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Does Working From Home Decrease Productivity?

Does working from home decrease productivity? Find out the facts about whether working from home decreases productivity and how to make sure your employees stay engaged.


By ActivTrak

An empty work from home desk, which begs the question, does working from home decrease productivity?

What was once a work from home (WFH) trend has quickly become normal over the past few years. Studies suggest that WFH is not only cost-effective and convenient for employers, it can also increase employee satisfaction. But does remote work decrease productivity? 

If you’re a business considering implementing or changing your WFH policy, you need context to make an informed decision. Read on about the advantages and disadvantages of working from home and its impact on productivity. 

What does working from home mean?

Working from home (WFH) is a working arrangement where employees perform their jobs from the comfort of their own homes, instead of commuting to a physical workspace like an office. For employers, this type of arrangement usually requires you to provide employees with laptops and various ways to collaborate. Employees need to rely on their internet connection to access tools and resources to do their jobs. 

Advantages and disadvantages of WFH

Many organizations leaned on WFH during the COVID-19 pandemic to continue to do business, but have kept the policy active due to several benefits. Read on and we’ll discuss the advantages and disadvantages of WFH.

Advantages of WFH

There are many clear advantages of WFH. First, employees save time and money with no commute. WFH also gives them more flexibility in terms of their working hours and work-life balance, which can boost satisfaction and mental health. WFH can help reduce stress levels, as employees can work in a comfortable and familiar environment. It can also help improve employees’ productivity, because they can focus on their tasks without the distractions and interruptions of a busy office.

Disadvantages of WFH

However, there are also some potential drawbacks to WFH. It can be difficult to stay motivated and productive when working from home, as there is no one to provide guidance or feedback. Additionally, it can create communication challenges with colleagues because there’s no face-to-face interaction. This can even lead to feelings of isolation, as employees may not have the same level of social interactivity as they would in an office environment.

Does WFH decrease productivity?

While there are clear advantages and disadvantages to WFH environments, there’s one question employers want to know the answer to: Does working from home increase or decrease productivity? Unfortunately, the answer isn’t necessarily clear.

To start with, there isn’t a lot of research on the long-term effects of productivity from home. This is partially because it’s a relatively new work environment for many companies, and remote workers didn’t make up a big part of the workforce until the pandemic. Also, the pandemic forced many workplaces to adopt a WFH setup in a quick-fix way, which had other negative effects on work productivity. Over time, organizations have adapted to better support remote workers which is showing positive impacts on productivity — but it’s still a small sample size compared to the pre-pandemic era. 

What the data says about WFH’s impact on productivity

Recent research showed some complex data about WFH and worker productivity.

WFH before the pandemic

Research before COVID-19 from Stanford showed that WFH was great for companies, improving productivity by 13% for one NASDAQ-listed company. This was due to fewer sick days and a quieter environment. Full-time employees in this study also reported improved work satisfaction, and it showed – WFH employees were 50% less likely to leave the company. 

WFH and pandemic stress

The COVID-19 pandemic added a new layer of uncertainty around working from home. According to an article by WeForum, a study of Japanese workers based on a 2020 survey reported that team members were only 60-70% as productive working from home during the pandemic. However, this may have been due to being forced to work from home when they were used to working in an office. In these cases, many companies didn’t have the resources available to make collaboration possible from home. 

Also, most WFH employees were forced to work alongside children and other family members in home environments where they didn’t have an office set up. A later study also covered by WeForum showed that productivity actually increased for workers by 8 points when they worked from home. This indicated that productivity improved as organizations figured out better processes to support WFH employees throughout and after the pandemic. 

Post-pandemic research

The pandemic may not have been the best way to study employee productivity in WFH environments, given the drastic change in work environments without much preparation from employers or employees. Post-pandemic studies are already showing that working from home may be better for employees and employers alike, at least when it’s implemented intentionally. 

For instance, a monthly study of 30,000 U.S. workers launched in 2020 from the Mexico Autonomous Institute of Technology, Bloom and Chicago’s Booth found nearly 60% of survey respondents reported being more productive working from home than they expected (compared with 14% who said they were less productive). The study also reported that 40% of respondents said they were more productive WFH during the pandemic. The researchers argue that WFH will increase productivity in the U.S. by 5% overall.

Mixed feelings about WFH

What we do know is that employers believe that their employees are less productive when they work from home. According to a 2022 study by Microsoft, 49% of managers “struggle to trust their employees to do their best work.” Moreover, 85% of leaders say “the shift to hybrid work has made it challenging to have confidence that employees are being productive.”

Employees themselves tend to enjoy working from home, at least when it’s a choice. For instance, research from the U.S. Bureau of Labor Statistics and SUNY Empire showed that remote workers slept 30 minutes more than in-office workers, even though they worked the same amount of hours. Being less tired makes workers happier, which in turn may make them more productive. They also commute less, giving them more time to enjoy their lives outside of work. 

It may be that employer trust is the one thing keeping employees from getting the WFH or hybrid work environment of their dreams.

The bottom line of productivity and WFH

Working from home can be an effective way of doing business if managed properly. Although there are some drawbacks, especially when it comes to management trust, WFH can increase employee satisfaction and overall productivity. Ultimately, each employer will have to decide what they need on a case-by-case basis, as each organization’s and each individual's circumstances are unique.

When deciding whether to implement a WFH policy, employers should consider whether or not they can trust employees to do their work and provide those employees with the right tools to do so. It’s important to ensure that employees have the necessary resources and support to work from home effectively, such as access to the right technology and a comfortable workspace. Additionally, employers should consider the impact of WFH on team dynamics and communication, and ensure that employees have the opportunity to collaborate and stay connected with their colleagues.

If you’re interested in implementing or changing your organization’s WFH policy but need tools to help manage remote employees, learn about our solutions or contact us for additional information.

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