Self-styled visionaries and people particularly fond of their pajamas have for decades been arguing that a lot of work done in large shared offices could better be done at home. With covid-19 their ideas were put to the test in a huge if not randomized trial. The preliminary results are now in: yes, a lot of work can be done at home; and what is more, many people seem to prefer doing it there.
This does not, in itself, mean the end of the non-home office. It does mean that there is a live debate to be had. Some companies appear relaxed about a domestic shift. On August 28th Pinterest, a social-media firm, paid $90m to end a new lease obligation on office space near its headquarters in San Francisco to create a “more distributed workforce”. Others seem to be against it. Also that month, Facebook signed a new lease on a big office in Manhattan. Bloomberg is reportedly offering a stipend of up to £55 ($75) a day to get its workers back to its building in London. Governments, on which some of the burdens will fall if the pandemic persists, are taking a similar tack, encouraging people “back to work”—by which they mean “back to the office”.
They face a difficult task. For working from home seems to have suited many white-collar employees. As lockdowns have eased, people have gone out into the world once more: retail spending has jumped across the rich world while restaurant reservations have sharply risen. Yet many continue to shun the office, even as schools reopen and thus make it a more feasible option for working parents. The latest data suggest that only 50% of people in five big European countries spend every work-day in the office (see chart 1). A quarter remains at home full-time.
This may be due to the residual fear of covid-19 and the inconvenience of reduced-capacity offices. Until social-distancing guidance ends, offices cannot work at full steam. The average office can work with 25-60% of its staff while maintaining a two-meter (six-foot) distance between workers. Offices which span more than five floors rely on lifts; the queues for access, when only two people are allowed inside one, can stretch around the block.
Some offices are trying to make themselves safer places to work. The managers of a new skyscraper in London, 22 Bishopsgate, have switched off its recirculated air-conditioning. Others have installed hand-sanitising stations and put up plastic barriers. But even if offices are safer, it can still be hard to get there. Many employees do not want to or are discouraged from using public transport—and one-quarter of commuters in New York City live more than 15 miles (24km) from the office, too far to walk or cycle.
However it also appears to be the case that working from home can make people happier. A paper published in 2017 in the American Economic Review found that workers were willing to accept an 8% pay cut to work from home, suggesting it gives them non-monetary benefits. Average meeting lengths appear to decline (see chart 2). And people commute less, or not at all. That is great for wellbeing. A study from 2004 by Daniel Kahneman of Princeton University and colleagues found that commuting was among the least enjoyable activities that people regularly did. Britain’s Office for National Statistics has found that “commuters have lower life satisfaction...lower levels of happiness and higher anxiety on average than non-commuters” (see article).
The working-from-home happiness boost could, in turn, make workers more productive. In most countries the average worker reports that, under lockdown, she got more done than she would have in the office. In the current circumstances, however, it is hard to be sure whether home-working or office-working is more efficient. Many people, particularly women, have had to work while caring for children who would normally be in school. That might make it seem as though working from home was less productive than it could theoretically be (ie, when the kids were in school).
Tumble outta bed into the kitchen
But there are lockdown-specific effects that create the opposite bias, making work-from-home seem artificially productive. During lockdown workers may have upped their game for fear of being let go by their company—evidence from America suggests that more than half of workers are worried about losing their job due to the outbreak. A separate problem is that most studies under lockdown have relied on workers to self-report their productivity, and the data generated in this way tend not to be very reliable.
Research published before the pandemic provides a clearer picture. A study in 2015 by Nicholas Bloom of Stanford University and his colleagues looked at Chinese call-center workers. They found that those who worked from home were more productive (they processed more calls). One-third of the increase was due to having a quieter environment. The rest was due to people working more hours. Sick days for employees plummeted. Another study, looking at workers at America’s Patent and Trademark Office, found similar results. A study in 2007 from America’s Bureau of Labour Statistics found that home-workers are paid a tad more than equivalent office workers, suggesting higher productivity.
The experience of lockdown has simply accelerated pre-existing trends, thinks Harry Badham, the developer of 22 Bishopsgate. That may be an understatement. Although the share of people regularly working from home was rising before the pandemic, absolute numbers remained small (see chart 3). According to one view, the fact that office-working was so dominant until recently reveals that it must be more efficient than home-based work both for firms and for workers. By this logic the success of a country’s emergence from lockdown can be measured by how many people are back at their desks.