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Alison Brook says while Covid-19 is unlikely to signal the end of the office, if working from home can improve productivity then this could be a rare positive arising from the crisis

Alison Brook says while Covid-19 is unlikely to signal the end of the office, if working from home can improve productivity then this could be a rare positive arising from the crisis
Photo by Paige Cody on Unsplash

In pre-pandemic times, working from home (WFH) on a regular basis was a perk enjoyed by a relatively small number of mainly high-paid white-collar workers.

Now that the pandemic has required a large portion of the workforce to work from home for weeks or even months at a time, companies and employees are asking if WFH is a viable option indefinitely. At its heart, the remote work debate is about productivity. Many employers have been concerned that without being monitored in an office environment, worker productivity would inevitably decline.

Understanding the impact of remote work on productivity will be essential to making balanced decisions about whether the large scale WFH experiment should become a permanent part of post-COVID work life. The productivity debate is particularly important for New Zealand, which has suffered from persistently low productivity growth for decades. This has contributed to our comparatively low wages by OECD standards and subdued economic growth. Addressing productivity will be essential if New Zealand is to pay for the economic costs of successive lockdowns and the resulting increase in government debt.

Productivity gains from remote work in New Zealand

According to Stats NZ, over 40% of employed people were able to do at least some of their work from home during the lockdown in April and early May. Half of those workers had not done so previously.

The early indications are that productivity has not suffered from the experience. A University of Otago online study of 2,595 New Zealanders who worked from home during lockdown indicates that most people (73%) believed they were at least as, if not more productive than usual. An overwhelming number (89%) also wanted to continue WFH at least some of the time.

These numbers have been backed by many other post-pandemic surveys internationally, which have pointed to self-reported productivity boosts of between 60% and 75%. However, surveys since the pandemic are likely to have all sorts of bias, which are not reflective of more “normal” times. Workers after all have not chosen to WFH and may be stressed about retaining their jobs, or have health fears about returning to an office environment. However, the productivity boost from remote work does seem to be supported by research undertaken prior to the pandemic.

Previous studies into remote work

One of the most well-known studies on remote work productivity was conducted in 2013 by Stanford University working with China’s largest online travel company, Ctrip. One thousand employees of the firm took part in the research with half asked to work from home for four days a week while the rest continued to work from the office.

The results were surprising. After nine months the at-home workers were found to be 13% more productive than their office-bound colleagues. The remote workers were not only able to get more work done in a day due to fewer distractions (accounting for 4 percent of the increased output), they also worked for longer each day than their office-based colleagues (accounting for the remaining 9%).

This result was mirrored in a 2019 study by Airtasker which found that remote workers "worked 1.4 more days every month, or 16.8 more days every year" than people who worked in an office.

There is also evidence that “work from anywhere” (WFA) arrangements may offer even better productivity gains than WFH. Employees at the U.S. Patent and Trademark Office had been entitled to work from home as long as they lived within 50 miles of the office and worked from the office at least once a week. In 2012 the organisation trialled a new policy, allowing employees to work from anywhere, with no requirements to attend the office during the week. The results showed employees granted “work from anywhere” arrangements produced 4.4% more in terms of output, without a reduction in the quality of work submitted.

The downsides of remote work

There are well-known downsides to remote work – from professional and social isolation to the lack of opportunities for informal collaboration with colleagues. And prolonged WFH can also be exhausting.

Ongoing research from Microsoft Human Factor Labs measuring brain wave activity of participants concludes remote collaboration, particularly video meetings, are more mentally fatiguing than in-person collaboration. And workers who start jobs by working remotely with colleagues often find it harder to later collaborate in person.

It may also be that certain types of tasks are better performed in one or other setting. One study suggests that WFH works really well for creative tasks but productivity suffers when people performed “dull” tasks outside a more structured office environment.

Some jobs are obviously better suited for remote work but even then working from home doesn’t suit everyone. Some of those who have struggled the most over the periods of pandemic lockdown have been parents with young children and those without a dedicated home office space.

It’s also not known yet whether the productivity advantages of WFH observed since the pandemic will persist over the long term.

A flexible approach

Rather than a choice between 9 to 5 in the office or working from home full-time, it is more likely that a hybrid model will emerge at the other end. Flexibility is the key benefit of WFH for many workers. A new survey by Morning Consult supports this with the majority of respondents saying their ideal arrangement would be to continue working from home 1-4 days a week. Forty percent would work from home every day, with just 14% wanting to return to the office every day.

