A flash in the pan or a permanent change? The growth of homeworking during the pandemic and its effect on employee productivity in the UK

This paper has three aims: Firstly, it puts the pandemic-induced surge in homeworking into context by charting trends in homeworking in the UK since the early 1980s. Secondly, it examines what effect the growth in homeworking during the pandemic has had on employees' self-reported levels of productivity. Thirdly, it assesses whether the spike in homeworking is a flash in the pan or a permanent feature of the post-pandemic world.

The paper uses cross-sectional and longitudinal data taken from three nationally representative surveys of workers: (1) the Labour Force Survey (LFS), an official government survey carried out between 1981 and 2019; (2) a special module of the Opinions and Lifestyle Survey (OPN), also an official government survey, which has been run every week since the pandemic began in March 2020; and (3) the Understanding Society Covid-19 Study, an online survey of the same people interviewed on six occasions during 2020.

The recent surge in homeworking in the UK during the pandemic has been dramatic. Before 2020, it had taken almost 40 years for homeworking to grow by three percentage points, but its prevalence grew eight-fold virtually overnight as people were instructed to work at home if they can because of the pandemic. Despite theories and predictions to the contrary, employees reported that their productivity was not adversely affected. Seven out of ten employees said that they were able to get as much done while working at home in June 2020 as they were able to do six months earlier. By September 2020, this proportion had risen to 85%. However, around one in six homeworkers reported that their productivity had fallen.

While there are solid theoretical reasons for the paper's findings, these data do not allow us to test all of the mechanisms involved. In addition, our outcome measure relies on employees' self-reports of how their hourly productivity changed when working at home and is not based on a direct measure of changes to output per hour. However, surveys of employers also suggest that, on average, productivity has not been reduced by the pandemic-induced surge in homeworking.

This paper argues that a higher level of homeworking is here to stay. Nine out of ten employees who worked at home during the pandemic said that they would like to continue working at home when they did not have to. Furthermore, those keenest to continue working at home were the most productive, hence providing a business case for a sustained increase in the prevalence of homeworking after the pandemic has passed. Nevertheless, the experience of homeworking varies with those with higher domestic commitments reporting significantly lower levels of productivity.

There is an urgent need to investigate what effect enforced, as opposed to voluntary, homeworking has had on employee productivity. In addition, in order to decide whether continued homeworking should be encouraged or discouraged, policymakers and employers need to know what effect continuing with these arrangements is likely to have on employee productivity. This paper answers these questions using robust survey data collected in the UK throughout 2020, complemented by evidence taken from a variety of employer surveys.