‘Home work’ tests nation’s productivity drive

While some fear productivity and innovation suffer when working from home, others believe it’s a revolution.

The sudden transition to home-based working means companies and employees are scrambling to replicate the office environment in a virtual space.

Thrust into makeshift offices, Australians are adjusting to the strange new reality of working from home, and while some commentators fear productivity and innovation are suffering, others believe it will lead to a working revolution.

“At the moment it just seems like people are flailing their hands in the air and running around in circles,” says Juliet Bourke, who leads the Australian diversity, inclusion and leadership practice as a human capital partner at ­Deloitte.

She says the sudden transition to home-based working means companies and employees are scrambling to replicate the office environment in a virtual space. But the momentous shift has left people with “information overload” while simultaneously dealing with the emotional and mental toll of the evolving health crisis.

Anxiety and technology issues are just two “pitfalls” that Stanford economics professor Nicholas Bloom says will contribute to declining productivity. He fears the end result will be “slumping” innovation.

“Most of the innovations we make at work come from group interactions, discussions and brainstorming sessions. Worse still, much of scientific, engineering and medical innovation occurs in labs and facilities,” says Bloom, who is also a co-director of the Productivity, Innovation and Entrepreneurship Program at the National Bureau of Economic Research.

“So both on an individual level the COVID working-from-home experience is sapping productivity, and also the progress of science is being held back.”

The loss of innovation partially stems from the “water cooler” effect. Over a decade ago, researchers at the Massachusetts Institute of Technology showed that productivity improved by up to 15 per cent in office environments where people routinely had social interactions. Ideas that seemed serendipitous were actually the result of gossip and small talk.

Jane Gunn, partner in charge, people & change, at KPMG Australia, agrees. She says ideas sparked by hallway conversations may be lost in artificial video calls, but ultimately productivity will be contingent upon leaders facilitating rather than simply leading.

“A lot of our leaders have skills that aren’t necessarily suited to this environment, so they’re going to have to shift the way they operate. How do I help an individual ensure that they’re heard, rather than just tasking them?” says Gunn, who has a PhD in organisational behaviour and strategy.

“For many of us, seeing people in the workplace has become a proxy for them being productive. It’s not real and hasn’t been for a long time. We need to set new ways of setting expectations.”

For John Winning, chief executive of retailer Appliances Online, the answer has been adapting his expectations to meet the needs of his 250 staff.

“We’ve moved our customer service team to a remote working environment. And you have to take the good with the bad. Our team members with children have said managing the two is quite difficult, but you balance that out with the people who are more efficient when working from home,” says Winning.

Research conducted by Bloom has shown that in the right environment employees can thrive when working from home. A controlled trial with 1000 workers from Chinese travel company Ctrip revealed that employee performance increased by 13 per cent, while quit rates fell by 50 per cent.

The difference comes down to the “big four” productivity pitfalls: children, noise, poor equipment and isolation. People have been forced to make do with difficult circumstances.

“Even without kids, many people are in very cramped conditions — in fact, folks without kids often live in small, often shared, apartments in the centre of cities. So working from home can be noisy — the spouse/flatmate is also taking calls,” he says.

For micro-investing platform Raiz, the transition to remote working has been relatively seamless. Because flexible working arrangements were already in place, employees felt comfortable using online communication. Instead, CEO George Lucas says he’s been focused on ensuring his team doesn’t feel overwhelmed.

“The pandemic overloading has changed the environment a little bit. But we’ve organised company-wide calls so people can just be silly and so people can feel connected,” Lucas says.

Professor Kim Felmingham, chair in clinical psychology at Melbourne University, says maintaining social connections and managing expectations are crucial to managing the mental health risks.

In addition to looking after employees, managers need to be conscious of their own wellbeing throughout this volatile and stressful period.

However, as companies recalibrate to the steep learning curve, “green sprouts” are beginning to show, says Bourke.

She points to Hong Kong as a place where people have settled on better frameworks for working from home.

“The managing director of Gilead Hong Kong told me this morning that he’s seeing higher levels of quality decision-making and therefore productivity in his team, because they now have protocols on calls where everyone gets to speak,” she says.

“So in some ways there’s nowhere to hide on a video conference call.

“If there’s good scheduling and ways of working, it might actually lift productivity to a degree.”

The by-product of these more inclusive meetings, Bourke says, is greater democratisation of the workplace as people who previously weren’t comfortable speaking up are given a platform to consistently express themselves.

“The inclusion of more diverse voices could compensate for the lack of serendipity.

“But what that requires is for us to be very deliberate about connecting with people who aren’t in our immediate tribe. That’s the tension,” she says.

Some are already looking past the crisis. In a decade, Bloom says, this period will be seen as a “revolution in working”. Lucas agrees. The ability of his overseas team to quickly adapt means a lot more staff will be working from home with a lot less staff travel.