So Much For The Work From Home Revolution

So the biggest argument we have heard during this pandemic is that working from home is here to stay.  While there is little doubt that working from home will be much more common than it was, new data indicates we aren’t ready for the work from home revolution just yet.

Masayuki Morikawa over at VoxEU & CEPR analyzes data out of japan on telework and it is not very good.

– Productivity: ” Using data from a survey of individuals in Japan, in Morikawa (2020) I show that the productivity of employees adopting the home working arrangement during the Covid-19 pandemic is, on average, 30–40% lower than that in the office.”

– Not 100% just yet: Even during the pandemic we didn’t see full adoption of telework.  In fact, Morikawa found that “teleworkers have spent more than 70% of their work hours at home during the pandemic.”

– Problems:  According to employee surveys the two biggest issues they had with telework were 1) “Some tasks cannot be conducted at home although these are not required by the rules and regulations (76.1%)” and 2) “Poor telecommunication environment at home relative to the workplace (60.8%)”

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COVID-19 has obviously hastened the pace of telework technology, but it’s clear we have not reached a point where most people can work from home full-time.  30-40% reductions in productivity won’t be acceptable for most companies.  Even if they are saving money from a reduction in the workspace, those types of productivity losses won’t justify it.  COVID has given us a blueprint on how telework could be possible.  If workers truly want the option going forward they need to go beyond figuring out how to make it work.  They need to figure out how to make it profitable.