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Study shows working from home results in less productivity

Researchers found that people working from home were 18% less productive than those working in an office.
Study shows working from home results in less productivity
Posted at 2:08 PM, Aug 09, 2023

Since the onset of the COVID-19 pandemic, millions of American workers packed up their things and transferred their work duties to the comfort of their own home. In the months since, with the threat of infection no longer a widespread concern, more companies — and even the Biden administration — are calling on workers to return to the office.

Some argue that working from home is best. Others claim being in the office is best. And some more extreme views allege remote work should even be scorned. But regardless which side you're on, it could come down to productivity — and one new study looks to settle that debate.

In a working paper published by the National Bureau of Economic Research, economists at the Massachusetts Institute of Technology (MIT) and the University of California Los Angeles (UCLA) looked at two groups of data entry workers in India — one of which worked remotely while the other group worked in-office. 

Over the course of eight weeks, researchers found that the productivity of those working from home was 18% lower than those in the office.

SEE MORE: 10 companies that will let you work from home and are hiring now

The economists observed a total of 235 entry-level workers who were randomized across skill level and divided into two groups, according to the study. The primary factor used to determine productivity was "net typing speed," which researchers defined by the number of correct entries the workers typed per minute. Ultimately, the workers in-office proved more effective.

However, the study noted some negative effects of office-based work that can partially be contributed to subgroups that have children or other responsibilities at home, as well as poorer households. But overall, workers who preferred being remote were substantially less effective at home than at the office.

One of the possible explanations to this drop-off in productivity could be communication challenges that arise from virtual work. Researchers call it "power in proximity."

SEE MORE: More office spaces set to be converted into apartments

In an earlier study, economists from the Federal Reserve Bank of New York paired up with researchers from the University of Iowa and Harvard to study software engineers at an unnamed Fortune 500 firm. 

Before the pandemic, researchers found engineers in the same building as their supervisors received 21% more comments on their programs than those working in other buildings. But once the pandemic shuttered offices, feedback drastically shrank even more, suggesting that proximity played a role. 

The "power in proximity" paper also calls hybrid models into question, finding that if just one person was remote, the entire team operated as it was remote, affecting feedback for everyone. Additionally, the lack of mentorship could also hurt a business's bottom line, as the paper found a decline in feedback made remote employees more likely to quit.

To boost efficiency, the economists recommend teams be either fully remote or fully in-office. 

Nevertheless, both studies above could bolster the case that more organizations are making efforts to get workers back into the office. 

In contrast, one survey found an overwhelming majority of workers preferred hybrid models or not returning to the office at all, meaning the demands we're seeing from some employers may lead to greater drop-off as people seek more flexible job opportunities.

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