Is working from home too much of a good thing?

The OECD has released a report which concludes that the overall impact of working from home (WFH) on productivity during the COVID-19 pandemic remains “ambiguous”.

However, the IMF warns that long-term productivity growth and workers’ efficiency may be negatively affected if companies continue to rely too much on telecommuting when the health crisis abates. The OECD also notes that there is evidence to suggest that innovation is fostered by working in an office environment, and believes that WFH should be voluntary:

Too much telework could ­decrease worker efficiency and long-term productivity growth because of the reduction of in-person communication for complex tasks and innovation, the report says.

It points to the evidence from clusters such as Silicon Valley to suggest sharing physical space is essential for innovation…

“Telework can directly lower capital costs by reducing office space and equipment required by the company,” the report says.

“Labour costs can be reduced as telework enlarges the pool of workers firms can choose from, increasing the skill supply and improving the match between jobs and hires.

“Firms offering telework may also attract workers at lower wages than would otherwise be the case, in particular if combined with other measures that improve work-life balance.”

The IMF has ignored many positives from WFH, including:

  • Time and cost savings from not having to commute;
  • Greater workplace flexibility, especially for parents;
  • Less congestion on roads and public transport systems;
  • Less need to invest in transport systems and office space;
  • Less transport emissions;
  • More incidental contact with family;
  • Dispersing economic activity away from CBDs; and
  • Opening up greater housing options (including regionally).

But it is true that there are costs too:

  • Less social contact;
  • Increased risk of job outsourcing;
  • Less mentoring opportunities for young staff; and
  • More air conditioners / heaters running (negating environmental benefits from lower transport emissions).

In my opinion, WFH offers net benefits, especially for established workers seeking greater flexibility.

Given so many Australians now work behind internet-connected computers in ‘knowledge jobs’, there is less need to have workers travel to a central location every day on crowded roads, trains, busses and trams. This is both archaic and inefficient.

An ideal situation for most ‘knowledge’ workers would probably be a combination of WFH and office work. This would break-up the monotony of both, free-up transport systems, increase work-life flexibility, and ultimately raise overall productivity.

Unconventional Economist

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