The role of telework for productivity and well-being during and post-COVID-19 Key highlights of an OECD survey among managers and workers
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The role of telework for productivity and well-being during and post-COVID-19 Key Highlights of an OECD survey among managers and workers1
Summary
The OECD’s Global Forum on Productivity2 conducted an online survey – with support from Business at OECD (BIAC) and the Trade Union Advisory Committee (TUAC) to the OECD - among managers and workers from several countries to provide evidence on their recent experience and expectations for the future of telework and its impact on productivity and well-being.
Results show that a large majority of managers and workers considered their experience with telework during the COVID-19 pandemic as positive or very positive.
Managers find that the key benefit of telework for firm performance is that workers work more and also more productively. Workers are satisfied with telework mainly because they can save on commuting costs and time.
On the downside of telework, managers also cite several critical factors related to the reduction of knowledge flows, learning, and loyalty to the firm among employees, while workers noted the risk of feeling isolated. Many of these factors may, in the longer-term, hamper productivity growth.
Both managers and workers agree that it is preferable for both company performance and individual well-being that a large proportion of workers telework regularly, at an optimal level of 2 or 3 days per week.
Among the most desired changes in management and HR practices to maximise the productivity benefits of teleworking, both managers and workers consider coordination of on-site presence schedules to be key for ensuring that benefits from in-person social interactions do not diminish.
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Prepared by Chiara Criscuolo, Peter Gal, Timo Leidecker, Francesco Losma and Giuseppe Nicoletti. The authors are grateful for the comments received by Dirk Pilat. We also thank Business at OECD (BIAC) and the Trade Union Advisory Committee (TUAC) networks and the Energy Regulators’ Regional Association (ERRA) and Steering Group member contacts for the fruitful collaboration in disseminating the questionnaire among employers and employees. This document summarises the main findings from the survey. The full paper, including a more detailed description of the results and an extensive discussion of the various channels will be available in the autumn of 2021. 2
The OECD Global Forum on Productivity (GFP) aims to foster international co-operation between public bodies with responsibility for promoting productivity-enhancing policies. The GFP provides a platform on which participants will convene to exchange information and discuss best practices as well as a framework within which to undertake productivity analysis that is complementary to the OECD’s regular work programme.
2 The COVID-19 pandemic has caused a profound global shock, with far-reaching implications for our economies. Faced with the need to maintain social distancing to prevent the spread of the virus, many firms, to the extent possible, had to resort to telework (working from home – WFH – or remote work) to avoid shutting down their activities. Seen from this angle, the pandemic has become a watershed for the future of work since it forced firms to embrace new work arrangements, broke down the stigma associated with teleworking, and encouraged people – managers and workers alike – to invest in better using digital technologies. Yet, the net effects of these working arrangements on firm productivity and worker wellbeing, the appropriate organisational and managerial changes to be implemented as well as the future of telework remain unclear. While several surveys have collected evidence on telework, few of them focused on the role that should be played by public policies and managers to ensure that the productivity and wellbeing net benefits from telework are maximised (Barrero, Bloom and Davis, 2021; Cazes, Touzet and Martin, 2021; Morikawa, 2021; Ozimek, 2020; Taneja, Mizen and Bloom, 2021). To fill this gap, the OECD’s Global Forum on Productivity (GFP), in collaboration with Business at OECD (BIAC) and the Trade Union Advisory Committee to the OECD (TUAC), the Energy Regulators Regional Association (ERRA) and supported by GFP Steering Group members, developed an online survey, whereby both managers and employees were asked about their overall assessment of telework during the pandemic and their expectations as to the future of telework after the pandemic. The questionnaire also covered the perceived benefits and drawbacks of telework as well as the measures that managers and governments need to implement to facilitate the adoption of remote work and maximise its benefits for workers well-being and productivity. The survey builds on previous GFP work, summarized in Box 1, outlining the main channels through which telework can affect productivity as well as the role of public policies (OECD, 2020). Thanks to Business at OECD and TUAC, we obtained answers from more than 1,300 private sector managers and 3,400 workers from both the private and the public sector, from 23 OECD countries, Brazil, and Malaysia (with special thanks to the Malaysia Productivity Corporation). Also, thanks to the ERRA network, we could incorporate results from this group which constitutes an important part of the public sector. The survey was primarily meant to provide illustrative evidence in a timely manner and did not have the ambition to cover a large, representative sample of the whole population of firms or workers. Its key added value is to document the opinions and experiences of telework during the pandemic and the expectations for the future and how these vary for managers and workers. As an initial step to validate our sample, we cross-checked and confirmed a similar ranking across countries in terms of pre and during COVID-19 uptake of telework found in other recent studies that relied on alternative sources or larger samples - for the United States by Brynjolfsson et al. (2020) and Bick, Blandin and Mertens, (2021); across countries by Eurofound (2017), Eurofound (2020) and Eurostat (2021), and by colleagues at the OECD (Ker, Montagnier and Weber, 2020).
