Does working from home really work? Revisiting the positivity about WFH productivity
The great migration from the office to home, ever so gently forced by a worldwide pandemic, seems to slow down. Winter is coming, and employees are hastily looking for warm places to hide from the cold. With the current energy prices, that place is not necessarily at home. But if we believe the majority of the COVID-19 reports, this migration back to the office will harm overall productivity: working from home was often preferred and people often reported to be even more productive compared to the office. Should employers, post-COVID, instead of providing an option to work from home, force people to work from home? Or is there a reason to question working-from-home evaluations?
At the start, working from home had only upsides. Time commuting could be spent at home and lunches were eaten in the park whilst walking the dog. The first COVID-19 results showed a happy worker was a productive worker: satisfaction rose, and productivity stable or increased at home [1-2]. Lately, however, this positivity about productivity is being corrected downwards [3-4]. Of course, working from home (WFH) consistently and without change is likely to cause some problems. In the long run, lacking coworker interaction, concentration, and the suboptimal home office room all take their toll [5-7]. Like everything in life, moderation is key: reports are structurally indicating that hybrid working (partially at home, partially in the office) is the future. But how much partially working is in days, is still under debate. And how much productivity gain results from this, even more. How do we get accurate information to assess the future of WFH?
Figure 1: Planned levels of WFH after the pandemic increase with WFH productivity surprises during the pandemic
[8] Aksoy, C. G., Barrero, J. M., Bloom, N., Davis, S. J., Dolls, M., & Zarate, P. (2022).
The hidden threat for working from home predictions is the huge dependency on self-reported productivity and satisfaction. And there is good reason to question the validity of those reports. First, Aksoy et al. [8] proudly show that WFH evaluations were generally substantially better than expected. For workers that were positively surprised, the willingness to continue with WFH has higher: almost two days on average (figure 1). However, people that were accurate in predicting their WFH productivity, are only willing to work from home one day. It’s feasible that the positive effect of WFH will wear off, leading to a decrease in planned WFH. That this willingness to continue is influenced by affective states, is shown later on: the severity of the lockdown and mask policy influences the perceived working-from-home desires, even after COVID-19 (figure 2).
Figure 2: Current and planned levels of WFH rise with the cumulative stringency of government-mandated lockdowns, adding controls for cumulative mask mandates.
[8] Aksoy, C. G., Barrero, J. M., Bloom, N., Davis, S. J., Dolls, M., & Zarate, P. (2022).
Second, reporting on productivity over time does not seem to be free from affective retrospection. Figure 3, adapted from Stroom [9], suggests that the workers' current state might influence an important part of the retrospection accuracy. The productivity that people recall that they themselves gave WFH at an early time, is influenced more by their current productivity than their productivity at that earlier time. As such, people think they are looking back, but are actually influenced by their current satisfaction. With a lot of volatility in affective states over the duration of COVID-19, these results suggest that contrasting your current state with pre-pandemic expectations might be biased.
Figure 3: Retrospective productivity (RT1) explained by the current state (T2) and the predicted state (T1)
[9] Stroom (2022).
Finally, we are able to compare alternatives to self-reports. Gibbs et al. [10] compare the IT input and output using the IT firm's system logs. Figure 4 shows, against expectations: productivity declines at home. But what is maybe even more interesting, is that these graphs also explain the experienced increased self-reported productivity. The time worked per working day sharply increased after the switch to the home office. This is likely to be experienced as higher productivity. However, the decreasing efficiency resulted in overall decreasing realized productivity.
Figure 4: Average outcomes by month. The vertical line (month 0) indicates the switch to working from home.
[10] Gibbs, M., Mengel, F., & Siemroth, C. (2021).
Taken together, these results hint at the fact that, although partially working from home is preferred by many, the endured effect on productivity is uncertain, to say the least. The stated preference of the number of days is also likely subject to change. The dependency on self-reports shows to be affected by retrospection bias and independent factors. Moreover, increasing hours increases experienced productivity, but does not necessarily make you more efficient. The future of working from home is not doomed, but a careful and objective evaluation of working from home is needed before definitive office-exit strategies are irreversible started. A happy worker might feel like a productive worker, but whether that truly is the case, is still under investigation.
References:
1. Bloom, N., Garicano, L., Sadun, R., & Van Reenen, J. (2014). The Distinct Effects of Information Technology and Communication Technology on Firm Organization. Management Science, 60(12), 2859–2885. https://doi.org/10.1287/mnsc.2...
2. Bloom, N., Liang, J., Roberts, J., & Ying, Z. J. (2015). Does working from home work? Evidence from a chinese experiment. Quarterly Journal of Economics, 130(1), 165–218. https://doi.org/10.1093/qje/qj...
3. Morikawa, M. (2022). Work-from-home productivity during the COVID-19 pandemic: Evidence from Japan. Economic inquiry, 60(2), 508-527.
4. Bartik, A. W., Cullen, Z. B., Glaeser, E. L., Luca, M., & Stanton, C. T. (2020). What jobs are being done at home during the COVID-19 crisis? Evidence from firm-level surveys (No. w27422). National Bureau of Economic Research.
5. Yang, L., Holtz, D., Jaffe, S., Suri, S., Sinha, S., Weston, J., Joyce, C., Shah, N., Sherman, K., Hecht, B., & Teevan, J. (2022). The effects of remote work on collaboration among information workers. Nature Human Behaviour, 6(1)
6. Wang, B., Liu, Y., Qian, J., & Parker, S. K. (2021). Achieving Effective Remote Working During the COVID-19 Pandemic: A Work Design Perspective. Applied Psychology, 70(1), 16–59. https://doi.org/10.1111/apps.1...
7. Stroom, M., Eichholtz, P., & Kok, N. (2022). Looking back at the present? Recollection Bias in Self-Reports - A working-from-home case study [Working Paper].
8. Aksoy, C. G., Barrero, J. M., Bloom, N., Davis, S. J., Dolls, M., & Zarate, P. (2022). Working from Home Around the World (Working Paper No. 30446). National Bureau of Economic Research. https://doi.org/10.3386/w30446
9. Stroom, M. (2022). Does working from home work? That depends on the home. [Working Paper].
10. Gibbs, M., Mengel, F., & Siemroth, C. (2021). Work from home & productivity: E9vidence from personnel & analytics data on IT professionals. University of Chicago, Becker Friedman Institute for Economics Working Paper, (2021-56).
