Remote work, for millions of employees, has long gone from a nice-to-have to a must-have; 40% of U.S. employees currently work remotely for at least one day a week. That figure comes from WFH Research, led by professors Jose Maria Barrero, Nicholas Bloom, and Steven J. Davis. They've been surveying Americans’ working arrangements since May 2020, becoming one of the ultimate authorities on remote work.
The researchers have long maintained that some form of flexible work is the only way forward for most workplaces (“In 2023, we’ll be laughing at anyone who does anything else but hybrid,” Bloom told Fortune last fall). But their latest working paper, published by Stanford’s Institute for Economic Policy and Research, delivers a blow to work-from-home advocates: Fully remote work is associated with 10% to 20% lower productivity than fully in-person work.
Bosses have long been suspecting that their remote workers are less productive; worker productivity has been plummeting for five straight quarters, for the first time since World War II. It’s why so many Fortune 500 CEOs, from David Solomon to Mark Zuckerberg to Marc Benioff, have been ordering their workers back to the office, hoping it would improve their bottom lines—and morale.
But those daunting percentages aren’t because remote workers are simply lazy or slacking off, meaning a full-time return to office may not necessarily fix the problem. Drawing on various studies from across the globe, Barrero, Bloom, and Davis wrote that challenges with communicating remotely and lack of motivation are the main issues preventing fully remote workers from being more productive. “Supervising, training, mentoring, and building firm culture is much harder” with fully remote workers than with workers who come in a few times per week, Barrero tells Fortune.
Distributed communications—and explaining or clarifying things virtually that would be much simpler in-person—tend to crowd out productive work time. Plus, when teams are spread across the country, everyone is less likely to make or foster new connections, the authors wrote. That matters because in-person work may thus allow for richer and faster communication, which can be important for time-sensitive activities.
The productivity problem
One study the researchers cited, published earlier this year, considered a Fortune 500 firm that had both in-person and remote call centers before the pandemic. It found that when that firm went fully remote in April 2020, it experienced an 8% reduction in call volumes among workers who shifted from fully in-person to fully remote.
Another study observed a large India-based tech company that also shifted to fully remote in April 2020, finding that worker performance remained constant; but once workers became remote, they worked longer hours. That, WFH authors wrote, “implied a drop in employee productivity of 8% to 19%.”
“In many of the studies we cite and in some of our own survey evidence, workers often get more done when remote simply because they save time from the daily commute and from other office distractions,” Barrero tells Fortune. “This can make them look more productive on a ‘per day’ basis, even if it means they’re actually less productive on a ‘per hour’ basis.”
That might explain the seeming discrepancy between WFH Research's latest findings and how workers feel they're performing. An October 2022 survey of white-collar workers by Slack’s think tank, Future Forum, found that workers with full schedule flexibility notched 29% higher productivity scores than those with no flexibility at all. Plus, remote and hybrid workers reported 4% higher productivity than fully in-person workers. And most remote capable workers (parents and caregivers in particular) told Pew Research that remote work helps them get through work and meet deadlines better.
But many Pew respondents also noted that not being in the office limited their opportunities for mentoring and connecting with colleagues—the very same issue the WFH researchers noted as a contributing factor to productivity declines.
There's also a less forgiving explanation for reduced productivity, WFH Research finds: Some remote employees might be “shirking from home,” taking advantage of their lack of oversight to spend fewer hours on core tasks, and get distracted by their TVs.
“There is a long literature on self-control problems in economics, and without direct managerial supervision many remote workers may find it hard to motivate themselves sufficiently,” Barrero, Bloom, and Davis wrote. “Any university professor knows students often choose to study in libraries as a self-commitment device, even though their grades already provide a strong incentive for performance. So, it is perhaps not surprising that employees that are working remotely on a full-time basis may at times struggle with self-motivation.”
Hybrid work wins again
It’s not beyond the realm of possibility that remote workers may also be struggling because they're lacking proper management—and that doesn't mean tracking their every move. It's actually why they, along with hybrid workers the most stressed at work, according to new Gallup research. It attributes that stress to the “less predictable or structured work life” that comes with full or partial remote work arrangements not being managed right.
That's no surprise—steering a distributed team is a skill in itself, and few managers have been given the tools (or the lead time) to pull it off. Middle managers are often left to figuring out and executing a game plan in today's remote work world—an increasingly tricky business, Bloom told Fortune last fall.
Jim Harter, Gallup’s chief scientist of workplace and well-being, told Fortune remote worker stress can be fixed by reskilling managers. Perhaps the same could be applied to increasing remote worker productivity. If, as the WFH Research leads say, remote communication leads to lack of mentoring, culture-building, and motivation, a case may be made that if managers are reskilled to approach work-from-home arrangements in a way that focuses on those three problem areas, increased worker productivity may follow.
That should put to rest the idea that workers need to be monitored at all times in order to be productive. Not to mention, aside from appealing to workers, instating a fully remote work model “can generate even larger cost reductions from space savings and global hiring,” Barrero, Bloom, and Davis point out.
As they’ve long maintained, hybrid work—a sensible middle ground—is often the best course. “Organized” hybrid plans, as Bloom has called them, appear to have no impact on productivity and improve recruitment, retention, and morale.
Looking ahead, the researchers wrote, the share of companies offering remote work will only keep growing, especially as ways of improving distributed work become commonplace. Three-and-a-half years on, it’s clear the pandemic generated “both a one-off jump and a longer-run growth acceleration” in non-traditional ways of working. And flexible arrangements aren’t going anywhere—no matter how many CEOs insist there’s more shirking than working.