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Box 1. What may happen to productivity if widespread telework becomes the “new normal”? The COVID-19 crisis may catalyse the wider use of telework also in the long run, but how this unprecedented shift in working models affects firm performance in the long run remains uncertain. A recent OECD policy note (OECD, 2020) explores the channels and factors that shape the link between telework and productivity. Existing evidence on telework before the crisis provides insights into the mechanisms through which telework can improve or harm productivity in “normal times”, when employees can choose more freely how much to work from home. Several lessons stand out:
Telework has the potential to raise or harm firm productivity through several, countervailing channels (Figure 1, Panel I). Firms may be able to reduce costs (e.g. through reduced need for office space), but fewer faceto-face interactions in the workplace can impair communication, limit managerial oversight and reduce knowledge flows. To the extent that workers face fewer distractions and feel more content about their work, their efficiency may increase, but telework can also lower their satisfaction.
Worker satisfaction and well-being are key to achieve productivity gains: they need to improve sufficiently so that the positive effects through increased worker efficiency offset the negative effects (e.g. from fewer face-to-face interactions). Thus, genuine efficiency gains are more likely if workers and firms alike benefit from telework.
Efficiency gains may be highest when workers telework less than full-time and are free to choose. These gains are driven by increased satisfaction, which may rise most at low levels but suffer at very high levels of telework, because of fewer opportunities for face-to-face interactions. This implies an inversely U-shaped relationship between telework and efficiency at the worker-level, with a “sweet spot” at intermediate levels of telework (Panel II).
Figure 1. Telework and productivity: A simple framework Panel I: The countervailing channels between telework and firm-level productivity
Panel II: An inversely U-shaped link between telework and worker efficiency
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Telework has been well received by managers and workers Figure 2 reveals that 63% of managers and 74% of workers had a positive assessment of their teleworking experience from, respectively, the point of view of company performance and worker well-being. The shared positive sentiment towards teleworking will likely help reduce its “stigma” (Barrero, Bloom and Davis, 2021) as well as contribute to a greater “social” acceptance of this arrangement in the future.
Figure 2. The experience of managers and workers about telework during the initial wave of the COVID-19 pandemic 40%
Share of respondents
35%
Workers
Managers
30% 25% 20% 15% 10% 5% 0% Very negative
Somewhat negative
Neither good nor Somewhat positive bad
Very positive
Source: Telework survey of OECD Global Forum on Productivity.
In addition, we found that the views of managers about the performance of their company were systematically more positive when the share of the workforce doing regular telework was higher before the pandemic, confirming that previous experience with such arrangements helped to better adapt to the crisis (Bai et al., 2021). The assessment of managers was also systematically and negatively related to their concerns about the quality of ICT infrastructure and their impaired ability to monitor staff. 35% of firms in our sample have supported workers’ purchases of IT and office equipment during the pandemic (tangible capital), while 20% of them have provided training to equip managers and workers with the skills to work remotely (intangible capital). These investments have contributed - together with the organization of regular online meetings, as also outlined in DeFilippis et al. (2020) - to managers’ positive assessment of the entire period. Overall, the survey results suggest that companies opted to assume most of the fixed costs of setting up telework facilities (Barrero, Bloom and Davis, 2021) in an attempt to catch up with competitors that already had a higher level of telework before the crisis (Bai et al., 2021).
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Desired intensity of telework post-COVID-19
Figure 3. Countries with a positive teleworking experience during the pandemic are more likely to increase the intensity of telework post-COVID-19 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20%
CRI
JPN
DEU GRC
MYS
ESP
PRT
3.6
3.7
3.8
BRA
ITA
SWE 3.5
USA
y = 0.226x - 0.4931
3.9
4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
5
Experience of telework during COVID-19 Note: The experience of telework is measured by the assessment of managers about their firm’s performance during the first wave of the COVID19 pandemic on a scale from 1 (very negative experience) to 5 (very positive experience). The desired intensity of telework is measured by the share of employees who should do telework regularly (at least once a week) according to managers to maximise firm performance. The dots represent average responses by each country. Source; Telework survey of OECD Global Forum on Productivity.