While the pandemic is unlikely to herald the end of the office, if productivity performance can be demonstrably improved while giving workers what they seem to resoundingly want – more flexible work options – then WFH seems like a rare positive outcome arising from the crisis.


*Alison Brook is from the Knowledge Exchange Hub at the Massey University campus at Albany, Auckland. She is on the GDPLive team. This article is a post from the GDPLive blog, and is here with permission. The New Zealand GDPLive resource can also be accessed here.

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25 Comments

15
up

flexible approach to working from home is good but this is not an answer to our poor productivity.

The answer to our poor productivity is clear as daylight to anyone who bothers to look. Fix. Housing. Investment. Incentives.

It's so clear it's shameful. We encourage investing in houses over businesses more than any country in the world. Ergo we have more of our capital tied up in housing than any other country in the world, an underfunded and minnow share market and extremely high house prices to boot - the last being a feature typically only found, ironically in highly productive parts of the world.

Capital is scarce - despite the actions of central banks. If it's funding a house it isn't funding a new machine.

We need to incentivise people to invest in our companies. We need to give them the capital they need if we want our economy to be productive. Otherwise our best companies will simply continue to follow the well trod path of setting up here, listing on the ASX or NYSE to get funding, and shortly thereafter relocating there as well.

Agreed.

We just had to tie up capital into a house/property that I'd previously been using to grow companies. The amount that we've tied up would have been much more profitable/productive than any house will ever deliver for me. Now have to build up capital again so we can invest in growing businesses.

It frustrates me that the NZ system is rigged in this way, as its such an unproductive way to use capital and grow an economy. Those that do nothing but leverage their rental properties are rewarded. Being in business and employing people is not. Needs to change.

You nailed it. Along with capital, housing also sucks in skilled labour. why do anything else other than housing investment, if there are no capital gains tax in housing. It is hard to find anyone who has been here long and hasn't "invested"in housing. Before 2017 elections, labor party campaigned on capital gains tax but Jacinda wants to be PM as long as she can and therefore, promised no capital gains tax under her watch. Talk about a progressive PM :).

Working from home improves my productivity, but part of that gain is I work more hours. Granted, still fewer than my overall commute and work time, but still more. What we need is an increase in productivity per hour worked. My personal metric for this is I am more productive at home, mostly because I talk to my colleagues less, especially the one who talks about their health issues for 30 minutes at a time despite clear signals I: a. have work to do, and b. am not interested.
So our productivity might improve, but at what cost to our social and mental wellbeing? Pluses and minuses on both sides.

I find it's quite an interesting social experiment.

After 3 months wfh I had no desire at all to go back into the office when we went to L1. Sure enough by the end of the week my manager was on the phone telling me I needed to be in the office 50% of the time.

Then L3 comes along again and oh, we need you to stay home full time again.

I'm interested to see how it pans out this time.

Good managers have no problem managing people remotely, poor managers need their minions in the office.

Personally I'd be quite happy going in about once a fortnight (max), I love wfh. No one whines about how shit the mway was even though they left home at peak rush hour, or the shit driver who didn't indicate, no one whinging about what someone in the office did 15 weeks ago...

But then who knows, I also wonder if I'd get sick of wfh and eventually enjoy going back into the office x days per week. At this stage I don't see it but it's quite possible.

Working from home long term is a nightmare and a psychological prison. How about we take it one step further and make getting out of bed voluntary?

Tried working from home over lock down, could do it 1 or 2 days a week but no more please sir. Unless I had a well equipped stand alone office down the garden or something.

Depends how you define productivity.
You might get through more work working from home, but I think there can also be some productivity loss without regular face to face engagement.
From what I have seen, you can still connect with people remotely, but the reality is it doesn't happen as much.
You also don't get the same opportunity for serendipity.

In the UK the government is trying to urge employees to return to offices because staying at home is killing small businesses. Working remotely is more likely to be counterproductive as it reduces consumer spending.

PWC estimates this is worth £15bn to the UK economy: https://www.cityam.com/home-working-could-cost-uk-economy-15bn-a-year-pw...

Urging people to keep buying over priced, cramped, central city houses on massive mortgages to prop up sandwich companies like Pret. Pret, and other such companies, should adapt to the new normal.

No. Misallocation of reward is the issue. To much tax on working. And to little on property debt speculation. Time to vote.

Vote for more reward to work...aka less tax. Transfer tax burden to land and property. Impossible to avoid.

