One surprising secret of improving productivity

Employers have often looked askance at people who don't want to work too far from home, but now data shows that there are sound productivity reasons not to have too long a commute.

A study by International Workspace Group and sustainable development collective Arup has found that employee productivity increases by 11% when people work closer to home. Why? Because when people save a significant amount of time travelling between home and work, they turn around and spend up to 40% of that time saved on getting additional work done.

This adds up to as much as 170 extra productive hours per person per year, or most of a working month.

In addition, employees who have the option to work closer to home are 20% less likely to quit, partly because they  are incurring lower costs and partly because the time saved on commuting means they have more ability to attend to personal matters.

The study further quantified the gains financially, using average commute time in several different locations as a basis.

In the US, companies can gain up to US$138 billion per year in increased productivity by 2030 and $399 billion per year by 2045, while workers can save over US$30,000 per year.

In the UK, companies can gain £15 billion per year by 2030 and £29 billion by 2045, while workers can save £13,188 per year.

In Singapore, companies can add S$5.4 billion per year by 2030 and S$140.3 billion by 2045.

In other countries where commute times can be significantly longer due to traffic conditions or just geographic spread, some gains could potentially be even higher.

These productivity gains alone form a convincing argument for a hybrid working model that utilises local/satellite offices or coworking spaces, according to the study. This does not yet factor in cost savings related to moving the business operations from expensive central locations, to more affordable satellite locations closer to residential communities. The study also estimates such reduced portfolio costs to be in the range of billions annually.

Katie Randall, leader of city economics and strategy at Arup, commented on the findings: "Hybrid models can be a catalyst for both personal and economic growth. Empowering employees to choose flexible, local workspaces not only sharpens concentration and reduces commuting stress but also fuels a culture of satisfaction and loyalty. The ripple effects are profound: companies see stronger performance, communities thrive with new business hubs, and the global economy stands to gain significantly."