Figure 3 confirms these results. On average, across countries, there seems to be a positive association between the experience of managers during the pandemic and the desired intensity of telework in their company, suggesting that the COVID-19 crisis represented a turning point for the adoption of this working arrangement.
Perceived advantages and drawbacks of telework Figure 4 illustrates that more than 60% of managers in the sample believed that workers were more productive while working from home mainly because in their opinion workers were more concentrated and accurate in their work. The higher productivity of workers when teleworking has been confirmed by Barrero, Bloom and Davis (2021) as well as by the randomized experiments reported in Angelici and Profeta (2020) and Bloom et al. (2015), even though the finding is not universal in all countries and sectors (Gibbs, Mengel and Siemroth, 2021; Morikawa, 2021). In addition, 60% of managers also considered that employees worked more as a result of a decrease in time spent commuting.
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Sahre of managers
Figure 4. Advantages of telework according to managers 80% 75% 70% 65% 60% 55% 50% 45% 40% 35% 30% Lower turnover Easier to recruit Lower office Possible to Workers work talent space costs employ workers more living far away All sectors
Knowledge intensive services
Manufacturing
Workers productivity increases
Other private sector services
Source: Telework survey of OECD Global Forum on Productivity.
More than half of managers consider that cost reduction stands out as an additional benefit of telework. Interestingly, those who emphasised this point were also more likely to say that they would allow their workforce to take regular telework for three days or more per week. Saving on office space could have an indirect effect on productivity-enhancing innovations by freeing up additional resources for productive investments. All these benefits were considered even more crucial by managers in the knowledgeintensive services sector. Concerning the downsides, a large majority of managers felt telework could lead to difficulties in working as a team, decreased loyalty to the firm, and reduced training. Overall, this can hamper the knowledge flows in the firm and lead to long-term losses in productivity. While the risk of cyber-attacks was considered a relatively less important issue by private sector managers, it emerged as a top priority for public sector managers in energy regulator organisations. Focusing on the worker side, the survey revealed that nearly all employees considered lower travel expenses as the primary perceived benefit of telework, closely followed by the possibility of working on tasks that require more concentration and of saving on commuting time. All these factors have the potential to raise both worker well-being and efficiency at the same time and thus provide an additional channel through which overall productivity can be fostered (Bloom et al., 2015). Moreover, workers underlined that they now enjoy greater flexibility in choosing when and where to work. This last point could lead to workers moving away from urban centres towards outskirts and suburbs, creating a geographical “doughnut” effect (Ramani and Bloom, 2020) with potential long-run impacts on real estate and land markets (Behrens, Kichko and Thisse, 2021). Additionally, respondents stressed that telework allows them to better accommodate competing household duties. While the pandemic disproportionately hit women who usually took on a larger part of the burden caused by the sudden lack of childcare facilities (Del Boca et al., 2020; Queisser, Adema and Clarke, 2020), widespread telework among men as well might hold the potential to reduce the gender gap in the share of domestic and care work during normal times (Alon et al., 2020; Sevilla and Smith, 2020), providing the right policies are in place. A slightly extended version of the survey – which collected the gender of respondents and which was run among public organisations part of the ERRA network – revealed that women also see a risk of reduced equal opportunities and lack of visibility and advice from colleagues as a consequence of telework.
7 As for the downsides, the absence of social interactions – which may become even more visible in the long run – and the blurring of the line between working and private life were perceived as the decisive drawbacks of telework by more than 80% of workers. Figure 5 summarizes these results.
Figure 5. Key advantages and disadvantages
Sahre of respondents
Panel A: The two most highly ranked advantages by managers and workers 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Workers work more Workers productivity More concentration increases at home Managers
Lower travel expenses
Workers
Share of respondents
Panel B: The two most highly ranked disadvantages by managers and workers 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Less loyalty to the firm
Working as a team is difficult
No separation between work and private life
Managers
Lack of social interaction
Workers
Source: Telework survey of OECD Global Forum on Productivity.
