There’s a hidden penalty to going fully remote: A ‘task tax’ that stymies company growth, report finds

Some people are more productive in the office; others insist they’re better off at home, and others still—the majority of workers—say some balance of the two is best. But in a new report, workforce management platform Rippling found companies that have committed to in-person work are growing faster than their hybrid and fully remote counterparts.

Rippling’s report, which went live Tuesday morning, surveyed over 1,200 HR, finance, and IT leaders. Nearly half of those respondents whose companies work in person reported a rapidly growing headcount. Just 39% of professionals at hybrid companies, by comparison, reported rapid growth.

One of the main indicators of growth is recruitment—a costly and ambitious undertaking for any company—and it’s a priority area for in-person firms more than their peers. But more HR leaders are putting recruitment at the forefront at in-person companies (41%), compared with hybrid firms (30%) and fully remote firms (17%).

Additionally, Rippling drew a connection between the amount of time a given administrative task requires to complete and the rate of overall growth. Taken together, these indicators constitute what Rippling calls the “task tax” on growth, and fully remote businesses are paying the most. Predictably, respondents from companies without rapid growth were likelier to say they spend too much time on menial tasks compared with those at rapidly growing firms.

Things get more stark when you break it down by company type: Fully remote workers spend 2.9 days a week on menial administrative tasks, while hybrid workers spend 2.3 days per week, and in-person workers spend just 2.1 days a week. Those differences add up quickly—and it shows how this administrative burden, effectively a “task tax” on growth, particularly impacts remote-only businesses.

Then there are the more granular differences: Over 70% of HR leaders at remote-first companies said they’re “constantly” fielding information requests. Just 53% of their in-office peers said the same. And more time is spent training and equipping managers at fully remote firms than at in-office firms, likely because workers are better able to learn by osmosis.

To be sure, flexible work can often be a godsend for improving productivity. Indeed, many workers rely on having some amount of leverage over their schedules and work location, and some won’t even consider signing on with a company that doesn’t prioritize their desires. In fact, some of the biggest productivity drains are employees who feel unappreciated or stretched too thin, and without bosses who care for them and support their needs.

“Technology integration issues impose an administrative burden on every business,” Darcy Mackay, Rippling’s senior vice president of HR and client services, wrote in the report. “While in-person teams can sometimes mask those challenges more easily with a quick or overheard conversation, remote work [eliminates] many of those work-arounds.” Any amount of task tax is costly, Mackay added, and is likely to hurt a business’s bottom line. Those who fail to address that burden “will eventually struggle to compete.”

In an office that doesn’t streamline processes—or that doesn’t permit employees to work in a configuration that makes sense for them—that tax could be just as much of a threat, maybe even more so than for the remote company that hires committed and driven workers.

This story was originally featured on Fortune.com