James Ward, Corporate Finance Director at PKF Smith Cooper, explores the impact of working from home and nationwide changes to working practice on productivity in the UK.

The COVID-19 pandemic transformed the way we work. Spending nine to five at the same desk in the same office used to be the norm for white collar workers, but since 2019 the number of home workers has more than doubled, rising from 14.5% of all UK workers to 30.6%.

Since this significant change to working practices, there has been no shortage of research into the impact of working from home on both employee and employer. From a business perspective though, perhaps the most important question of all is what impact does it have on productivity?

Does working from home increase productivity?

The general consensus among employees seems to be that working from home increases their productivity – a recent poll by YouGov found that 60% felt more productive in their own abodes, while 23% noted no difference between home and office, and only 17% said they were less productive. Other research by Finder UK reported similar findings, with the majority of employees claiming increased productivity at home.

Employers, however, seem less confident. The same YouGov poll asked ‘business decision makers’ if their direct reports were more productive at home and 35% of them felt they were not. 38% also thought that most people in their company were less productive working from home, while only 25% felt they were more productive (the remaining 26% noted no difference).

Despite the doubters, many businesses have recognised the merits of working from home. 41% of businesses that reported using or intending to use homeworking as part of a permanent business model reported increased productivity as a reason for their decision. Additionally, research by CIPD found that 41% of employers reported that home and hybrid working had increased productivity within their organisation.

Other factors at play

Workforce demographics

It is important to note that working from home experiences can vary significantly by age. Whereas more than half of 30 to 49 year olds (56%) and 50 to 69 year olds (60%) reported fewer distractions whilst home working, only 32% of 16 to 29 year olds felt the same way (ONS, 2021).

Employee satisfaction

It is impossible to look at the impact that working from home has on productivity without considering the impact on employees – the two are intrinsically linked. Since the start of the pandemic, there have been lots of studies conducted into the benefits of working from home. The most commonly reported include better wellbeing and mental health as well as improved work/life balance.

Remove work location from the equation altogether and employee satisfaction has been found to have a positive impact on overall productivity, with research from the University of Oxford reporting that workers are 13% more productive when happy. Employee satisfaction is naturally key to staff retention.

Is hybrid working the future?

A mix of working from home and in the office, hybrid working offers a compromise to fully remote or full-time office working and could provide a middle ground for those employees wanting to work from home and the employers keen to keep them in the workplace.

According to a 2021 report from the Office for National Statistics, hybrid working is actually the preferred option for employees that have the option to work from home. 85% of home workers said they wanted to use a hybrid approach to home and office working in the future.

Hybrid working in the UK could also lessen the impact of the disadvantages that are associated with remote working. For example, almost half (48%) of home workers reported that they had experienced difficulties in collaborating with other people when working from home, while one in five remote workers said they had struggled with loneliness.

Four day work week trials

Since the pandemic, there seems to be a greater openness to exploring different ways of working among businesses. The four day work week is one working practice that has increased in popularity. 98 businesses across the UK have already made the leap with a permanent commitment to four days rather than five and many more employers are conducting trials to see if a shorter work week is compatible with their businesses.

A six-month trial of the four day week in the UK is currently underway, with 72 businesses involved. Of the 41 businesses that responded to the trial’s midway point survey, 46% stated that productivity levels had stayed the same, 34% said they had improved ‘slightly’ and 15% said they had improved ‘significantly’. Notably, 86% of respondents reported that they were ‘extremely likely’ or ‘likely’ to continue the four day week post-trial.

The verdict

So, how does working from home impact productivity? The answer depends on who you ask. While most home workers are convinced that working from home can increase productivity, the jury is still out for many UK employers.

With varied experiences and preferences on working location being expressed by workers in the UK, flexibility is likely to be crucial to the success of future working practices. How this flexibility looks will naturally vary by industry and largely depend on what is right for your business.

If you are currently experiencing productivity problems within your organisation, a change in working patterns could be one solution worth exploring.

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