What are the expectations post-COVID-19? Overall, both managers and workers agreed that, in the future, the share of the workforce doing remote work will be higher compared to the pre-COVID period but lower than the extreme levels attained during the pandemic - in line with results from other surveys (Bartik et al., 2020). However, around one-third of private-sector managers believed the amount of telework in the future will not change significantly compared to the pre-pandemic period. Figure 6 showcases how, while telework will likely be the new normal for around 70% of workers in the knowledge-intensive services sector, only around 23% of workers in construction and manufacturing will have this opportunity. Of course, this can be explained by the extent to which tasks can be performed
8 remotely in each sector (Dingel and Neiman, 2020). However, this arrangement is likely to have substantial distributional impacts on well-being since the feasibility to carry out telework is much higher among highskilled and better-paid workers (Behrens, Kichko and Thisse, 2021; Brussevich, Dabla-Norris and Khalid, 2020). Moreover, the survey revealed that the share of the workforce engaging in this practice will be higher in large companies relative to medium and small ones, especially in the manufacturing sector.
Figure 6. Telework adoption will be more widespread after the pandemic 90%
Share of workforce
80% 70%
Regular teleworkers before the crisis Regular teleworkers during the crisis Regular teleworkers after the crisis
60% 50% 40% 30% 20% 10% 0% Manufacturing
Construction
Other private sector Knowledge intensive services services
Note: The share of the workforce that teleworked regularly (at least once per week) pre-crisis, during the crisis and what is expected as the ideal setting for post-crisis; average across managers. Source: Telework survey of OECD Global Forum on Productivity.
As shown in Figure 7, a “sweet spot” of two-to-three teleworking days per week has been considered preferable by managers and workers both for the performance of the company and the welfare of employees. Other surveys for the UK found a similar result (Taneja, Mizen and Bloom, 2021). This arrangement could optimally balance the advantages and the disadvantages of telework (Barrero, Bloom and Davis, 2021) but can lead to challenges in terms of managing a “hybrid” team that is present partly onsite and partly online.
Figure 7. The ideal amount of telework for the performance of the company and for individual wellbeing
Share of workforce
70% 60% Five days per week
50%
Four days per week 40%
Three days per week
30%
Two days per week
20%
One day per week
10%
Less than once per week
0% Workers
Managers
Note: Responses from workers represent the perspective of individual well-being, while those of managers capture the perspective of firm performance. The remaining category – not indicated – refers to “Never”, that is, no telework at all. Source: Telework survey of OECD Global Forum on Productivity.
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Which role for managers and public policies? To conclude, Figure 8 includes a set of HR practices and government interventions that managers and workers indicated as helpful to facilitate an easier adoption of teleworking in the future. They both agreed that to facilitate knowledge sharing and socialisation among colleagues, workers must have some degree of coordination in their schedules to ensure that they have the chance to meet in person at the company venues. Additional priorities included the provision of ICT equipment, along with training in hard skills (ICT) and soft skills (managerial practices and the independence of employees).
Figure 8. What measures should be implemented to maximise the benefits from telework? Coordination of schedules Provision of ICT equipment Training of managers Training of workers on ICT Training workers to work indepedently Investments in ICT at the company Space reorganisation None Switch to delivery-based contracts Increasing monitoring Hiring remote workers
Workers 0%
10%
20%
30%
40%
Managers
50%
60%
Share of respondents Note: Responses from workers represent the perspective of individual well-being, while those of managers capture the perspective of firm performance. Source: Telework survey of OECD Global Forum on Productivity.
Accordingly, governments will have an important role to play on several fronts which can be grouped around three areas: enabling, empowering and protecting. First, enabling telework for all by supporting low-income households and removing ICT bottlenecks, hence facilitating a smooth adoption of teleworking arrangements (which necessarily require stable and high-speed internet connection) in both urban and rural areas (OECD, 2021a; OECD, 2021b). Second, about empowering managers and employees to carry out telework successfully. To avoid teleworking benefits being reaped only by high-skilled male workers in large firms, governments should design policies to increase the teleworking capacity and the ICT skills of low-skilled workers and SMEs, while building supporting welfare infrastructures – notably related to childcare – that help teleworking women. Moreover, policies should promote better housing affordability and support investments in home environments conducive to teleworking. Finally, manager’s training which emerged as a top priority for both managers and workers (see Figure 8) - should follow the best available managerial practices developed to successfully manage “hybrid” (partly on-site, partly on-line) teams. Third, employees should be protected from excessive amounts of telework especially in inadequate conditions, by adapting the legal environment: employment regulations should ensure that the amount of telework remains a choice made jointly and in agreement by employers and employees (“right to disconnect” clauses) and is done in a safe manner (health insurance coverage for remote work). Social dialogue will be pivotal to achieve these goals.
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