It’s been more than a year since companies and organizations implemented work-from-home (WFH). Global companies and most large local organizations decided to extend this practice for the remainder of this year as coronavirus cases surged in many parts of the globe and a new Indian variant enters several countries.
Early evidence last year revealed increased productivity, apart from other benefits like spending more time with the family and having more time for hobbies like gardening and cooking. But as pressure to show business results in a depressed economy sunk in coupled with challenges in internal collaboration and spotty internet connectivity, WFH started to show cracks. Sentiments are now ambivalent, at best mixed.
This is evidenced by a small number of studies conducted late last year that evaluated productivity when working from home based on individual or firm surveys. A survey of individuals in the United Kingdom revealed that, on average, productivity at home is not significantly different from that in the workplace, according to a study by Etheridge et al published in Covid Economics.
In the United States, a University of Chicago survey of individuals indicates that most respondents who have adopted home working practices report higher productivity than their expectation before the start of the pandemic.
In Japan, a study by Morikawa showed that the productivity of employees adopting the home working arrangement during the Covid-19 pandemic is, on average, 30- to 40-percent lower than that in the office. Another study in the US among small and medium-sized firms reported a decrease in productivity of about 20 percent on average, as revealed in a paper by the National Bureau of Economic Research (NBER).
I have not seen any quantitative study in the Philippines on the impact of WFH on the productivity of workers. Anecdotal evidence from my clients in the country indicated challenges with managers connecting to their team members and sustaining engaging meetings. But one survey by Ramos et al. in late 2020 among Filipino workers found out that “work from home factors” have a significant positive effect on “job satisfaction” and “productivity”; meaning WFH arrangements may result in an increase in productivity and job satisfaction.
One apparent gain from WFH is the removal of the daily commute to and from the office. This is easily two hours gain on average daily but may reach several hours for those living in distant places. Without the daily commute, workers are able to use that time for work apart from removing the stress and health hazards of negotiating the public transport system.
But these gains are probably canceled out by environmental factors at homes such as noisy environment, distractions from family members, and spotty internet connection. The latter is the most cited reason why workers are unable to perform their tasks well in a WFH setting.
These are also the same reasons why the productivity gains from WFH are dependent on how developed and wealthy a country is. A study conducted by the NBER as quoted by Bloomberg revealed that WFH is for “rich countries,” where the internet infrastructure is sufficient and most of the jobs are knowledge-based. The study further noted that the benefits of working from home “will accrue disproportionately to the highly educated and well paid.”
In the end, the study concluded that in the US, netting off the pains from the gains, WFH will lift productivity in the US economy by 5 percent. Couple this with the rapid adoption of new technology amid the pandemic, the study forecasts that it “will offer lasting economic gains, helping to boost sluggish productivity that has long weighed on global growth”.
Now, that is the US, an advanced and developed country gaining 5 percent from WFH productivity increase. It is safe to say that a country like the Philippines is productivity is at a net decline, considering that the bulk of the jobs are in the services, retail, agriculture, and hospitality spaces; and the internet connectivity improvements remain anemic.
That is why the country’s gross domestic product shrunk by 9.5 percent in 2020, the biggest decline among the Southeast Asian countries and the worst since 1947. In the first quarter of 2021, the Philippine economy further contracted by 4.2 percent, marking the longest recession in recent history.
Of course, there are other factors in the country’s economic decline, such as prolonged lockdowns. But WFH, celebrated by many as giving a boost to productivity, maybe, in fact, draining it.
The author is founder and chief executive officer of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at rey.lugtu@hungryworkhorse.com.