As Workers Return to the Office, Productivity Hits a Historic Low

The latest figures reveal US productivity rates have dropped by the sharpest rate since 1947, despite record growth in 2021.
Jade Artry

A new report released by the Bureau of Labor Statistics revealed that productivity in the US has plunged by the sharpest rate seen since the 1940s.

Given that productivity grew by 4.3% in the first quarter of 2021 – the highest rate we've seen in years, the latest figure suggests a huge shift in the attitude towards work, causing businesses to question how best to remedy it.

Chief economist at the Kenan Institute of Private Enterprise, Gerald Cohen, suggested that the boost in 2021 was probably due to the coronavirus recession, with businesses being forced to shift to remote work overnight, but it also suggests that the switch to remote work was a success – at least in terms of productivity.

With more companies now shifting to a fixed hybrid model and requiring employees to return to in-office work, some experts suggest more flexibility could be the answer.

Companies Are Losing High Performers

While no one can conclusively say what the historic drop in productivity was caused by, Lawrence H. Summers, president emeritus of Harvard University and former treasury secretary, suggests “it could have something to do with the fact that many employees were working unsustainably hard in 2020 and 2021.”

Since the ‘Great Resignation' companies are losing high performers to jobs with higher wages and more flexibility, according to Sinem Buber, lead economist at ZipRecruiter, with proposed changes in the working environment causing half of hybrid workers to consider quitting if they have to return to the office. It seems employees want more flexibility.

Top execs, like Ian Goodfellow, Apple’s Director of Machine Learning, advocated for more flexibility in his team and quit his job in opposition to Apple’s return to office policy earlier this year, demonstrating just how high up the need for flexibility goes.

But for companies, replacing high performing employees is difficult, and training new hires amid the rise of quiet quitting is a risk.

Is Productivity Paranoia Causing a Frenzy?

According to Kathy Kacher, an advisor for corporate executives, leaders are under heightened pressure to boost employee performance as firms try to establish a post-pandemic normal.

Tech giants like Meta and Google have openly addressed concerns about worker productivity, and pledged to minimize distractions and tackle productivity issues head on by creating a more ‘mission-focused' culture, and calling out lower performers.

“There are real concerns that our productivity as a whole is not where it needs to be for the head count we have” and he asked employees to help “create a culture that is more mission-focused, more focused on our products, more customer focused. We should think about how we can minimize distractions and really raise the bar on both product excellence and productivity.” – Sundar Pichai, Google CEO.

Microsoft chief executive, Satya Nadella, spoke on the rise of “productivity paranoia” with many employers turning to spyware in order to track or ‘keep tabs' on employee activity. Nadella argued that ‘the technology can have a deleterious effect on trust and employee engagement' and we know that many tech employees would agree.

In a study we covered earlier this year, 56% of tech workers said they would quit their job if they found out that their employer was recording video, or audio of employees through their computers, whilst 51% said the same if facial recognition was built into employee productivity.

A More Effective Way to Boost Productivity and Employee Retention

Productivity is difficult to measure for some workers, but we know from previous studies that happy employees work harder.

In a paper on Happiness and Productivity, Dr Sgroi, claimed that the driving force behind increased productivity was linked to the fact that happier workers use the time they have more effectively, ‘increasing the pace at which they can work without sacrificing quality’.

We also know that workers want more flexibility, with 52% employees willing to take an 11% pay cut if they’re able to keep their remote job intact.

So, maybe flexible working arrangements is the answer for employees, but how do we ensure that the arrangement also works well for businesses?

Fortunately, we have the technology to ensure businesses can operate a hybrid working model efficiently, with web conferencing tools like Microsoft Teams, Google Meet and Zoom revolutionizing the way we conduct our work meetings.

Project management tools can help employees better manage their time, and remote desktop software means your team can log on to your systems securely – with password managers and VPNs ensuring that all sensitive company data is safe.

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Jade Artry is the Content Manager for Tech.co. A digital marketing specialist with over 12+ years experience, her passion for tech and innovation has driven from life in London to Japan. Her experience and exposure to business and emerging technologies means that she's equipped with a wealth of knowledge to help readers go from technophobe to tech pro, quicker than a cup of instant ramen.

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