[Real Beat] Remote Work Productivity Evaluation 'Polar Opposites'... "Are They Good at Work?" Growing Distrust Between Labor and Management [Office Shift]③

Research on Remote Work Productivity Poured In but No Conclusion Reached
Executives and Employees Diverge in Their Evaluation of Remote Work

Editor's Note[Jjinbit] is short for 'Jung Hyunjin's Business Trend' and 'Real Business Trend,' a segment that showcases trends in the changing nature of work. The segment within Jjinbit called 'Office Shift' closely examines changes in offices triggered by the COVID-19 pandemic and aims to lay the groundwork for exploring answers to new work styles through experiments we have experienced together. It will be delivered to you every Saturday and Sunday morning. After 40 installments, it will also be available as a book.

[Asia Economy Reporter Jung Hyunjin] "When we started research in 2015, companies said that while telecommuting could save space, it would increase productivity costs. They used to joke that 'the three biggest enemies of telecommuting are the bed, TV, and refrigerator.'"

Nicholas Bloom, a professor at Stanford University who has studied telecommuting for nearly 20 years, said this in an interview with Bloomberg columnist Justin Fox in June last year. Although many workers have experienced telecommuting due to the COVID-19 pandemic, in 2015 telecommuting was a work style experimented with by only a very small number of companies. There was a strong perception that working at home?instead of the office?where there is a bed, TV, and refrigerator was inefficient and unproductive. The idea was that without supervisors or colleagues, workers would lie down on the bed, sit in front of the TV instead of their laptops, and frequently open the refrigerator door to snack, which would reduce concentration and work performance.

As companies experienced new work styles during COVID-19, the aspect they paid most attention to was productivity. They wondered whether employees could maintain the same productivity even when working differently than before. Companies expected telecommuting to become a new work style that could reduce costs such as office rent if there were no productivity issues. While adapting to survive the emergency situation of COVID-19 by adopting various technologies, they could not be certain whether the new work methods would yield the same results as before. This was because they were accustomed to the office as a space focused on work and where they could see each other working.

◆ Numerous Studies on Productivity... But No Clear Conclusion Yet

What was the verdict on maintaining productivity after three years of telecommuting experiments? Unfortunately, the question does not seem to have been properly resolved yet. The whole world conducted experiments during the COVID-19 period, and academia produced numerous studies based on these. However, none of them reached a consensus. The results varied widely. Since there are many factors to evaluate labor productivity, the results differed greatly depending on which factors were emphasized.

Michael Gibbs, a professor at the University of Chicago Booth School of Business, and others published a study in July 2021 showing that productivity decreased due to reduced concentration and communication costs while working from home. The study, conducted mainly on over 10,000 knowledge workers in an IT company in Asia, found that working hours increased by 18%, but average output slightly decreased, resulting in an 8?19% drop in productivity. Employees with children worked longer hours but showed lower productivity. In Korea, it was not uncommon to witness 'working moms' during the height of social distancing complaining that going to the office was better for focusing on work than telecommuting.

However, opposite results were also reported. Professor Bloom, Jos? Mar?a Bas??ez from the Instituto Tecnol?gico Aut?nomo de M?xico (ITAM), and Steven Davis from the University of Chicago published a study in April 2021 based on 30,000 Americans, reporting a 5% increase in productivity as work was reorganized during the pandemic. The researchers pointed out that existing productivity metrics did not include time saved from commuting, so only about 20% of the actual productivity improvement was captured. In a new paper published in July 2022, the team also analyzed that telecommuting reduces wage pressure by about 2 percentage points over the next two years, easing the burden on companies. Reduced commuting time and unnecessary tasks, along with decreased wage demands from satisfied telecommuting employees, help improve corporate productivity.

