Does working from home increase productivity and work quality?

With some organisations initiating a return-to-office mandate, what impact will this have on workers’ productivity and work quality? Ian Brinkley explores

Few recent changes in the labour market have been so dramatic over such a short period as the rise in working at home during the pandemic. And much of that change has persisted in the post-pandemic period.

In 2019, just four percent of employees in Ireland usually worked at home, while just over 11 percent reported doing some work remotely.

By 2023, these figures had risen to 19 percent and 15 percent respectively, meaning about a third of all employees were involved in remote work, according to Eurostat. These percentages are relatively high compared to the overall standards in the EU.

It is often argued that home-working makes workers more productive, improves job retention and increases job quality, such as work-life balance.

It has certainly proved popular with workers, and there is some unmet demand from people who would like to work at home but cannot. However, the evidence to support these claims is not as clear-cut as we would like.

Productivity

While some studies have confirmed a positive impact on productivity, others have suggested it has no impact either way, and some find negative impacts.

A 2023 survey from the CIPD found that while more employers reported a positive impact than a negative one, nearly half reported no impact one way or the other.

Unsurprisingly, employers were much more enthusiastic about the potential positive impact on retention and recruitment than productivity.

Many studies rely on self-assessment by individuals and employers as to whether they think employees are more productive at home, but do not measure actual output when working in the office versus remote work.

We should not dismiss self-assessments, but they do make it hard to know just how big any positive or negative impact might be.

What we can say is that in both Ireland and the UK, the rise in homeworking is not associated with better productivity performance across the whole economy.

According to the Central Statistics Office, productivity performance since 2019 has been poor in both countries. It might be that any positive impacts of home working are being swamped by other changes in the economy, hampering productivity growth.

Home working and work quality

Homeworking may deliver more significant benefits as a flexible work option which employees value. However, the CIPD’s large-scale Good Work Index survey of workers in the UK does not show much change in most indicators of job quality between 2019 and 2024, despite the big rise in home working. 

This is a bit of a puzzle. It could be that many of the people who shifted to homeworking since 2019 – mostly those in managerial, professional and technical occupations –already had good jobs, so moving to a different location did not greatly change their response. 

For example, those who did work at home occasionally reported much higher levels of autonomy over how they did their work than those who did not, but it is likely that they would have said the same even if they had been working in the office. 

These headline comparisons are instructive but not conclusive. We need to look at reported work quality for workers in similar jobs, with a mix of some working at home and some working in the office.

It may also be that the standard work quality questions do not fully capture all the benefits of home-working to employees.

The future of home-working

There have been high-profile reports that some major employers – often in the US – are either insisting their workers return to the office or limit the number of days they can work at home.

In the UK, civil servants working at home have also attracted criticism, albeit without much evidence of any detrimental impacts.

The 2023 CIPD survey found that senior managers expressed concern about home working in about 40 percent of all employers surveyed.

However, concerns about getting people back into the office when needed, managing teams, and reduced opportunities for communication, collaboration and innovation were more common than concerns that employees either could not be trusted or were less productive at home.

On balance, home-working probably does have positive impacts on both productivity and work quality, but to date they have been modest.

The shift to homeworking is here to stay despite attempts in some organisations to reign it back. The CIPD 2023 survey found that 20 percent of employers were putting in active steps for more hybrid working over the next 12 months.

For many organisations, a better option will be to manage home-working more effectively rather than risk making themselves less competitive in labour markets by limiting a flexible work option that many employees have come to see as an expected and valued part of the work offer.

As more organisations learn how to get the best out of home-working employees, perhaps homeworking will eventually start to move the dial on aggregate labour productivity.