Daily Archives: June 1, 2012

No telecommuting, please! We’re signaling

The case for telecommuting is solid and gets more so with each new study. Here’s one from just this week showing long commutes are correlated with bad heart health, for example. But despite this large and growing pile of evidence in favor of the practice, the increasing technological feasibility of many desk jobs going virtual and years upon years of discussion of the benefits of remote work, the number of actual telecommuters hasn’t exactly skyrocketed. What’s up with that?

Some have pointed the finger at reluctant middle managers, but on EconLog this week economist Bryan Caplan reports that a new paper offers another compelling explanation. The senior paper by Georgetown undergraduate Alexander Clark, which Caplan, describes as “fascinating,” says the problem with the uptake of telecommuting is signaling. Caplan writes:

Workers physically commute for signaling reasons.  Employers can monitor your productivity better when you actually come to the office.  Workers who telecommute put themselves on the slow track to success – if they can even get hired in the first place.  To bolster this thesis, Clark analyzes the American Time Use Survey using the employer learning-statistical discrimination (EL-SD) framework.  He finds that the labor market does indeed take longer to reward telecommuters for their hard-to-observe abilities.

Caplan also offers an excerpt of Clark’s paper, which argues not only that managers fear telecommuters are shirking, making face time a signal of hard work, but also notes that showing up at the office, in essence, reaffirms a worker’s status as belonging to what amounts to the office tribe. Don’t show up and your boss and colleagues could take the move as a rejection. Clark writes:

In a recent Ipsos/Reuters poll, which questioned 11,383 people in 24 countries, about half believed that they would be at a disadvantage in earning promotions because of the lack of face-to-face contact (2012). Previous research suggests part-time telecommuters do not communicate less frequently with managers (Duxbury and Neufeld 1999). Even so, more than simple communication matters. Showing up at an office may signal positive attributes to a boss. If a boss leaves work for the day and notices an employee staying late, it could serve as a visual reminder of work ethic. Working in a shared workplace also gives greater opportunity to demonstrate cooperativeness. The employee recruitment process often emphasizes the importance of labels like “team player,” and many companies strive to create collegial work environments and attractive office cultures. If a boss were to psychoanalyze an employee’s decision to telecommute, the resulting signal likely would not be that the employee wants to use time saved commuting to put in additional work. At worst, telecommuting would be seen as an atomistic rejection of the (sometimes carefully constructed) office environment.

The effect of these signals was clear when Clark combed through the numbers. “After four years of experience, the average male telecommuter will earn about 6.9 percent less than a non-telecommuter,” concludes Clark.

Do you find the idea that signaling is at the heart of telecommuting’s anemic uptake convincing?

Image courtesy of Flickr user chidorian

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