Introduction

Working from home provided a temporary remedy to the issue of labour shortages induced by the Covid-19 lockdowns. Whilst this statement is valid, the work type has its glaring upsides and downsides which may have been ignored when being implemented during the crisis and continued thereafter as a ‘new normal’. In this essay I will discuss how working from home can cause loneliness and a reduction in tacit knowledge through the loss of spontaneous interactions. This loss of spontaneous interactions would specifically affect those younger workers as they are less able to make conversation with more senior colleagues to gain insight which would in turn increase productivity. On the other hand, firms may benefit from at-home work as it could reduce a firm's operational cost and may actually increase productivity through the potential usage of alternative face to face media, such as virtual meetings. Furthermore, a reduction in absenteeism could also occur triggered by the removal of the early work commute. Overall then, this essay will conclude by arguing that a mutual balance can be created between firms' needs and employee wants through the usage of hybrid work.

Loneliness and its Links With Remote Work

A key issue that arises with employees working from home is increased loneliness by reducing the amount of informal interactions with co-workers. These informal interactions can foster positive workplace relationships and ease the transfer of soft skills which aid in efficient interactions with other people. Furthermore, greater connections in the workplace can increase productivity, reduce work stress and increase work engagement which is a state in which employees are more dedicated and absorbed into their work (C. Birmingham et al, 2024). Moreover, supportive workplace relationships would help to alleviate work stress by providing people with a “listening ear” (C. Birmingham et al, 2024). Younger workers, with lower stress tolerance and resilience (Prerna Varma et al, 2020), may struggle more due to their inexperience. This could mean that they could have more issues completing their work, making it important to have someone more senior to seek guidance from, which may not occur with remote work. The CORoNaWork project in Japan showed that participants who worked remotely 4 or more days per week marginally reported feeling lonely more than those who did not work remotely (Miyake et al, 2022). Although there is a shown relationship between working from home and loneliness, the project also revealed older workers (50-65) reported a higher proportion of loneliness (39.3%) compared to younger workers with 29.8%. However, even if these younger workers felt less lonely, research suggests there is still a fall in productivity due to the limitation in rich, face to face interactions which are crucial for imparting soft skills and tacit knowledge on younger workers.

Media richness theory and Its implications on Remote Work

First I will discuss the media richness theory which is the effective use of a communication channel by matching it to the richness of the medium and the ambiguity of a task (Ishii, Lyons and Carr, 2019, p.124). This is relevant as it provides a framework on how different types of information should be transferred with mediums of differing richness with face to face having the highest richness. In the instance of remote work most mediums between the employer and the employee would be of medium and lower richness. This is detrimental as the duration for feedback would be higher and there would be a complete removal of body language and non - verbal cues, hindering the transfer of soft skills and tacit knowledge, shown in the table below (Bergin, No date, Part 2 - Image from Daft and Lengel 1984) .

This inefficiency reduces productivity through delays in decision making, misinterpretations and slowed work processes. For example, as emails lack instant clarification for tasks, decreasing productivity as employees may spend more time finding out how to complete a task then doing it. This would also adversely affect the younger employees as they wouldn’t have much experience doing complex tasks making them more susceptible to confusion potentially increasing task completion time. Hudgens, Nissen and Bergin (2011) compared face to face media to highly immersive virtual environments, low in media richness, via statistical tests and it was found that 

face to face media provided higher group accuracy. This would only be applicable when using low media richness immersive virtual environments like remote virtual workspaces with only text interaction. However if a business were to use an immersive virtual environment with greater interactivity like video, voice and text then the effects on group accuracy would be limited, thus the fall in productivity would be mitigated against. However difficulties in replicating spontaneous in-person discussion would still hinder productivity. Even so, the premise of the media richness theory is built upon an objective view of media characteristics and causes many empirical studies to have inconsistent results (Ishii, Lyons and Carr, 2019, p.124). Furthermore, individual preferences are not taken into account on which communication medium works best individually. Despite that, the lack of rich media in remote work would have a definite effect on productivity but at varying levels due to personal differences.

 Cost Saving and Productive Benefit of Remote Work

Regardless of the many negatives of remote work, it can significantly reduce a firm's operational cost. Furthermore, its benefits extend beyond cost saving as working from home provided labour stability in Covid - 19 and reduces absenteeism. I will begin by addressing the first claim with decreased operational costs for the firms, which is mainly through the downsizing of the workplace. For example (Bloom et al, 2013, p.19) found that when implementing remote work for a Chinese call center, there were estimated cost savings of around $1250 per employee each year. These cost savings could be re-invested into the firm with additional employee training which would increase productivity or with wage increases which would incentivise workers to produce more. Furthermore, in the case of productivity the study found that total factor productivity, a comparison of outputs to a certain amount of inputs, increased by 13% which monetarily is $375 per employee. This highlights how remote working can actually increase productivity of a firm through potential re-invest or actual gains. However, these gains may not be seen across all industries due to differing work types. For example, (Gibbs, Mengel, and Siemroth, 2023, Journal of Political Economy Microeconomics Volume 1) found that when remote work was introduced in an Indian IT firm in March 2022, productivity fell by 8%-19% shown by the graph below.

