The Perks Workers Want Also Make Them More Productive
Now if only corporations would listen …
Three years after the start of the COVID-19 pandemic, remote and hybrid work are as popular as ever. Only 6 percent of employees able to do their jobs remotely want to return to the office full time, according to a Gallup survey published in August. The vast majority of “remote-capable” workers1 want to spend at least some of their workdays at home. When they’re forced to return to an office, they’re more likely to become burned out and to express intent to leave, according to Gallup.
But that’s not all. The pandemic, combined with a strong labor market where workers have persistent power to demand the kinds of work cultures they want, means even more changes could be coming. After years of advocacy, many U.S. states are moving towards mandatory, paid family and sick leave for all workers. Meanwhile, companies are flirting with a four-day workweek in pilot programs worldwide, including in the U.S.
Policies like these have conventionally been seen as good for workers’ personal lives but bad for business. But thanks to the massive, sudden changes brought on by the pandemic, we now have more data than ever, and it shows that assumption is mostly wrong. Overall, policies that are good for employees’ personal lives are, when enacted correctly, good for their work lives, too. In fact, they seem to be good for everyone. The only question is whether we’ll start to see more companies adopt them.
Working from Home
Before the pandemic, just under 6 percent of employees were primarily working from home, but that had tripled to nearly 18 percent by the end of 2021, the most recent year available, according to U.S. Census Bureau estimates. While it’s still a minority of Americans overall, the shift to working from home is concentrated among certain kinds of workers — especially those who once filled downtown offices in cities on the coasts. In general, employees think they’re more productive when they work from home, while managers suspect that they’re not.
Economists have been trying out who’s right, using a couple different measures. A Harvard Business Review study found in August 2020 that working from home lets knowledge workers concentrate on tasks they think are important and want to do, and less time getting pulled into irrelevant meetings or working on someone else’s project.2 But when worker output can be measured, that’s even more helpful. The federal agency that reviews patent applications already measured worker productivity based on a metric that included actions completed in a specific period of time. A study in the Strategic Management Journal found before the pandemic that workers’ ability to work from anywhere increased productivity by 4.4 percent.
Part of that may simply be that workers are spending more time completing tasks when they would otherwise be commuting: A National Bureau of Economic Research working paper found that employees were working 48.5 more minutes a day during lockdowns in 2020. Another NBER working paper found that workers devote about 40 percent of the time they saved from not commuting to their jobs. Anecdotally, some workers worry they shouldn’t take a sick day for minor illnesses while working from home.
In fact, working from home could turn out to be better for the company than it is for the workers – or, at least, the situation is more complicated than it may appear on the surface. Workers are generally happier working remotely and report higher productivity and better work-life balance, unless their work creeps into off hours, according to the School of Industrial and Labor Relations at Cornell University. It found that working from home outside of normal work hours is associated with worse psychological outcomes and family conflict.
Working from home instead of an office has other downsides: some people do miss face time with their coworkers and meetings can take a little longer to organize and set up, which is part of the reason hybrid models with some in-office workdays are emerging as the most popular. But all of those problems cry out for the need for new management styles to set boundaries around the workday and let go of some old ideas about “face time.”
Instead of addressing those problems, many managers have been reluctant to believe the positives of working from home and major companies have persisted in return-to-office policies. The drive seems largely driven by managers who are struggling to the new work environment as well: In the beginning of the pandemic, 40 percent lacked confidence they could manage their employees remotely, according to another study from the Harvard Business Review, though some managers have adjusted better than others.
A pilot program introducing the U.K. to a 32-hour workweek wrapped up last month. Sixty-one participating companies spent six months experimenting with a four-day workweek. All but five will continue it into the future. Surveys taken after the pilot found employees were less stressed, slept better and were better able to maintain work-life balance, according to reporting from The Guardian. The surveys also found that sick days fell by two-thirds, and turnover fell by more than half. Overall, the companies reported no drop in productivity, and even an increase in some cases.
Even before and then throughout the pandemic, some firms around the world began experimenting with shorter workweeks. In these four-day pilot programs, employees keep their pay and pledge to keep their productivity up to what it had been before the trial. They’ve found, in general, that workers are happier, less stressed and also get at least the same amount of work done as they did working five days.
Companies in Iceland, Belgium, Spain, Japan and New Zealand are experimenting with shorter work weeks, and 38 companies in the U.S. and Canada are undergoing a similar trial. This year, Maryland is considering legislation that would encourage employers to experiment with a four-day workweek. Fifty-nine percent of Americans support the idea.
Other than the recent trial in the U.K., most of the reported benefits of the four-day workweek come from anecdotes. Managers have reported some challenges as they figure out how to meet client demand in the new environment. But so far the four-day workweek trials have been voluntary, which might mean the companies that choose to do them are more motivated to solve these problems than they would be if the change were forced. An advocacy group pushing the pilots, 4 Day Week Global, argues that the change is possible when managers measure results instead of simply hours worked.
The five-day workweek in the U.S. is, after all, a relic of a decades-old law that sought to balance worker and employer needs in a completely different cultural and economic context. It was instituted after an era of rapid industrialization, during which factories had demanded much longer days and weeks from their employees. In response, labor organizations around the globe demanded new laws to protect workers. Maybe those limits are simply an outdated relic of that time.
There’s no federal law in the U.S. mandating that employers provide paid sick leave for their employees. Nearly a quarter of workers — especially low-income workers, often in the kinds of service jobs deemed essential during the pandemic — can’t call in sick when they get a cold or their child is sent home from school with a fever. Under certain conditions, workers are entitled to periods of unpaid leave, but the fact that it’s unpaid can make it a burden to use.
This changed briefly during the pandemic, when federal law dictated that employers provide up to two weeks of paid leave for their workers affected by the coronavirus. That expired at the end of 2020.
The benefits of paid sick leave became clear when the U.S. was trying to stop the spread of a deadly virus. But advocates had been pushing for mandated paid sick leave long before. For the past decade, states have been moving to fill in the gap, and today 17 states have mandatory paid sick leave, as well as a handful of counties and cities including Washington, D.C. This year, at least five states are considering such bills.
It’s not surprising that paid sick leave is better for workers who have access to it. A study in Health Affairs found that state-mandated sick pay led to a 5.6 percent reduction in emergency room visits, indicating that workers able to take paid sick leave were able to deal with health problems before they worsened. And a study from Drexel University also found that paid sick leave mandates led to a 6 percent increase in productivity.
Eleven states require employers to provide paid family and medical leave for longer periods, although not all of those laws have been enacted yet. At least five more states have introduced similar laws or pilot programs this year. These kinds of laws are popular: Eighty-five percent of Americans say workers should have access to paid leave for their own health problems. A 2021 analysis of New York’s paid leave law found that employers weren’t hurt by the mandate, and actually found it easier to plan for employee’s long absences.
Employers seem to understand that many of these benefits are good, since they have long often offered things like flexible work and paid leave as benefits to employees to try to recruit top talent. But that leaves many more workers out. When employers have decided to require return to office, they’ve often framed remote work as “phoning it in” or said that in-person work is good for “company culture” without offering much evidence. When it comes to a shorter workweek and paid leave, many businesses object to the up-front costs, even if they benefit later from worker retention. So far, the evidence of all the potential benefits hasn’t been enough for employers to invest widely in new work cultures.