Working from home hits productivity, companies warn

Companies are twice as likely to have found productivity falls when staff operate remotely than to have discovered any improvement

Working from home risks damaging the nation's productivity, with bosses frequently finding staff are less useful when logging in from the kitchen table compared with coming into the office.

Twice as many businesses said productivity fell when staff worked from home as found an improvement, meaning the experiment in remote working could soon come to an end for many employees.

Productivity, which measures output per worker, is key for the UK's future prosperity and allows wages and living standards to rise over time. It was already a problem before the pandemic struck and empty offices appear to be worsening the situation.

Of those bosses who have increased home-working through the pandemic, almost one-quarter told the Office for National Statistics that productivity has got worse. Just 12pc said output had improved as a result. Around half said it made no difference.

It is a blow to those who expect to be able to work from home forever, or see the kitchen-office as a great success that will change the nation’s habits permanently.

As a result, less than a fifth of businesses expect to keep more working from home after the pandemic is over, with two-thirds set to go back to their old setup permanently. The remainder have not yet decided whether they will bring workers back.

This varies by industry. In education, just over half of employers expect more home working to be used in future, dispute just 3.4pc finding that productivity improved, while 13pc said it had worsened.

In information and communications the share is just over 40pc, closely followed by professional, scientific and technical firms, as well as those in water and waste utilities.

But while those industries really could be upended by remote working, others are far less keen.

No employer in accommodation, food services, transport or storage said they will continue any home working. Only one-in-20 construction businesses plans to continue with the experiment, with just one-in-12 in wholesale and retail anticipating retaining any changed habits.

Across the manufacturing, arts, entertainment, retail, wholesale, real estate and health and care industries, fewer than 20pc plan more working from home in the long-term compared to pre-Covid practices.

Ian Stewart, chief economist at Deloitte, said he expected an increase in home working in future as the pandemic accelerated slow trends in this direction, but not a complete shift because offices were useful and densely populated cities fostered new ideas, professional relationships and competition.

Industries such as financial services, which have shown home working can work well, “have drawn down on the stock of knowledge, relationships and social capital that were built up in the workplace. In this world we need the office, or some version of it, to renew these assets,” he said.

“It is unlikely to conform to the once standard template of ‘nine to five, five days a week’. Homeworking will play a bigger role. Yet most people also want to spend some of the time in the workplace. A hybrid form of work, one which captures more gains from home-working without losing those that stem from agglomeration, is the most obvious outcome.”

The London Chamber of Commerce and Industry found more than 80pc of business leaders want flexible rail fares introduced to enable part-time commuting, with just over half still encouraging staff to work from home to maintain social distancing in the office.

More than a third have adopted flexible shifts to space staff out.

It came after a CBI and PwC survey of the financial services industry found three-quarters of firms were reviewing their office space requirements, as expensive city centre sites go under-used.

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