Remote work pays off when companies invest in staff training and formal management practices, LSE report finds

UK businesses that invest in staff training and formal management practices to support remote work - such as structured check ins and virtual team building exercises - see significantly stronger productivity outcomes than companies that don’t invest in these areas, according to a new report from the London School of Economics and Political Science (LSE).

The report, Remote work and firm productivity: Which UK firms benefit and why, launched today (18 March) during an online event with the authors, provides new firm-level evidence on the adoption and reported impacts of remote and hybrid working, based on a CBI Economics–supported survey of 801 UK firms.

Remote work is here to stay

The survey shows most UK firms have kept or expanded their use of remote and hybrid work since the pandemic. Of the 801 surveyed, 707 had adopted remote or hybrid work at some stage before, during or after the pandemic.

Among firms adopting remote work, around half have either increased (30 per cent) or maintained (22 per cent) their use of remote practices since the pandemic. Around a third (31 per cent) have scaled back -typically shifting from fully remote to hybrid - while only 16 per cent have abandoned remote work altogether.

Investments in training and management practice

The survey results show investments in remote work are strongly linked to productivity impacts. Firms that regularly invest in training staff to better deal with digital technologies and hybrid work arrangements were more than twice as likely to report positive productivity impacts than those who did not invest. For example, 42 per cent of firms that provide systematic training report positive effects, compared with just 20 per cent among firms that made no such investments.

In addition, firms that have adopted at least one formal management practice to manage remote workers – such as structured check-ins, performance monitoring, adjusted KPIs, performance dashboards, team-building activities adapted to virtual settings – report more positive outcomes. It was found that 32 per cent of firms with management practices report productivity gains from remote work, against 20 per cent among firms without them.

Early adoption of remote work

Prior experience with remote work also matters. Firms that introduced remote work before 2020 show both the highest share of positive impacts (42 per cent) and the lowest share of negative impacts (21 per cent). By contrast, firms that adopted remote work in 2022 or later report double the rate of negative effects (42 per cent) and very limited positive effects (7 per cent).

The authors note that investment and early adoption are “key organisational enablers” for making remote work effective - capabilities that firms can build and develop over time.

Benefits and obstacles to remote work

More than half of firms said remote work has boosted staff wellbeing, making it the clearest benefit. Recruitment is another win, with roughly a quarter of firms enjoying easier hiring and access to wider talent pools, especially larger firms seeking specialised skills beyond their local labour market.

Among the firms that did encounter obstacles to remote working, the most frequently cited are resistance from leadership (21 per cent) and poor internet connectivity in some locations (20 per cent), both of which point to structural or organisational constraints rather than problems intrinsic to remote work itself.

A further 16 per cent of firms reported limited internal capacity, suggesting gaps in managerial or technical skills needed to coordinate remote teams. Overall, these reported barriers reinforce the broader pattern that effective remote work depends heavily on leadership support, digital infrastructure and internal capabilities.

In the paper, the authors note: “The survey highlights that remote work is not inherently beneficial or detrimental to firm performance. Instead, outcomes depend critically on how firms organise, manage and support these arrangements. Businesses that invest in management practices and staff training report far more positive impacts, while those that struggle with coordination, monitoring and company culture are more likely to abandon remote work and to experience negative effects across productivity, collaboration and innovation. These patterns underline that remote work amplifies underlying organisational strengths and weaknesses.”

Commenting on the findings, report co-author Professor Riccardo Crescenzi from the Department of Geography and Environment at LSE said: “Remote and hybrid working can deliver real benefits, but our findings show that positive productivity effects are far from automatic and are not shared equally across firms and places. For smaller businesses, the recruitment advantages of remote work are much more concentrated in London and the South East, raising important questions about spatial inequality in the UK.

“At the same time, firms report that the biggest challenges lie in collaboration, staff development and the informal interactions that often support innovation. What matters most is not remote work in itself, but whether firms have the managerial capacity, training and infrastructure to make it work effectively. That is why UK-specific evidence matters: it helps us understand what is distinctive about the UK economy and how remote work can support both productivity gains and employee wellbeing.”

Percentages have been rounded to the nearest whole number. Exact percentages are available in the report appendix.