The Covid-19 pandemic forced a dramatic rush to working from home in early 2020 for many people in countries across the world. Even if only a fraction of this shift became permanent, it would have implications for urban design, infrastructure development and reallocation of investment from inner cities to residential areas. Of course, it would also have significant implications for how businesses organise and manage their workforces.
Working from home had been on the rise for some time with improvements to computers and telecommunications, home Internet connections and with more families having both parents working full time. Home working has the potential to reduce commute time, provide more flexible working hours, increase job satisfaction, and improve work-life balance. But industry leaders will only opt for this if productivity levels hold up.
Now, using personnel and analytics data from over 10,000 skilled professionals at a large Asian IT company, academics from the University of Essex and University of Chicago have compared productivity before and during the ‘work from home’ period caused by the Covid-19 pandemic.
The findings in their working paper show that total hours worked increased by roughly 30%, including 18% rise in out of hours working. Average output, however, did not significantly change.
“Up to now, most studies looking at working from home have relied on surveys with employees. However, this might be problematic, as employees might conflate output and productivity and some may overstate their productivity out of a concern about their career prospects,” explain Professor Friederike Mengel and Dr Christoph Siemroth, co-authors of the BFI Working Paper, Work from Home & Productivity: Evidence from Personnel & Analytics Data on IT Professionals.
“Our research was based on workplace analytics data and we studied the effects of the switch to remote working on employee productivity and work times. We used data from August 2019 through to August 2020, allowing us to compare productivity before and during the pandemic. We were also able to study employee performance, hours worked, networking activity, and other collaboration patterns. The company we looked at is of particular interest because the industry and occupation have been predicted to be among the most amenable to remote working.”
The decline in productivity relative to time spent at their desk affected employees in different ways depending on their characteristics.
- Employees with children at home experienced a larger drop in productivity and increased total work hours by more than those without children to compensate.
- Women fared less well than men working from home, based on working hours and productivity. However, this was not driven by the presence of children at home.
- Employees with greater company experience performed better. This may indicate that they were able to be more effective working from home. drawing on their knowledge of company procedures, and their deeper network of colleagues.
What explains the drop in productivity?
Dr Christoph Siemroth, who worked on the project says: “Our explanation is that there were more distractions at home – especially with children – and that the costs of communication and collaboration were significantly higher away from the office. Time in formal meetings increased a lot, including teleconferences and email traffic also went up. Meetings and other coordination activities appeared to disrupt “focus time” when employees were able to work without interruption. Additional evidence for this view is that employees networked less – they had fewer contacts with colleagues and business units both inside and outside the firm. Despite having more meetings, staff had fewer supervision meetings or coaching sessions.”
These findings are only for the first phase of working from home caused by COVID-19. But the reduction in personal interactions in a work place is sure to influence company bosses when planning for future work practices. And while working from home is likely to remain a feature of modern workplaces, they will be looking for ways to replicate some aspects of in-person interactions cannot easily be replicated virtually.
Foremost of these include the quality of collaboration and coaching, and “productive accidents" that arise from spontaneously meeting people (including those with whom there is not yet a working relationship).
Professor Mengel concludes: “While the average effect of working from home on productivity is negative in our study, this does not rule out that a “targeted working from home” regime might be desirable. Employees whose role allows for effective working from home or those with longer commutes might do so, while others who rely more on interpersonal interactions might return to the office, at least for a few days a week. This way, companies might be able to use the best of both worlds.”
Work from Home & Productivity: Evidence from Personnel & Analytics Data on IT Professionals
Michael Gibbs, Friederike Mengel and Christoph Siemroth, 7 May 2021