Agreed. Vote for TOP/Greens. I know Greens are hard to love with all their radical 'shut down everything now' policies but they've been very persistent in their demand for future coalition partners to introduce a wealth tax.
I own a couple of properties and have only ever voted centre-right but the long-shot chance, no matter a bit unlikely, to bridge the wealth gap in NZ and to raise enough taxes to fund our recovery and future prosperity is tempting me to give the Greens my party vote.

Please point me to Greens policy that says they will tax workers less. All I see from them is more tax. Higher income tax and new tax on wealth.

Sounds like Robertson put the pre-emptive kibosh on that one

Sure as heck doesn't make me more productive, nor work longer hours.

Work/life balance has never been better though :)

The article, as is depressingly usual, fails to define the system boundaries for WFH. The author then uses an all-sectors 'productivity' which is meaningless outside those boundaries. For example, anyone involved in moving goods or people around cannot WFH. Neither can tradies, builders, plumbers, loggers, millers, farmers etc - it's a Very Long List. I suspect it's nothing more than the usual 'more Research needed - Send Munny'........

Sounds right but the way I see it, WFH has deferred the need for NZ taxpayers to pour billions into expensive transport projects for Auckland.
A case could be made to spend that amount out in other regions desperate for growth funding and perhaps on longer term productivity-boosting opportunities such as extending the trade apprenticeship programme beyond its Covid recovery span.

Not really. The congestion is back already in Auckland at Level 2.5. The transport network wasn't up to scratch 25 years ago and we've since added hundreds of thousands more Aucklanders into the mix. WFH was a temporary blip. Universities and others will be back next week. We've been plowing money into the regions at the expense of Auckland for decades up until relatively recently (think 2005) - it's how we ended up in this mess to begin with.

Haha.. farmers have been WFH well before it was called WFH.
The WFH concept is a good idea if it works for the individual and the set tasks are completed in a timely fashion. Also reduces congestion in some measurable way. Any manager who is reluctant to embrace the idea is, imo, an insecure manager worried more about his own position than any business issues.. gotta be able to see the minions beavering away

No. Farmers have been applying work at home. You ever tried to push a tractor? Pull a plough?

You have been applying finite fossil energy to farming for 100 years. Plus applying it to getting palm-kernel and phosphate from acres other than yours. Plus using it as fertilier feedstock. And baleage wrap. Many calories of fossil fuel feedstock to one produced calorie of food. A totally dead-end approach.

But it wasn't work. And any productivity was in the more-efficient use of fossil energy, totally Jevons Paradoxed out of the ballpark by exponentially-increased use.

So would it be better to advocate to go back to a more manual labour style of farming on smaller plots? A labour intensive but fossil fuel free system?

There will be more labour in the future, per produced food calorie. Can't be any other way, the FF are finite.

Yes, smaller plots. Yes to more biodiverse, more regenerative, closer to the eater, more seasonal, less monoculture/Monsanto.

I advocate (and live by) applying solar energy in the most direct way possible. It's the only source of all energy - our labour included. The more directly you access it, the less the loss.

Most direct would also apply to the source of food. No more importing bananas from Ecuador

Absolutely agree with your view on housing and productivity. I would also add that I believe that managers are hugely responsible for low productivity. We have a whole lot of low quality leaders who are badly skilled at making good decisions for the betterment of their companies. They also have an inability or lack of awareness about the need to raise the output of their team by rallying them around common objectives and drive a high level of accountability.

All too often, worker productivity (or lack thereof) is presented as a problem with labour, and the solution is to try to "fix" worker behaviour to get more blood out of the stone. In reality, it's more often than not a problem with the balance of capital to labour used in NZ businesses. A man with a hammer will never be as efficient/productive as a man with a nail gun, no matter how hard you work him.

There isn't one simple change we can make to fix the problem - we need fundamental changes to both (a) incentivise capital investment in businesses and (b) discourage over-reliance on labour.

I won't repeat buyandhodl's great comment on the need to shift incentives away from housing and toward investment in business, but that's only half the issue. The other side of the problem is NZ's total lack of overtime laws - why invest in capital if you can just get your workers to do extra hours for free? Working more hours doesn't improve productivity, it just means your workers are unproductive for longer. NZ is an outlier when it comes to overtime laws - even the US has salary caps (~NZ$52k) that must be hit before you are overtime exempt.

If we want to fix our problems with productivity, we need to free up more capital for businesses, and incentivse them to actually spend that money in a way that makes workers more productive. Otherwise we will just end up back at the same place, but with slightly happier shareholders.

Days to the General Election: 19
See Party Policies here. Party Lists here.