A gradual reverse migration is under way, from Zoom to the conference room. Wall Street firms have been among the most forceful in summoning workers to their offices and in recent months and even many tech titans such as Apple, Google, Meta, Oracle, IBM and Amplitude, have demanded staff show up to the office three days a week and in some cases four.

Manufacturing giants such as Anheuser Busch, PHM Brands, Nordock, Alcoa and Rio Tinto; just to name a few are demanding five day weeks in house from their employees. For work-from-home believers, such as myself I thought employees were just as productive working under a hybrid model not to mention a great deal happier. After all; was it not true that a number of studies throughout North America during the Covid-19 pandemic demonstrate that remote work was often more productive than working in the office? 

Unfortunately, new research mostly runs counter to this, showing that offices, for all their flaws, remain essential. A good starting point is a paper that received much attention throughout North America when it was published in 2020 by Natalia Emanuel and Emma Harrington, then both doctoral students at Harvard University. They found an 8% increase in the number of calls handled per hour by employees of an online retailer that had shifted from offices to homes. Far less noticed was a revised version of their paper, published in May by the Federal Reserve Bank (FRB) of New York. The boost to efficiency had instead become a 6% decline. The FRB attributed the decline to collaboration and communication challenges, security and confidentiality concerns, social and corporate culture worries, on boarding challenges and technological limitations.

It was suggested that the researchers had not made a mistake. Rather, the FRB research incorporated more precise data, including detailed work schedules. Not only did employees answer fewer calls when remote, the quality of their interactions suffered. They put customers on hold for longer. More also phoned back, an indication of unresolved problems.

The revision comes hot on the tails of other studies that have reached similar conclusions. David Atkin and Antoinette Schoar, both of the Massachusetts Institute of Technology, and Sumit Shinde of the University of California, Los Angeles, randomly assigned data-entry workers in India to labour either from home or the office. Those working at home were 18% less productive than their peers in the office. Michael Gibbs of the University of Chicago and Friederike Mengel and Christoph Siemroth, both of the University of Essex, found a productivity shortfall, relative to prior in-office performance, of as much as 19% for the remote employees of a large Asian firm. Another study determined that video conferences inhibit creative thinking.

The reasons for the findings will probably not surprise anyone who has spent much of the past few years working from a dining-room table. It is harder for people to collaborate from home. Participants in the study spoke of missing their “neighbours to turn to for assistance”. Other researchers who looked at the communication records of nearly 62,000 employees at Microsoft observed that professional networks within the company become more static and isolated. Teleconferencing is a pale imitation of in-the-flesh meetings: researchers at Harvard Business School, for example, concluded that “virtual water coolers”—rolled out by many companies during the pandemic—often encroached on crowded schedules with limited benefits.

Some of the co-ordination costs of remote work might reasonably be expected to fall as people get used to it. Since 2020, many will have become adept at using Zoom, Webex, Microsoft Teams, Cisco or Slack. However, another cost may rise over time (if it already hasn’t) and that is – the underdevelopment of human capital. In a study of software engineers published in April of 2021, Drs Emanuel and Harrington, along with Amanda Pallais, also of Harvard, found that feedback exchanged between colleagues dropped sharply after the move to remote work. Drs Atkin, Schoar and Shinde documented a relative decline in learning for workers at home. Those in offices picked up skills more quickly.

The origins of the view that, contrary to the above, remote working boosts productivity can be traced to an experiment nearly a decade before the pandemic, which was reported by Nicholas Bloom of Stanford and others in 2013. Call-centre workers for a Chinese online travel agency now known as Trip.com increased their performance by 13% when remote—a figure that continues to appear in media coverage today. But two big wrinkles are often neglected: first, more than two-thirds of the improved performance came from employees working longer hours, not more efficiently. Secondly, the Chinese firm eventually halted remote work because off-site employees struggled to get promoted.

The price of happiness

There is more to work and life than productivity. Perhaps the greatest virtue of remote work is that it leads to happier employees. People spend less time commuting, which from their vantage-point might feel like an increase in productivity, even if conventional measures fail to detect it. They can more easily fit in school pickups and doctor appointments, not to mention the occasional gym visit or midmorning bike ride. All this explains why so many workers have become so office-shy.

Indeed, several surveys have found employees are willing to accept pay cuts for the option of working from home. Having satisfied employees on slightly lower pay, in turn, might be a good deal for corporations. That being said, it is safe to say that the future of work in a number of cases will remain a hybrid model and the balance of the work week will tilt back to the office in the very near future because better productivity lies in that direction.