Beware, working from home has productivity pitfalls for companies

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The three great enemies of working from home.

A recent survey of mid-sized companies estimate that the productivity of customer-facing people had reduced by up to 25% as some do not have the technology to enable them to work remotely … some have sub-optimal home setups, and some have reduced availability due to childcare needs. 

Family togetherness not ideal

During the lockdowns, entire families were forced to stay home together much of the time. This not an ideal way to maintain productivity.

On that subject, worker productivity researcher Nicholas Bloom of Californian university Stanford warned: “We are home working alongside our kids, in unsuitable spaces, with no choice and no in-office days. 

“This will create a productivity disaster for many firms.”

In normal times, you might expect this would not occur but, as we shall see, it may be unavoidable for many workers.

Either way, when some of the most successful information-based organisations in the country, ones that have been tapped to lead many interagency initiatives, says they estimate a drop in productivity by up to a quarter, you really have to pay attention.

Even more so when a legion of technology vendors is pushing the line that the business case for remote working is proven.

The fact is, if businesses want to ensure their work-from-home programmes are successful, they need to consider and address a range of threats to worker productivity and, perhaps worse, workforce cohesion. 

Despite all the attention given to remote working technology, many of the factors that threaten home-based productivity are not directly about the technology. 

Fast, nation-wide internet

Much of South America like the US, has not invested in providing fast internet access nationwide. The exceptions would be Argentina and parts of Chile.

Nicholas (NickBloom is the William Eberle Professor of Economics at Stanford 

In 2015, Bloom published the results of an experiment that found a 13% increase in employee productivity at a Chinese travel company when staff worked from home.

Results showed that working from home also boosted the bottom line; that company calculated it increased profits by $2000 for every employee who did.

Like many, after Covid-19 Bloom now fully expects working from home to become, if not the new normal, at least part of the new normal. 

“I suspect almost all employees who can work from home – which is estimated at about 40% of employees – will be allowed to work from home at least one day a week,” he wrote in May.

With the pandemic, working from home has become a standard perk, like sick-leave or health insurance.

The ‘stigma’ of working from home has also finally evaporated. 

“Before Covid-19, I frequently heard comments like, ‘working from home is shirking from home’ or ‘working remotely is remotely working’.”

Employees monitored

To counter that, technology makes it easier to monitor employees.

Bloom said one senior manager had told him his company already tracked employees on measures such as the number of emails they send, meetings they attended, or documents they wrote. 

“So, monitoring them at home is really no different from monitoring them in the office,” the manager said.

To ensure productivity, work-from-home programmes need careful management.

It should be part-time, Bloom advised, with an ‘ideal’ schedule of Monday, Wednesday, and Friday in the office and Tuesday and Thursday at home. 

That was because most people need time in the office to stay motivated and creative. Face-to-face meetings are still important for spurring and developing new ideas and to maintain focus after days working at home.

“The choice of Tuesday and Thursday at home comes from talking to managers who are often fearful that a work-from-home day – particularly if attached to a weekend – will turn into a beach day,” Bloom wrote.

Working from home should also be a choice, because many people don’t want to. 

Office core to our social lives

Those who took an offer to work from home were typically older, married employees with kids, while for many younger workers, the office was a core part of their social lives.

After the end of the nine-month travel company experiment, researchers asked all volunteers if they wanted to continue working from home. 

Surprisingly, 50% opted to return to the office. 

“The saying is, ‘the three great enemies of working from home are the fridge, the bed, and the TV’ and many of [the volunteers] fell victim to one of them.”

After the less-successful home-based employees returned to the office, however, those remaining had a 25% higher rate of productivity.

Working from home is a perk, Bloom said, so those whose performance drops should be warned or recalled to the office for a time before being given a second chance.

Productivity gains

Many other studies have found there are productivity gains to be had from remote working, but only if they are managed well. Others, however, have found the opposite and that workers, not employers, bank most of the benefits.

Some types of work – repetitive call centre tasks for instance – may be more productively executed in traditional office pods than at home, others found. 

Perhaps ironically, home working can pose particular challenges for organisations that have adopted ‘Agile at scale’, which famously requires face-to-face standups and sprint team meetings.

More broadly, Bloom warned of three potentially profound social impacts from working from home.

The first was a sharp drop in the value of central city residential and office space, ending a 40-year ‘bull-run’. This would be countered by a surge in value in and around the suburbs, especially for satellite office space.

“If I were a company right now, planning the future of my office, I would be looking to the suburbs,” he advised.

Political polarisation

The second was a risk of even more political polarisation.

“In the 1950s, Americans all watched the same media, often lived in similar areas, and attended similar schools. By the 2020s, media has become fragmented, residential segregation by income had increased, and school models were starting to fragment.

“The one constant equaliser – until recently – was the workplace. We all have to come into work and talk to our colleagues.” 

Finally, in a separate post, Bloom warned of a “time-bomb of inequality”.

Only 51% of respondents to a survey during the lockdown reported being able to work from home at an efficiency rate of 80% or more. These were mostly managers, professionals, and financial workers working on computers.

The remaining near-half – in retail, healthcare, and transport for instance – cannot work remotely.

Many American workers also lacked facilities or internet capacity to work effectively from home, while others were doing so in shared rooms or their bedrooms.  

“Taken together, this is generating a time bomb for inequality,” Bloom wrote. “Our results show that more educated, higher-earning employees are far more likely to work from home – so they are continuing to get paid, develop their skills, and advance their careers.” 

Those unable to work from home were being left behind.



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