Why productivity has little to do with where you work

It’s been four years since the pandemic shifted the world’s labour force, but the intense debates about working at home and the office rage on, with talks on productivity as the central battleground. And after years of passionate arguments, the numbers remain inconclusive.

Earlier studies, often those released at the height of the pandemic, showed how working at home yielded higher productivity for the workers. The more recent studies, however, suggested otherwise, showing dips in productivity for remote workers and surges for those at the office.

It’s true – numbers don’t lie, but you need to dig deeper when they fail to accurately represent reality. And when you drill it down to the core, you find this truth: where an employee sits has far less impact on productivity than we've been led to believe. 

READ | How remote work is costing employers

What drives productivity

The Reserve Bank of Australia offers two concepts of productivity. One is “labour productivity,” which, mathematically, is output per worker per hour worked. The other one is “multifactor productivity”, defined as output per unit of combined inputs – inputs that usually include labour and capital.

The RBA provides a complete working formula, but in its simplest sense, work productivity is about how efficiently employees turn resources (like time, skills, and effort) into valuable output. But productivity isn’t just about working harder or faster. It’s also about working smarter and achieving high-quality results sustainably that benefit both the individual and the company.

To understand how it works, let us quickly examine the essential factors that power employee productivity.

1. Skills and tools

A highly skilled, adaptable workforce is productive. An employee can be highly productive if he has the skills, knowledge, tools, technology, and adaptability to deliver the results needed to do the job. 

2. Company culture

Productivity thrives in environments where employees feel valued, supported, and aligned with the company’s values. Culture often drives employees to work hard even in stressful situations because they feel a sense of shared purpose with the organisation.  

3. Laser focus

Distractions are the nemesis of productivity. And they come in many forms: excessive meetings, torrential emails, social media, environmental noise, chatty colleagues, interruptions, hunger, personal problems, and more. 

4. Clear communication

Unambiguous communication across all levels is vital for productivity. An employee can only do his job accurately if the instructions are clear. A manager can only be effective if her team communicates openly about their needs. 

5. Leadership style

Leaders who inspire, guide, and empower their teams set the stage for high performance. Conversely, leaders who are feared more than respected tend to alienate and disengage people, leading to productivity dips and even attrition. 

6. Career growth

Employees who envision a path for professional growth within the company are more motivated and productive. The Australian Financial Review reported in 2022 that at least 70% of Australians say career growth is something they desire from their employers. 

7. Fair wages

Higher wages alone will not guarantee productivity, but they are a source of motivation because, let’s face it, who would want to work hard for a company that pays low? Wages are even more important today as Australia grapples with a cost-of-living crisis. 

READ MORE | Cost of Living Crisis: Workers want a raise 

Work from home vs return to office

Now that we know the essential factors, we can start looking at them through the lens of work-from-home and return-to-office arrangements to illustrate whether sitting in their office chair or at their kitchen table greatly affects a person’s productivity.

Let’s say you have a talented developer working remotely. Yes, he might struggle if constantly interrupted by household demands, but what’s the difference if he’s at the office, trapped in endless meetings, wasting more of his time on productive work?

Even if you have a hard-working team of developers at an open-plan office and brilliant content producers scattered across home offices, their productivity will suffer from stress and anxiety if constantly placed under the pressure of micromanaging leaders and toxic company culture.

Yes, communication can be more straightforward at a personal, face-to-face level. But sometimes, some instructions can be crafted in detailed but concise emails that no longer need half an hour of one-on-ones at the office.

And this is where it all makes sense – productivity isn’t entirely dependent on whether there are bums in office seats. It’s all about how the managers use work-from-home, hybrid, and full onsite arrangements to maximise their talent.  

A shift in mindset towards what truly matters

From a pure productivity standpoint, the conversation shouldn’t be about which one is better, a full remote setup or a full-time office-based arrangement, but more about what the people need to sustain productivity, proactivity, and engagement.

Productivity, per se, isn't a geographical problem. It's a question of how well we cultivate and harness our most valuable asset: our people.

Of course, the conversation about remote and onsite work will take another route if we put it through the lens of cost-efficiency. But as far as productivity is concerned, it’s all about how you help your people become the best versions of themselves.