Working From Home Exposed: How A Data Snafu Meant Everyone Misunderstood

One of the most compelling claims about working from home — that it is more productive than working from the office — has been challenged by new data from the UK's official statistics body.

The UK’s Office for National Statistics has had a second look at the productivity data for the coronavirus pandemic of 2020 and 2021, and decided that far from showing rapidly accelerating output per hour, the figures show the reverse.

The rethink involves a data set based on growth in average output per hours worked. 

The calculation is, in theory, simple: You divide gross domestic product by the number of hours worked, then calculate how much this changes year-on-year. It is a standard measure used by government statisticians throughout the world.

However, UK statisticians came to some erroneous conclusions. 

The early view was that working from home during the pandemic appeared to have helped output per hour worked to grow fast, rising by 5% during the pandemic years 2020-21.

What in fact happened was that the  UK's average output per hour growth rate fell by 0.3% over the coronavirus period, lagging behind growth in Canada (0.8%), Germany (0.9%), Italy (0.9%) and the USA (2.3%).

The revised data showed that far from working from home during the pandemic-improving productivity, it hampered it. The UK’s output per hour worked showed the second slowest growth of the G7 countries in 2021, excluding Japan where there isn’t enough data.

The poor UK performance followed a 1.2% increase in output per hour growth in 2020, the fourth-highest growth rate among the G7 nations that year, according to the component method.

That showed the UK was improving productivity well until work-from-home became prevalent, and it hasn’t recovered since. Almost all advanced economies took a hit to productivity during the pandemic, although the UK did worse than the rest.

Average output per worker growth rates over the coronavirus pandemic period were negative for all G7 countries except Canada and the United States.

Average output per worker for the G7 nations (excluding Japan and the UK) was 16% above the UK level in 2021.