33 per cent of workers were provided with mobile devices by their employers, and 34 per cent had an employment contract with trust-based working time arrangements. As the analysis shows, the positive correlation between the use of mobile devices and company performance is more pronounced when employees additionally have a high degree of autonomy in the form of trust-based working time. One possible explanation for this is that mobile and digital devices reduce organisational costs by facilitating access to information. At the same time, trust-based working time also provides efficiency gains thanks to the use of mobile devices. For companies that offer an average level of trust-based working time, a model calculation shows that productivity increases by 1.05 per cent if the use of mobile devices rises by 20 percentage points. If 85 per cent of employees have trust-based working hours, by contrast, the company’s productivity increases by 4.64 per cent.

The results of the study give cause for optimism with regard to the potential of remote and flexible work. “However, these findings are not necessarily transferable to the current Covid-19 crisis. Unlike the companies considered in our study, employers are currently facing the problem of having to rapidly adapt organisational structures without prior planning due to the crisis. It is therefore likely that, under the current circumstances, many companies are struggling with the task of creating more flexibility while providing the adequate technical infrastructure,” emphasises Daniel Erdsiek. Ultimately, not all tasks are suited for mobile and flexible working. “From a long-term perspective, however, the findings support the hypothesis that worker autonomy in terms of time and place could gain greater importance if firms continue to promote the use of mobile technologies after the crisis,” summarises Steffen Viete.

This article reflects the opinion of the authors of the study and does not necessarily represent the view of the German Council of Economic Experts.




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