Work from Home & Productivity During the Lockdowns

From a new paper by Michael Gibbs, Friederike Mengel and Christoph Siemroth:Work from Home & Productivity: Evidence from Personnel & Analytics Data on IT Professionals

The abstract:

Using personnel and analytics data from over 10,000 skilled professionals at a large Asian IT services company, we compare productivity before and during the work from home [WFH] period of the Covid-19 pandemic. Total hours worked increased by roughly 30%, including a rise of 18% in working after normal business hours. Average output did not significantly change. Therefore, productivity fell by about 20%. Time spent on coordination activities and meetings increased, but uninterrupted work hours shrank considerably. Employees also spent less time networking, and received less coaching and 1:1 meetings with supervisors. These findings suggest that communication and coordination costs increased substantially during WFH, and constituted an important source of the decline in productivity. Employees with children living at home increased hours worked more than those without children at home, and suffered a bigger decline in productivity than those without children.

From the conclusion:

 The net effect was a large drop in productivity. This decrease in productivity did not result in a decline in average output, because time worked compensated for it. It would be interesting to see if this change was sustainable over a longer period of time, especially in light of evidence of the adverse effect of long work hours on employee well-being, mental and physical health (Sparks et al., 1997; Sokejima and Kagamimori, 1998; Sparks et al., 2001)...

Despite these downsides and hurdles during WFH, the firm’s employees continued to meet their goals during a severe exogenous shock. It is noteworthy how quickly the firm was able to adapt. Even though almost all employees worked from the office prior to March 2020, they were able to adjust quickly and kept meeting their targets during the entire period of WFH, albeit at the cost of longer working hours. That many employees already worked with laptops in the office was no doubt a factor in the ability to transition quickly.

The WFH period we observe took place during the Covid-19 pandemic, which raises the question of whether factors other than home-working could have contributed to our findings. One possibility is that employees work more simply because lockdown measures closed restaurants, cinemas, etc., thereby reducing the value of leisure time. Under this explanation, however, we would expect Output to increase and Productivity to remain approximately constant, which is not what we observe.

 -RW