Working from home makes people more productive: Study

A new study indicates that the work-from-home boom will raise productivity in the US economy by 5 per cent, mostly because of savings in commuting time, while the adoption of new technologies will yield lasting gains. PHOTO: BLOOMBERG
A new study indicates that the work-from-home boom will raise productivity in the US economy by 5 per cent, mostly because of savings in commuting time, while the adoption of new technologies will yield lasting gains. PHOTO: BLOOMBERG

NEW YORK • The great work-from-home (WFH) experiment occasioned by the Covid-19 pandemic has divided opinion in the corporate suite and sparked endless debates about whether employees work as effectively from the kitchen table as they do from the office.

A new study finds that remote work does indeed make people more productive.

The WFH boom will lift productivity in the United States economy by 5 per cent, mostly because of savings in commuting time, the study says.

The findings suggest the rapid adoption of new technology amid the pandemic will offer lasting economic gains, helping to boost sluggish productivity that has long weighed on global growth.

Not everyone is a fan of remote work. Goldman Sachs Group chief executive David Solomon has called the new arrangements "an aberration" that the investment bank will "correct as quickly as possible", arguing that it is especially crucial for new recruits to absorb the Wall Street culture.

In contrast, Facebook chief executive Mark Zuckerberg says the ability to hire engineers far from its main offices has opened up new talent pools, and many employees will continue working remotely after the pandemic - at salaries more in line with their new locations.

The study polled more than 30,000 US workers to gauge whether arrangements that began as a stopgap will endure once infections have subsided. The research found that 20 per cent of full workdays will be from home after the pandemic, compared with just 5 per cent before - but far less than at the height of the crisis.

The findings come as companies around the world continue to announce WFH arrangements, shedding downtown office space.

HSBC Holdings announced it was scrapping the executive floor of its London Canary Wharf headquarters, turning top staff's private offices into client meeting rooms and collaborative spaces.

Twitter has said its staff can continue working from home permanently.

The experience has aggravated economic and racial fault lines in the US, given that many lower-paying jobs - in food preparation and other essential industries - cannot be done remotely, potentially placing those workers at greater risk of Covid-19 infection.

  • 30,000 Number of US workers polled in the study.

    20% Proportion of full workdays that will be from home after the pandemic.

The WFH benefits "will accrue disproportionately to the highly educated and well paid", the study notes.

Remote work once might have been a career killer: A British government study of the years before the pandemic found that people who worked from home were far less likely to be promoted.

But Covid-19 has reduced the stigma that comes with logging in from home, the study found.

A better-than-expected experience, technological innovations and investments as well as lingering fears of crowds and contagion will bolster the new working models, according to the research.

The paper was co-authored by Professor Jose Maria Barrero of the Instituto Tecnológico Autónomo de México, Professor Nicholas Bloom of Stanford University and Professor Steven J. Davis of the University of Chicago Booth School of Business and Hoover Institution.

"Our data on employer plans and the relative productivity of WFH imply a 5 per cent productivity boost in the post-pandemic economy due to re-optimised working arrangements," the study points out. "Only one-fifth of this productivity gain will show up in conventional productivity measures, because they do not capture the time savings from less commuting."

BLOOMBERG

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A version of this article appeared in the print edition of The Straits Times on April 23, 2021, with the headline Working from home makes people more productive: Study. Subscribe