Unmasking the Research on Remote vs. On-Site Productivity

Why this Global Question Can Only Be Answered Locally

In the constant deluge of articles examining whether working from home or working from the office is more productive, it's difficult to figure out who is right. Headlines are blasted out with titles such as "Work from Home vs Work from Office," "Does working from home damage productivity?" and "Are Employees More Productive Working From Home?" Yet, the conclusions of each successive article often contradict previous ones. The challenge is to navigate the intricate details of the underlying research, or as the popular saying goes: "the devil is in the details."

To understand the issue, consider this relatively recent (2023) article from The Economist, titled, “The working-from-home illusion fades.“ This article claims that although previous research had shown working from home was more productive than being in the office, “new research mostly runs counter to this, showing that offices, for all their flaws, remain essential.”

The article references several studies, but let’s take a closer look at two of them.

Study 1: Data-Entry Workers in Chennai

One study, titled "Working from Home, Worker Sorting and Development," was published by the National Bureau of Economic Research (NBER) and written by Massachusetts Institute of Technology professors David Atkin and Antoinette Schoar along with Sumit Shinde of the University of California Los Angeles.

To evaluate the research question, an experiment was conducted like this:

1. In 2017, the researchers recruited 235 Indian data entry workers in Chennai, India.
2. The workers were interviewed about their previous experience and preferences for work location.
3. The workers were randomly assigned to either work from home or work from a temporary open office space constructed for the study, without regard to their expressed preference.
4. The workers were trained for a few days.
5. The experiment was run for 8 weeks with increasing difficulty of tasks.

The researchers found that in-office workers were 18% more productive than remote workers. They also found a negative selection factor, in that the workers did not always prefer the work location where they would be most productive. For example, various home factors such as the need to take care of a child or elderly parent might have influenced their preference for work location. These obligations might also have affected their productivity when working remotely.

Immediately upon looking at this study, one would naturally begin to wonder how relevant it is. The dataset is pre-pandemic, the work is very specific, and the conditions are quite artificial. This leads us to question the generalizability of these findings to the wide variety of work in the world.

Study 2: Data-Entry Workers Pre- and Post-Pandemic

The Economist article mentioned another study that also dealt with clerical work. This May 2023 Federal Reserve Bank of New York study was written by Natalia Emanuel and Emma Harrington and titled, “Working Remotely? Selection, Treatment, and the Market for Remote Work.” The dataset was gathered from performance data and surveys from about 2000 call center workers employed in a Fortune 500 company.

The data covers a period beginning in 2019 and continuing for about 12 months. Since many workers had started working on-site before the pandemic, the researchers could make some interesting comparisons of workers who began as remote workers versus those who transitioned to remote work during the pandemic. Again, the study found that remote workers were less productive (about 4-8%) in terms of the number of calls answered, call quality, and some other metrics.

Like the NBER study, the Federal Reserve research found negative selection effects, where workers chose their work location based on life factors, not where they would be most productive. Further, this study also found evidence that because in-office workers were 50% more likely to get promoted, highly skilled workers likely preferred on-site work to improve their career opportunities.

A Deeper Look

The above-mentioned studies sought to ascertain how work location affected productivity. But quite a lot was overlooked, making it difficult to credibly claim these findings say something lasting about productivity in real-life work settings. Let’s look at some unaddressed aspects.

Type of Work

Both of the studies were about clerical jobs. Yet, Professor E. Glenn Dutcher of the University of Innsbruck did a study that found the type of work matters. Dutcher’s study compared productivity between creative and dull individual tasks, and he found:

• Dull tasks harmed remote productivity.
• Creative tasks improved remote productivity.

Dutcher’s study was small and done with college students at the University of Florida, so we would not want to consider those findings proven. However, they do highlight that type of work might be a factor.

What is Productivity Anyway?

Productivity in the clerical worker studies was measured in output by hour. This is appropriate for work with fixed hours and hourly pay, but much of remote work is different. In the “always on” modern professional world, work may be done at various times in the day, for various increments of an hour, and is based as much on quantity as on quality and availability.

Employee Wellbeing

The studies covered relatively short time frames and lacked consideration of the long-term impacts on well-being. For example, there are numerous studies concerning higher stress in noisy, modern open office workspaces. Workplace wellbeing has been shown to positively impact productivity as well as the ability to attract and retain top talent.

Flexibility in Workspaces

The cited research failed to account for adaptability in work environments. Unlike office workers with pre-structured spaces, remote workers were left to create their home setups on their own, and their success at this could have varied widely. Many were probably working from couches and kitchen tables. With proper management, education, and company support, the result might have been different. Remote workers could have optimized their spaces over time to decrease distractions, increase relationship building, and reduce communication challenges. Collaboration tools are also continuously getting better.

Adaptability in Management

Similarly, management strategies were not adjusted for remote work scenarios. In the Federal Reserve study, the pandemic forced workers and managers to immediately switch to remote working. So the home working environments and management style were implemented with little forethought.

The NBER study purposely established the same management methods for both work-at-home and work-in-office, intending to reduce experimental variables. However, this was arguably incorrect as each environment should have the best management for that environment.

Impact of Subgroups

While the NBER study addressed differences in subgroups (e.g., men, women, low income, high income, young, old), and it did identify certain effects of subgroups on productivity, the Federal Reserve study entirely neglected this aspect. Further, neither study made much effort to delve into these potential factors. It seems indisputable that a comprehensive understanding of the future of work demands acknowledging and addressing variations within different demographic groups.

The Closing Argument

My intention here, akin to a defense lawyer, was not to disprove these studies or prove that remote work was more productive. Rather, I hope I have instilled doubt about the answerability of the query "Is working from home or the office more productive?" This question appears to be answered frequently in headlines of popular publications and shapes public perception. However, it is inherently flawed due to a multitude of confounding variables. It is akin to asking if red or green is superior – a question without a universal answer.

The real answer is, “It depends.” For sure, many articles on a wide range of topics in popular press fall into the trap presented here of uncritically putting forth cherry-picked research studies. Specifically, in the case of productivity in remote work versus in-office work, we are probably living for the foreseeable future in a world where considerable remote, hybrid, and on-site work exist together, often mixed. As such, we must carefully consider the various situations and the appropriate approaches that we might use when deciding which work should be performed where.

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