Factors driving a productivity explosion
fortune.com
fortune.com
There's the quote that implies that return to office is not the explanation for this productivity rebound. Work from home is still far higher than it was in 2019, and so is productivity. While far from a smoking gun, this is more up to date evidence that execs who threatened to fire people who didn't RTO are as wrong as they seemed. The first executive who recants on their intuition that RTO would bring about an explosion of productivity above WFH will earn my respect.
My position isn't that every job that can be WFH should be, but that every person who wants to be WFH should be able to, and everyone who wants to work in an office should be able to. Even if working in an office is less productive, and costs the company a lot more money, and reduces the pool of talent, some employees still want it. Some executives do too: these people will be happier working together, so they should have that option.
...or maybe there's another factor, and this doesn't explain anything at all. Correlation does not imply causality.
We have LLMs now, we didn't have them in 2019, and productivity is up. Ergo, increased productivity must be caused by LLMs. Right?
EDIT: On average, WFH folks save 5 hours a week by not having commute. That means folks going into a workplace work 5 hours more. That's not even including all of the other perks/flexibility/cost savings WFH provides.
I mean I would have liked this too but it isn't realistic beyond what some companies have already been doing for years before covid, which is to pay for monthly public transit passes or towards the cost of it.
On the flipside it would mean companies limiting who is allowed to be in an office if that became mandatory. You live more than 15 min from the office? Sorry, WFH for you!
Factory job that absolutely can't be done WFH? You better come live in our communal housing where you have 5 min walk time to work or you are not getting that job!
People with short commutes would end up picking up the slack for those with long commutes, which could create some tension in the workplace. Why should those who are actually in the office working get compensated at the same rate as someone doing 20% less due to their shorter in-office work day?
That would only be a starting point, though. Because as others have already pointed out, employers still aren't compensating on-site employees for the time they spend commuting -OR- the time wasted preparing for the commute. The average one-way commute time in the US is just under 30 minutes. But in order to get to work at 9:00am, I used to have to wake up at 7:30am. That's an extra 1.5hrs per day, on top of the 1hrs spent commuting.
Finally, there's the human cost associated with working in the office. I didn't have time to help my kid get ready for school; he had to take the bus, which (yep) costs more money than if I could just drive him. When I got home, I usually missed dinner with my wife & kid. And I'd rarely have time to take care of all the daily chores: laundry, dishes, grocery shopping. Which means that once the weekend finally does arrive, I have to spend my free time working to take care of those remaining chores.
Now that I work from home, I can roll out of bed, drive my son to school, shower, get coffee, & show up to work at 9:00am every day. I can attend non-participant meetings while also doing laundry or dishes, while wearing a wireless headset. My cat spends part of his days in my office, which makes the work days feel less like work. I can grab a late lunch, pickup my son from school, & be home in same time it'd normally take me to get lunch downtown. I can make my own lunch at home, too, which is usually healthier & costs way less than eating near the office. When I'm done at work, I can actually have dinner with my family now. And when the week is over, I can actually spend most of my free time doing stuff I want to do, besides chores.
Honestly, I'm not convinced that employers could ever fairly compensate workers for what it costs us to commute. But forcing them to pay some of that price, instead of placing the majority of that burden on workers' shoulders, would be a start.
What preparation do you need for the commute that you wouldn't need working from home?
Any why do those preparations need 1 whole hour? When I'm in a rush, it takes me about 10 minutes from getting out of bed to being out the door.
You can pop back down to the kitchen at 9:15 and grab a breakfast to bring back to your seat.
You can hear the dog barking to get back in right from your desk, rather than having to wait for them to be done, then put them in the crate, before you go.
You know that the route to your desk won't have a random delay of 0-20 minutes, so you have to leave early just to guarantee arriving on time.
You know that there won't be a line at the coffee.
Even ignoring all those little improvements, there's a big difference between "the maximum speed I can get from bed to door in an emergency" and "the speed I am comfortable moving to get ready to go every morning of every workday."
You get what you negotiate, not what you sacrifice. If you feel you should be paid extra for going to the office (I agree), demand so!
Honestly, I have always felt that this would be true in any reasonable society. I'm a software engineer and I frequently think about what an absurd power structure we manage to maintain, in which those of us fortunate enough to sit at desks can keep the lower classes oppressed in this way. It seems very unstable to me.
