Fully Remote? It Could Be 10% to 20% Less Productive

It’s been a nagging question on leaders’ minds worldwide for the past three years: How much less—or more—productive have employees been when working from home?

A potentially sizable amount, says a new working paper. Compared to in-person work, fully remote work is associated with a drop of 10% to 20% in productivity, according to an analysis of recent research by the Stanford Institute for Economic Policy Research, an institution that has studied office-related issues before and during the pandemic. Not surprisingly, the study also found a gap between how workers and managers viewed remote-work productivity.

The statistic comes at a time when office occupancy, in many major cities, has plateaued at around half of what it was pre-pandemic. Some companies that embraced remote work in 2021 are now being more aggressive in their efforts to get employees in the office. There’s also evidence that working remotely full-time could stymie creativity and employee development.

Still, many leaders are wary of alienating employees who, having uprooted their lives and schedules during the pandemic, are resisting returning to the office full-time. “I have some of the same clients that keep asking about office versus home. Our counsel and answers remain the same. Then a month later we're asked the same question,” says David Vied, global sector leader for Korn Ferry’s Medical Devices and Diagnostics practice.

The Stanford research used data from multiple studies conducted since the start of the pandemic. The results varied in degree, but productivity at fully remote workplaces nearly always trended down compared with on-site figures. For example, remote call-centers in the US saw an 8% reduction in call volumes. IT professionals at a large Indian firm produced the same amount while working at home but took many more hours to do so, implying a drop of productivity of as much as 19%. Data-entry workers in India were 18% less productive at home than in the office. “Challenges with communicating remotely—even with the latest telecommunications technology—barriers to mentoring and on-the-job learning, and issues with self-motivation drag employee productivity when fully remote,” the paper’s authors wrote.

The researchers also surveyed how employees perceived their workdays. On average, regular employees believed working from home increased productivity by 7.4%, while managers believed it reduced it by 3.5%.

While the figures are stark, experts recognize that making a return-to-office decision strictly on the basis of productivity data—and broad measures, at that—might not be ideal. “Productivity measuring is a blunt-force instrument, counting up hours and butts in seats,” says Alma Derricks, senior client partner in Korn Ferry’s Culture, Change, and Communications practice. Indeed, the Stanford paper points out that organizations might opt for a fully remote setup because, even after the drop in productivity, it can save money. Fully remote employees who do not require office space are cheaper, and they can be hired nationally or internationally, where wages might be lower.

While fully remote work showed a clear decline in productivity, the researchers concluded that hybrid working arrangements, on average, resulted either in no noticeable difference or a mild improvement. Indeed, experts say that a hybrid schedule, customized to an organization’s various work groups, could satisfy nearly everyone. “Blended work schedules give employees and managers a more versatile tool kit to address the various aspects of getting work done,” says Andrés Tapia, Korn Ferry’s global strategist for diversity, equity, and inclusion.

Derricks points out that one of her clients made Tuesday a mandatory in-office day. Employees gather, brainstorm, and set goals for the rest of the week. On Mondays they meet remotely to review how the last several days have gone. “For them, it’s much more nuanced, and it works,” she says.

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