One of our engineers, Paddy Steed, wrote a series of articles on how we each use a Yubikey for SSH, UTF 2FA, and access to 1Password on shared machines when we pair-program. The SSH key is generated on the Yubikey, so it never touches your machine's filesystem.

http://www.engineerbetter.com/blog/yubikey-all-the-things/

http://www.engineerbetter.com/blog/yubikey-ssh/

http://www.engineerbetter.com/blog/yubikey-static-secret/

http://www.engineerbetter.com/blog/yubikey-2fa/