More and more employers are demanding workers return to the office full-time or for a greater portion of the working week, claiming this will improve productivity and business success. But how do we really define productivity, and does being in the office really make a difference? Jo Faragher reports
Last month, Amazon told employees that they must return to the office five days a week from January 2025.
The company claimed that “returning to the office the way we were” would mean employees collaborate more effectively, connect more, and “deliver the absolute best” for the business.
The tech giant is among a growing number of employers issuing return-to-office mandates or more intensive tracking of workers’ output, and one of the key arguments is that this will increase productivity.
Even chancellor Rachel Reeves, in her speech at the Labour party’s annual conference, argued that remote working has made it harder for businesses to become more efficient.
“I am all for being flexible and making sure that people can balance work and family life, but I do think that productivity gains are more likely to happen when you have that sharing of ideas and bringing that together,” she said.
Digging a hole
But what do we mean by “productivity gains”? On a national level, according to the Office for National Statistics, productivity was estimated to be 0.1% lower in the second quarter of this year compared to the same period of 2023, but 1.4% higher than before the pandemic.
Productivity
It’s growing, but too slowly, some argue. Productivity in the UK has grown by around 2% per year since the 2008-09 recession. In 2023, the UK was fourth highest out of the G7 countries, based on GDP per hour worked.
Nigel Driffield, professor of international business at Warwick Business School and a lead at The Productivity Institute, says: “The problem we have is that the best measure of productivity from a labour perspective is the value added per person per unit of time [the ONS measures output per worker per hour].
“This means you can compare many things but it’s a terrible measure if you’re digging a hole. A single person using a digger for an hour will still dig a bigger hole than one using a spade. It’s all based on the skills and capital employees have to work with.”
This is relevant to discussions about working from home, he adds, because if there’s an issue with someone’s output because they’re working remotely, this could be down to a lack of investment (in equipment, for example), or skills (the task has not been explained fully or they need training). Their productivity will improve if either (or both) of these things are addressed.
Professor Driffield argues that for early career employees, office time can be beneficial for productivity because they assimilate skills and receive crucial knowledge from more experienced staff. “Certain things that involve a transfer of knowledge from senior people to junior people can be hard to replicate remotely – those more intangible things, they’re harder to do online,” he says.
Motivation and trust
The companies now demanding employees to return to the office seem to imply that presence means productivity, but how true is this?
Some surveys suggest that working from home can actually make employees more productive because they enjoy the autonomy afforded to them.
A poll by International Workplace Group in June showed that three-quarters of employees felt more productive and motivated in their roles in a hybrid working arrangement. The same survey found that, since splitting time between home and the office, 79% felt less drained and 78% less stressed, and 86% felt they could cope better with day-to-day life.
It’s no coincidence that a number of employers promoting a return to the office hail from industries such as law and professional services, where “billable hours” dictate to some extent employees’ pay, promotions and benefits.
PwC recently announced, for example, that it would begin tracking employees’ working locations and that this data would be sent to them each month, alongside their chargeable hours.
Hours in, productivity out?
Placing targets on workers to be on-site for a set number of hours – or “always on” if they do work remotely – could have the opposite effect.
Another piece of research from HR tech supplier Workhuman found that more than a third of employees fake working activity because they feel managers have unrealistic expectations of them.
Workhuman’s research on “pretend productivity” showed that employees feel they are expected to reply immediately to messages on Slack or Teams and that 66% of employers look solely at the volume of work completed to measure engagement.
Gillian McKenna, chief people officer of Generation, a charity that widens accessibility to careers, says that over-simplified mandates could risk alienating potential recruits and reduce the diversity of candidates available.
But the key thing lacking in the “presence equals productivity” argument is a clear evidence base, she argues.
“What’s missing in these discussions about returning to the office is the why,” she says. “Companies should be able to say ‘this is what has changed since people were working from home’, using data, and explain why being in the office would address that.
“Managers and senior teams clearly don’t feel like a job is being done well, but are they setting objectives, are they being clear? Usually there is some sort of performance framework or managers check in with employees.”
Don’t squeeze the lemon
What role does HR have in boosting productivity growth? Analysis from the Productivity Institute argues that there are five key drivers for company-led productivity: innovation and digital adoption; marketing the brand as an asset; access to finance; worker skills and engagement; and management competencies.
The final two factors are people-related, but its research also argues that HR executives have an “inconsistent understanding of productivity due to siloed thinking and jostling HR functional priorities”.
In order to make an impact on productivity, it advises, employees must see discussions about productivity as “attractive” rather than alienating.
“Employees can see discussions about productivity as just another way to squeeze more juice out of the lemon,” one executive told researchers, highlighting the fact that if managers demand an increase in productivity, many employees will fear a hidden agenda about automation or redundancies.
Instead, tying productivity to a larger purpose – sustainable growth in the future – can bring staff on board.
McKenna agrees: “This all comes back to trust. Employees need a clear set of objectives and how they are allowed to meet them. Lead with trust first. Threatening people with disciplinary action is not motivating.”
What’s missing in these discussions about returning to the office is the why.” – Gillian McKenna, chief people office, Generation
There’s also an argument that for many employees, spending time with colleagues can lead to less – rather than more – being achieved. Saving commuting time and money can also be a strong motivator.
Justina Raskauskiene, human resources team lead at e-commerce marketing platform Omnisend, says: “Many people notice that individual tasks often get done faster at home than they would be done in the office. Some people can become less productive when they return to the office.”
Voting with their feet
Ultimately, doggedly insisting that office-based work is the most productive and best for the business could backfire on employers who struggle to recruit and retain talented staff. According to the Green Insurer, a fifth of people would resign if their employer announced they could no longer work from home for at least some of the week.
Justina Raskauskiene argues that Amazon could struggle in this regard after issuing such a mandate.“Taking away the opportunity for people to work remotely can harm a company’s chances of attracting the best talent in the job market. The choice of future candidates will be limited to people working in certain cities that have Amazon offices,” she says.
However organisations choose to measure their employees’ productivity, they will always need to have enough feet on the ground. Providing the right environment for the best talent and offering clear expectations on what they need to produce could have more impact than any return-to-office mandate.
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