We are witnessing a gradual reverse migration from Zoom to the conference room. Wall Street firms have been some of the most aggressive in calling employees back to the office, but in recent months even many tech titans (Apple, Google, Meta and others) have demanded the staff go to the office at least three days a week. To supporters of telecommuting, this seems like the revenge of the corporate lunatics. Didn’t a flurry of studies during the covid pandemic show that working remotely was often more productive than working in the office?
Unfortunately for the more convinced, new research mostly contradicts this theory and shows that offices, for all their flaws, are still essential. A good starting point is a working paper that got a lot of attention when it was published in 2020 by Natalia Emanuel and Emma Harrington, then PhD students at Harvard University. The researchers detected an 8% increase in the number of calls handled per hour by employees at an online establishment that had switched to telecommuting. A revised version of this same work published in May by the Federal Reserve Bank of New York has had much less impact. The increase in efficiency has now turned into a decrease of 4%.
The investigators were not wrong. What happened was that they received more accurate data, including detailed work schedules. It turns out that not only were employees answering fewer calls from home, but the quality of their interactions was also suffering. They left customers on hold for longer. And there were also more backlashes, an indication of the existence of unresolved problems.
The review is published in line with other studies that have reached similar conclusions. David Atkin and Antoinette Schoar of the Massachusetts Institute of Technology and Sumit Shinde of the University of California, Los Angeles randomly assigned workers in India to work from home or from the office to introduce data Those who worked at home were 18% less productive than their colleagues in the office. Michael Gibbs of the University of Chicago and Friederike Mengel and Christoph Siemroth of the University of Essex found a productivity deficit, relative to pre-office performance, of up to 19% in the case of of the telecommuters of a large Asian IT company. According to another study, even chess professionals play worse online than in person. And yet another study used a laboratory experiment to show that video conferencing inhibits creative thinking.
The reasons for these findings are likely to come as no surprise to anyone who has spent much of the last few years working from the dining room table. Collaborative work is more difficult from home. Employees who participated in the Federal Reserve study mentioned that they had noticed the absence of “coworkers to turn to for help.” Other researchers who analyzed the communication records of nearly 62,000 Microsoft employees observed that professional networks within the company were becoming more static and isolated. Teleconferences are a pale imitation of face-to-face meetings: Harvard Business School researchers, for example, concluded that “virtual water dispensers” (spaces created by many companies during the pandemic to mimic chatter around the actual water dispenser) often invaded very busy schedules with limited benefits. To use the terminology of Ronald Coase, an economist who focused on the structure of companies, all these problems represent an increase in coordination costs and make the collective enterprise more difficult to manage.
It is reasonable to expect that some of the coordination costs of teleworking will decrease as people get used to it. By 2020, many will have become experts in using Zoom, Webex, Teams or Slack; but there is another cost that can increase over time: the underdevelopment of human capital. In a study of software engineers published in April, Drs Emanuel and Harrington, along with Amanda Pallais, also from Harvard, found that feedback between colleagues dropped dramatically after the switch to remote work. Atkin, Schoar, and Shinde documented a relative decline in teleworkers’ learning. Those who worked in the office acquired knowledge more quickly.
The origins of the view that, contrary to all that has been said, remote work increases productivity can be traced back to an experiment done nearly a decade before the pandemic and reported in 2013 by Nicholas Bloom , from Stanford, and others. Call center workers at a Chinese online travel agency (now called Trip.com) increased productivity by 13% by working remotely, a number that continues to appear in the media today. However, two important aspects are often overlooked: first, more than two-thirds of the improvement in performance is explained by employees working longer hours, not more efficiently; secondly, the Chinese company ended up discontinuing telecommuting because those who didn’t work in the office had difficulty getting promoted. In 2022, Bloom revisited Trip.com, this time to investigate the effects of a hybrid job trial. The results of this experiment were less surprising: it had a minimal impact on productivity, even though workers worked longer hours and wrote more code than in the office.
There is much more to work (and life) than productivity. Perhaps the greatest virtue of telecommuting is that it makes employees happier. People spend less time commuting, which from their point of view may seem like an increase in productivity, even though conventional measurements don’t pick it up. It’s also easier to take or pick up the kids from school and medical appointments, not to mention the occasional break or mid-morning jog. And some tasks, especially those that require uninterrupted concentration for long periods, can be better done at home than in an open-plan office. All this explains why so many workers have become very reluctant in the office.
In fact, several surveys have shown that employees are willing to take a pay cut in exchange for working from home. On the other hand, having satisfied employees with a slightly lower salary can be good business for corporate managers. For many, then, the future of work will continue to be hybrid. However, the balance of the work week is likely to tilt back towards the office and away from home; but not because the bosses are sadomasochists with a perverse penchant for rush hour traffic, but because there is greater productivity in this.