I do agree that there's something wrong. But the reason it's structured this way is exactly because it's stable. It is what you get by letting people settle with minimum interference.
having less money than others doesn't make you oppressed
Wages are completely eclipsed by wealth, a far more significant differentiator.
"We treat these people poorly" isn't synonymous with, "Gee, I'd really like to be treated poorly."
By staying home and giving up my office, I am taking on the cost burden of the work facilities (office space, internet, etc). These were previously paid by the employer and are now paid by me. I should be compensated.
I might save money by not commuting, but that expense has NOT been transferred to my employer -- it's GONE. I saved that money and nobody has to pay for my commute now.
Curious, what do you mean? I was WFH from 2006 to 2021, and I feel like the commute improved a bit over that time with the new vehicles and navigation apps, but otherwise not much changed, so maybe I miss something that was better immediately pre-pandemic?
(Re-reading, offices are also poorer experiences for many people post-Covid given that a lot of people aren't there.)
In both cases the employee factors in those expenses into the active rate they charge. If pay generally remained the same when moving to the home (and in cases when returning to the office), it seems the cost is generally deemed equivalent.
Most employees do not have the luxury and privilege to be able to demand a raise any time they feel like they deserve one, and actually get it—either directly, from their current employer, or indirectly, by changing jobs.
Yes, this includes tech employees. Remember, we don't all work within the Silicon Valley bubble.
It does not. There are far too many constraints on people's employment and the information they have for it to be amenable to "free market theory".
https://www.irs.gov/newsroom/how-small-business-owners-can-d...
If we think less about the asymmetry between employers and employees, and think they are 2 parties entering into an agreement, the employee also has to contribute something to their work. They are bringing in their expertise and availability, how that is achieved is a matter of agreement. If the agreement said your availability to be in the office is up to you, then you are free to optimize on your side how to optimally achieve this.
I have seen people choose to live far away in better condition, trading for longer commute time, and vice versa. Why should it not be your responsibility? Ie if employer pay for commute time and possibly cost, then the incentive for me is to live as far away as possible.
Things should normalize as companies optimize their workforces, office leases roll off, and remote/hybrid work becomes standardized.
I think this is main factor driving increased productivity, not that WFH is inherently more productive.
The reason productivity is up so much lately is that for the past two years:
- Employment (https://fred.stlouisfed.org/series/PAYEMS) has been increasing at 1-2% annualized rate (because unemployment rate/labor force participation rate hasn't been changing, so employment growth has come from population growth, which was 1-2% when current 18-30 year-olds were born)
- Real GDP (https://fred.stlouisfed.org/series/GDPC1) has been increasing at 3-5% annualized rate
The reality is there is a giant consumption boom the past few years, but minimal increase in employment since we were already at full employment, so by definition there will just be increase in aggregate productivity. It is unrelated to concepts like how hard are people working.
Unemployment in the US has been falling for some time (apart from a brief spike in 2020).
https://www.statista.com/statistics/269959/employment-in-the...
You would expect this to have an effect on productivity as low value jobs are the ones most likely to be left unfilled.
If you nail that, and the org doesn't want WFH, they'll just move the goalposts to collaboration. Or face time. They're free to retcon a rationale onto their self-justified decision.
Day to day, I bang out some code. Am I doing it better or worse than last week? No idea. WFH, definitely leaves me less drained from commuting, but I cannot point to any hard metrics one way or the other.
Before the pandemic, employers were mainly limited to employing workers within approximately an hour commute. With this restriction loosened, they can now more easily found workers better suited (i.e more productive) for a role than the previously available local options.
Over time, this will work to increase aggregate wages, as productivity increases are the main driver of wages.
The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with, and usually the employer has the upper hand.
Moreover, the present discussion is about whether WFH may or may not be affecting productivity, not my tangential side comment about the link between productivity and wages.
Which stands to reason. We have continually increased overall productivity by adding more workers (notably robots), not by individually becoming more productive. If you double productivity by doubling the workforce, when you divide up the fruits each worker still ends up with the same amount.
We saw wage growth during the transition away from our primarily agrarian economy, but that's because wages were largely not a thing in said agrarian economy. People sold things (crops, livestock, etc.), not their time. As people started to leave the farm to work in the factory, wages, which were previously zero, had nowhere else to go but up.
But now that most everyone sells their time, we've achieve peak wage. As you point out, any apparent wage growth going forward will simply be in alignment with inflation.
