DID REMOTE WORK REALLY START AT THE TIME OF THE PANDEMIC? IS YOUR BOSS STILL SKEPTICAL OF REMOTE WORK NO MATTER WHEN IT STARTED?

The concept of remote work actually began in the early 1970’s and was termed “telecommuting.”  It was a 1973 invention apparently credited to NASA physicist Jack Niles who initiated the first experiments with remote work to reduce traffic congestion and energy consumption.  It was expanded in the 1980’s with the development of the first laptops (like the Osborne 1) and personal computers, allowing professionals like programmers to occasionally work from home.  From the 1990’s to the late 2010’s, the growth of email, the internet, cell phones and fax machines which then allowed remote work to become more viable.  Then in the 2020’s, the Covid pandemic caused a massive, permanent shift toward remote work, fast forwarding its adoption from a perk to a man stream model.    

INC., Com., reports through author Jessica Stillman that via the end of the pandemic there have been so many stories about companies demanding employees return to the office and work more hours of the week there that I’ve largely stopped writing about them. But they’re still coming. 

”Fidelity, Home Depot, and TD Bank all recently demanded more butts-in-chairs time from employees. So did various state governments. Automaker Stellantis followed companies like Amazon and Instagram in tightening its policy to require five days in office.”

 “Attendance obsessed CEOs claim these mandates are driven by objective measures of performance. Mark Zuckerberg, for instance, insists that internal data shows “people who work from home are not efficient.” 

“But if that’s the case, they clearly haven’t been looking at the same numbers as Nick Bloom.”

Stillman reports that “Stanford economist, Bloom is a leading researcher of remote work. And as he recently pointed out on LinkedIn, economy-wide productivity numbers tell a very different story than remote-work-hating bosses. The productivity of American workers has surged since 2020, and the likeliest explanation for us all getting more done isn’t necessarly the result of AI (at least not yet) or corporate whip-cracking. It’s the rise of remote work. “

What’s behind America’s surging productivity?

“As any economist will tell you, Stillman claims, productivity gains are the fundamental way we all get richer. Only by society collectively figuring out how to produce more in the same number of hours do we end up with more resources per capita. (Whether those newly available resources get distributed fairly is a whole other question.) By this essential measure, America was in a slump after the Great Recession.” 

“The country’s productivity growth in the 2010s can best be described as meh. But then something changed. Was it the blockbuster release of ChatGPT in 2022? Was it CEOs renewed commitment to lower head counts and leaner operations? Nope.”

“Numbers rounded up by ‘The Economist’ clearly show the inflection point doesn’t match up with those possibilities. Productivity started increasing in 2020, to be precise. Hmmm, Stillman ponders what could possibly have changed in the world of work in 2020?” 

Strong evidence 

”Bloom thinks he knows the answer to this question: work from home happened. Counter to what the Zuckerbergs of the world might believe, Bloom says strong evidence actually shows that, in many industries and for many roles (though not all), the flexibility to work remotely significantly boosts productivity.”  What we also know is that remote work around the world is growing.  There is a strong and ongoing movement in remote work in Japan and Australia.  85% of companies in Japan and 83% in Australia intend to hire more full-time remote employees.  South Korea and India trail closely at 79%.  In the opposite, Euro Weekly News reports that the United Kingdom leads among 18 European countries, with workers averaging 1.8 days a week at home—just behind Canada globally.     

First, “in A/B trials,” he writes, “employees can concentrate better at home, and save time on commuting and office time-wasting.” Stillman reports that a significant amount of that time saved is devoted to more productive work. One paper put the number at 40 additional minutes per week.  

An increased appetite for flexibility is also likely inspiring more people to start their own businesses. “Business startups rates are 20 percent higher since 2020, and the ability to start and run firms WFH is likely one driver,” Bloom notes. 

Finally, from an economy-wide perspective, remote work allows more people to work than strict in-office hours. Think about people with care giving responsibilities, who can only make a job work if they can design their schedule around school pick-ups or eldercare responsibilities. Without remote work options, their hours of paid work would be zero. 

Bloom doesn’t cite it, but additional research has found that firms that offer flexible work also grow 1.7 times faster than those without. “Even after adjusting for industry and size, flexible companies grow 1.3X faster than their peers annually,” Brian Elliott, CEO of Work Forward, one of the organizations behind the findings, told Inc.

The quiet majority

Many of the country’s loudest business leaders are clearly either ignorant of or unpersuaded by this evidence. But many lower profile bosses and small-business owners may already be convinced. Elsewhere, Bloom has pulled together numbers showing that rates of remote working have been flat over recent years. 

Loud RTO mandates notwithstanding, real estate and transit data both show that the actual number of days spent in office has been holding steady, with the majority of businesses settling on some kind of hybrid schedule. The overall economy seems to be benefiting from the quiet majority’s decision to embrace flexibility. 

That’s good news for our shared prosperity. But it’s probably cold comfort if you are suffering under a remote-work-hating boss (or remain a skeptic yourself). If that’s your situation, Bloom has a slightly cheeky suggestion: 

“The next time a business leader claims WFH is bad for productivity, point them to the data (and The Economist).”  As well as the other data presented herein.