Thus, evaluations of telecommuting productivity have been mixed. Many experts are withholding judgment for this reason. The IGM Forum at the University of Chicago Booth School of Business, which includes economists from the US and Europe, surveyed 82 experts in November 2021. When asked, "If employees telecommute two days a week, will their productivity increase in the long term?" 56% answered "uncertain." They noted that factors such as the nature of work and organizational interactions could affect telecommuting productivity but concluded that it is difficult to definitively know the effects at this point. Telecommuting remains a 'work style unknown.'

◆ 'Polarized' Evaluations: Management and Employees Are on Different Pages

The only certainty regarding the productivity effects of new work styles during COVID-19 is that the gap between management and employees has widened. According to a survey conducted and published by Microsoft (MS) in September last year, involving about 20,000 people from 11 countries including the US and UK, 87% of employees said they are more productive when working remotely or in a hybrid model (a mix of telecommuting and office work). In contrast, 85% of employers cited "difficulty in being confident about employees' productivity levels" as the biggest obstacle to transitioning to hybrid work. Employees and employers gave almost opposite answers in similar proportions. Only 12% of employers said they were confident their teams were productive.

Another notable point is that the Asia-Pacific (APAC) region evaluated telecommuting productivity more negatively than North America. In North America, 90% of employees rated telecommuting as productive, higher than the average. However, only 83% of respondents in the APAC region answered "yes" to the same question. The proportion of management who found it difficult to be confident in telecommuting employees' productivity was 77% in North America and 89% in APAC, a gap of more than 10 percentage points. This is interpreted as reflecting cultural differences in accepting telecommuting productivity.

Microsoft, which conducted the survey, explained based on global user data from its collaboration platform 'Microsoft Teams' that since the pandemic, the time employees spend in meetings per week increased by 153%, and 42% of employees multitasked by sending emails during meetings. This means that workloads actually increased during COVID-19. Microsoft analyzed, "Despite increases in employees' working hours, number of meetings, and other work activities, management feared productivity losses due to employees not working."

The difference in views on telecommuting productivity between management and employees is not unique to Microsoft's survey. A survey conducted by WFH Research, led by Professor Bloom and others, found that managers believed productivity decreased by 3.5% due to telecommuting, while employees rated their productivity as increasing by 7.4%. This difference in opinions about productivity is a core reason for the intense recent debates between employers and employees over office attendance.

◆ Emergence of the Neologism 'Productivity Paranoia'

Various neologisms emerged during the COVID-19 period. One of them is 'productivity paranoia.' It refers to the conflict of opinions over telecommuting productivity, where management and employees distrust each other and continuously seek confirmation. It is akin to the saying, "Out of sight, out of mind." Related terms such as 'productivity theater' and 'digital presentism' have also appeared. These describe employees frequently reporting their current work status to counter management's distrust. All imply the need for employees working remotely, out of management's sight, to prove they are working diligently during work hours.

Controversies over various corporate policies introduced to monitor telecommuting employees during COVID-19 also fall into this context. Kakao introduced a 'Metaverse Work System' in June last year, requiring employees to stay connected via voice channels during work hours, sparking controversy. The measure emphasized real-time connection as if one could hear their name called immediately in the office. Employees protested, calling it a 'panopticon-style surveillance system' and saying, "Not all employees are on standby 24/7," criticizing it as excessive interference. Kakao eventually retreated and said it would reconsider the direction just one day after the announcement.

Professor Eyal Fishbach, a renowned psychologist at the University of Chicago Booth School of Business, analyzed this phenomenon in an October interview with BBC, saying, "Time is easy to measure and thus the most common productivity metric," and "It is easier to track the time employees spend in the office than the quality of ideas." He added, "Compared to face-to-face work involving continuous interaction, it is difficult for managers to grasp the time spent working remotely," and "If physical work presence is not visible, it is easy to assume the work should be completed faster."

Satya Nadella, CEO of Microsoft, pointed out corporate productivity paranoia when announcing the aforementioned survey results in September last year. According to Fortune magazine, at an event in October of the same year, he said he is "someone who believes some office attendance is necessary," but emphasized, "As leaders and managers, we need to clearly define the company's and team's goals and how people should collaborate and communicate."