 to just $20bn (£15bn), and other companies who thrived when remote work was all the rage are also now struggling. On Tuesday, WeWork, a shared office company once worth $47bn (£37bn), said it fears bankruptcy as demand for co-working spaces decreases . At the root of all of these developments is an increasingly common perception among business leaders that working from home does not increase productivity, let alone maintain it at existing levels. Indeed, the most recent research is producing findings that are hostile to the idea that working from home is good for output. A study of newly hired Indian data-entry workers by MIT and UCLA economists this week identified a decline in productivity of 18 per cent when comparing office workers to home workers. Another found employees at a major Asian IT business were 19 per cent less productive when working at home, while a recent Stanford analysis of multiple studies reported an average drop in productivity of between 10 per cent and 20 per cent. For executives and employees alike, there is a sense that working in teams is a lot harder and less efficient when done remotely. Martin Sorrell , founder of WPP , the world's largest advertising and PR group, believes a workplace's 'cultural glue' disintegrates when workers are paid only to look at a screen from home. 'Initially, we were enthusiastic about flexible working, very enthusiastic about it, then I think our enthusiasm waned a bit and now we're in a sort of balanced position,' he explains. 'When I'm at my desk, I get to see my colleagues and create the team spirit which is difficult to replicate when you are remote,' adds Ankit Koomar, 40, who works in the office four days a week as finance director of Landmark, a London-based flexible workspace firm. 'What I dislike about working from home is the inability to collaborat){kind=link}
Covid put an end to the daily office commute for most of us, but increasingly bosses – and employees – are changing their minds about WFH
In the not so distant past, working from home was being hailed as idyllic. Covid brought an accidental workplace realisation, showing us how pointless it had been to dress smartly below the waist, how unnecessary to buy lunch every day, and how foolish to spend hours every day on gridlocked roads and cramped, delayed trains.
The white-collar workers of the world were thus liberated from the tyranny of ironing and £5 takeaway coffee – and they performed better at work because of it. During the pandemic, one study found a 6 per cent average increase in individual worker productivity at American Fortune 500 companies, while another put it at 5 per cent. It was all very good for business: companies could slash costs by closing their expensive city centre offices – as Google, Meta, John Lewis and Sainsbury’s all did – without any fear that employee output, and in turn revenue, would be affected.
But three years on, the working from home bubble has burst. In January 2021, as many as 14 per cent of all vacancies advertised in Britain were for fully remote work, but this has now fallen by more than half to just 6 per cent, according to data from British jobs firm Adzuna. The proportion of hybrid vacancies is also now more than eight times higher, rising from 2 per cent to 19 per cent, as companies cut back on the number of employees allowed to work entirely remotely.
Some firms, like Goldman Sachs and JPMorgan, are demanding staff return to the office full-time and others, including Apple and Blackrock, have abandoned fully remote work and ask staff to be in the office at least three or four times a week. This week, the irony was not lost on anyone when video conference app Zoom followed suit, telling its workers they must turn up in-person at least two days a week if they live less than 50 miles away.