Why Remote Working in the Pandemic Has Been a Drag on Productivity

UK Policy Economy & sustainability

Why Remote Working in the Pandemic Has Been a Drag on Productivity

Commentary
Posted on: 8th March 2021
Jeegar Kakkad
Head of Productivity and Innovation

With kids across the country heading back to school today, their parents – and most notably mothers, who have shouldered the bulk of homeschooling responsibilities – will be breathing a sigh of relief. So too will employers, who have become increasingly worried about productivity. But the pandemic and the shift to homeworking has had profound and persistent effects on productivity that aren’t going away any time soon.

As the stay-at-home orders were implemented almost one year ago, our bedrooms, kitchens, and lounges were turned into offices almost overnight: firms introduced remote working technology in, on average, 11 days, 43 times faster than they thought possible before the pandemic. As Zoom usage in the UK soared by 2,000%, 40% of office workers were working from home full time, up from just 5% prior to the pandemic.

Anecdotal evidence from companies suggests that in the first phases of the pandemic, companies were able to sustain or increase productivity. But according to the latest ONS surveys of business, relatively more businesses are reporting that remote workers’ productivity has decreased as the pandemic has persisted.

In late September (the earliest this data is available), 12% of businesses across all industries thought remote working had increased their worker’s productivity, , while 24% reported it had decreased productivity (a net balance of -12% as shown in Figure 1), with similar patterns reported in most sectors and for all sizes of companies. This means that six months into the pandemic – even when schools were still open, the weather was nice and still enough daylight – relatively more businesses were worried that remote working had decreased their workers’ productivity.

Not surprisingly but more worryingly, as the second wave of the pandemic hit and stricter lockdown measures were enforced, fewer businesses reported increases in productivity from homeworking, even as more and more have said they’ve seen a decline. Two months into the second full national lockdown, one-in-three businesses believe homeworking has decreased worker productivity, with only 9% suggesting they’ve seen an increase (a net balance of -25%, as shown in figure 1.

This suggests that not only has the lockdown affected the viability of locally consumed services (eg pubs, restaurants and shops), but the persistence of the pandemic and the lockdown measures are affecting the output of the work that is still allowed to happen from our homes.

Figure 1 Productivity has suffered as the lockdown has persisted

Source: ONS, TBI

How has the increase in homeworking affected the productivity of your workforce, net balance (% of businesses reporting an increase less % of businesses reporting a decrease)

Why do firms believe that worker productivity has decreased through the pandemic? Three potential reasons include:

  1. An erosion in companies’ social and organisational capital. Pre-pandemic companies will have built up social capital within their company: within the leadership team, across different levels of workers, and between knowledge and front-line teams.  In-person relationships developed at work and tacit information flows were a lubricant, helping individuals and teams to come together to solve problems in a crisis and leading to productivity gains for many companies in the immediate aftermath of the lockdown. But these gains may prove temporary, as the social capital that derived from a company’s corporate culture is being used up to manage the shift to remote working and responding to the consequences of the pandemic.

 

  1. An erosion in general wellbeing through the pandemic. There’s a well-established connection between an individual’s sense of wellbeing and their productivity at work. According to ONS surveys of personal wellbeing, there have been stark differences in wellbeing effects of the pandemic as it has persisted. In its early stages, people were anxious and unhappy, but overtime, they have also become less satisfied with their life and seen an erosion in their own self-worth. And while there is evidence that some people report being happier with home working, the benefits are not evenly spread: the well-being of women, minorities and younger workers have declined relatively more over the past year.

 

  1. The lack of support systems to sustain productivity in remote working. While firms were quick to introduce remote working technology for their staff, the home-working environments for office staff will have varied widely. Early career and low-paid office workers are more likely to have inadequate home-working set-ups. Younger workers, for example, are more likely to have roommates, forcing them to live and work from their bedrooms, often with inadequate wifi. Parents, and in particular mothers, have also had to juggle these constraints with additional housework, childcare and homeschooling responsibilities, as nurseries and schools closed through the second wave.

Overall, these factors weighing on remote workers’ productivity are likely to ease as and when lockdown restrictions begin to be lifted. The ability to send kids to school, to go the pub or the gym ‘after’ work, to see friends and family, and to see colleagues in the office will boost wellbeing and help firms rebuild their organisational capital.

Yet even if the work from home orders are lifted, remote working is here to stay. So too, therefore, are the economic, social, and political consequences of the changing nature of the future of work.

In a series a follow-up posts, we will explore in turn (i) the impacts on local communities and high-streets; (ii) the equity consequences for female, younger, and low-paid office workers; and (iii) the degree to which businesses themselves will need to adapt their management and working practices.

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