> The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with
While that is definitely true, given enough time and negotiation (of which we have had plenty for most jobs) wages will converge on the productivity the worker is providing. So while you can most definitely cherry-pick individuals who have wages below their productivity and individuals who have wages above their productivity, the overall market ultimately settles where wages and productivity meet.
However, hiring engineers from Latam could indeed be an option to replace US workers if they can't offer an edge. The issue here is the language barrier.
It’s either one or the other- don’t doublespeak to me.
To me it looks like all productivity gains have been eaten up by something. I feel Scrum is very undproductive, this might be one explanation for development, but marketing etc.?
I'm only seeing comparable productivity on the backend these days when teams are using AWS native services.
Nobody cares about your comfort, costs, etc. All of you who keep stubbornly making those arguments are completely missing the point.
Yes, you may be more productive working from home simply because your work is full of dense text, and exacting and deliberate decisions. Not even the dumbest exec or manager is saying you're not. These articles aren't about you. The majority of office workers aren't programmers.
why in a very strong labor market would the threat of being laid off be compelling greater productivity improvements than before?
Class warfare making high productivity white collar work harder, haha.
If they can do it cheaper elsewhere in the world then they clearly are not focusing on the premium values of more expensive workers.
Naturally, having native speakers with good education should be seen as better than importing. If importing is ever actually better, then one has to question the value of the education being given to the premium workers.
For the most part, you'll find American companies that are remote are simply hiring from all over America, not the world.
I already know developers using AI successfully to automate boilerplate and routine code generation, leaving them more free to spend time on the hard stuff.
AI is cheaper than outsourced labor.
I have fired offshore teams and hired US ones because I prefer people who think, care, look at the big picture, share their experience, and write quality working software, once.
Offshore software felt like someone building a car by spotwelding everything together for record times.
Please don't create accounts to break HN's rules with.
I'd certainly love to apply this logic to our wannabe-aristocracy, whose sole contribution to society is gormlessly doling out access to the capital that they fell ass-backwards into without any merit on their part.
To be clear, this is not a defense of RTO policies.
Yes, do that. If you can close down one role and replace it with an Indian in India doing that role cheaper, then with the same logic you can close down the entire office and replace it with an office of Indians in India doing those roles, cheaper.
Somehow, the first applies and is used a threat for return to office, but the second 'magically' doesn't apply. If you need to keep westerners doing the jobs for any reason, and you can't outsource those tasks to India for any reason, then the people may as well be westerners WFH.
Pretending this isn’t the case because you really want to be angry at me or as a reason to riff on whatever form of Management Bad this is, is weird, but you do you.
I feel like you’re being intentionally obtuse in not understanding why one scenario is fundamentally nonsense, and not the pedantic gotcha you think it is.
That is, the implicit threat "if you don't RTO, we will offshore you" comes with the counter "if you do RTO, we won't offshore you" - except if offshore was actually tempting, they could and would offshore your entire office even after you RTO to it, and "the market" would/will offshore the whole company.
To the extent that doesn't happen, "you working from home is indistinguishable to an Indian working from India" isn't true. Timezone, language, culture,
"RTO because we need the extra productivity of everyone in the office - but if you don't, we'll accept the reduced productivity, just with other cheaper people" is also nonsense - then why not offer the WFH American less money to stay WFH? No? Because it's a punishment and not a real business decision.
You’re welcome to try to use TCS/Infosys or worse places to outsource, but the results will be predictable.
Before that I survived the first dot com bubble, 2008 housing crisis. I have been through rounds of layoffs and all sorts of outsourcing projects.
At some point it all boils down to numbers. Why hire a Bay Area resource when a Kansas one is cheaper? Why hire a Kansas one when someone globally is cheaper?
I think that the only reason we haven't seen deeper cuts and more tech layoffs and outsourcing is that everyone is skittish about sending work to Eastern Europe. With that venue cut off the remaining tech markets remain higher priced and look a lot less appealing.
There are reasons to be in an office sometimes. Planing, team building, those exchanges around the coffee pot. The random engineer who prarridogs and spouts an answer to the problem you're discussing with someone else. Pick your poison, a week every month, a month every quarter get that team building and face time in, pick up the value it has and then go back to WFH and zero commute... The answer isn't no office its "hot desk when it matters"!
(Although I’ll say I’m also a bit lazier - I’ve accepted some autocomplete suggestions that are definitely worse than what I’d write myself, but they’re a whole lot faster than my version.)