This fall in productivity could be caused by the increase in time worked from 5 hours to a high of 7.5 hours as employees may be pushed beyond their maximum, due to the high demands of the tech industry, and caused negative returns to occur. Additionally, in the Covid crisis the sanctity of remote work may have been altered due to children staying at home (Gibbs, Mengel, and Siemroth, 2023, Conclusion). However, for younger employees, they may not have any children but may have a lower maximum which would cause greater falls in productivity. This means that the potential lowering of productivity on those employees would be dependent on personal tolerances and any other variables. In spite of the varying conclusions with productivity and remote work, (Barrero, Bloom, and Davis 2021, cited in Gifford, 2022) stated that the proportion of days worked

from homes increased from 5% to 50% at the peak of the lockdown. This serves to show that remote work was paramount to enable the economy to stay running due to the lockdowns restricting anyone from leaving their homes. In the case of reduced absenteeism, (Bloom et al, 2013, table-7) shows how there was a significant reduction in exhaustion with the experiment of remote work implementation in the call centre. This could imply that absenteeism levels may fall as workers feel less tired and may be less prone to skip work right before or after the weekend.

The Role of Virtual Meeting Platforms

In this section I will discuss how the drawbacks of remote work can be alleviated by using virtual meeting platforms like Microsoft Teams or Zoom. However its ability to completely replace office work is limited due to technological issues and reduced spontaneity. To begin with the usage of virtual meeting platforms was also a necessity in the pandemic as shown with Zoom’s usage reaching a peak of 300 million in April 2020 (2024, Zoom User Stats: How Many People Use Zoom?, Available at link). This unprecedented rise in usage was due to the nature of meeting platforms and their ability to replicate real life. Furthermore, platforms like Microsoft Teams allow for employees to speak and text to each other mimicking the workplace environment. (Shoshan and Wehrt, 2021) using a survey of opinions from German workers found that 43.39% of workers had a positive view on video conferencing with one saying that they can have a relaxed talk with their colleagues. With relaxed talks, work stress would decrease which is one of the 4 factors that define work capacity and will thus increase productivity (Subel et al, 2022). However, due to the fact that this survey was created in the midst of the pandemic, this would mean that social interaction would have been limited and so these productivity increases may be only seen in that short period of time. In the case for younger employees, 40% of younger people aged 16 -24 report loneliness (Shah and Househ, 2023) which could possibly mean that social interaction at work may have a greater effect upon their productivity. With virtual meetings and remote working increasing work life balance, employees may be more incentivized to increase their productivity as they are given more time with family. However, it is shown that multitasking can occur in these meetings meaning that the focus on tasks is decreased, reducing productivity and high levels of multitasking can actually have an effect on stress levels  (Subel et al, 2022). To end with, virtual meetings give the employee the ability to work remotely with high levels of productivity but depend on the quality of the meeting and the amount of participants.

Conclusion

In conclusion, while remote work poses significant challenges to modern productivity beliefs, an effective implementation with rich media like virtual meeting platforms, minimisation of work overload and the adopting a hybrid work model would allow it to become more successful. However, issues are still faced with loneliness specifically for those younger employees and the hindrance of tacit knowledge transfer even if some days are in office. Hybrid work provides a safe middle ground between complete office work and remote work as it doesn’t have significant implications for the urban environment. This is because with remote work, the commute is removed affecting all the shops and firms nearby which may cause a regression in the centre of the city. With hybrid work employees would attain a better work life balance and employers would still see the economic productivity benefit and reduction in operation costs, making it the best of both worlds 

References

Media Richness Theory – Richard Bergin

Work from Home and Productivity: Evidence from Personnel and Analytics Data on Information Technology Professionals – Michael Gibbs & Others

The hidden costs of working from home: examining loneliness, role overload, and the role of social support during and beyond the COVID-19 lockdown – Knut Inge Fostervold

Job stress and loneliness among desk workers during the COVID-19 pandemic in Japan: focus on remote working – Fuyu Miyake

Social Connections in the Workplace – Wendy C. Birmingham, PhD

Revisiting media richness theory for today and future – Kumi Ishii

Does working from home work? Evidence from a Chinese Experiment – Nicholas Bloom

Younger people are more vulnerable to stress, anxiety and depression during COVID-19 pandemic: A global cross-sectional survey – Prerna Varma

New hires, adjustment costs, and knowledge transfer—evidence from the mobility of entrepreneurs and skills on firm productivity – Emma Lappi

No Employee Is an Island: How Loneliness Affects Job Performance – Missing Author

Examining Work Performance in Immersive Virtual Environments versus Face-to-Face Physical Environments through Laboratory Experimentation– Bryan Hudgens

Zoom User Stats: How Many People Use Zoom? – No Specific Author

Understanding “Zoom fatigue”: A mixed-method approach – Hadar Nesher Shoshan

Why does remote working lead to unproductive meetings? – Shaun Subel

Understanding Loneliness in Younger People: Review of the Opportunities and Challenges for Loneliness Interventions – Hurmat Ali Shah