And the problem with vibes-based data analysis

We’re back with the newsletter & blog – expect to see us on a more regular schedule (bi-weekly!) with a mix of announcements, “that survey doesn’t say what you think it says” analysis, and strategic thinking about a variety of topics, from electric vehicles to politics to media to education and beyond. For our post-Labor Day installment, please enjoy this first piece (we have more to say!) on the work-from-home backlash.

The backlash to WFH has arrived and it’s couched in a lot of what look like facts, and even data, but… is it? Today, we take a look at the mounting pressure on workers to return to the office and whether there’s any truth to the idea that the WFH experiment has failed.

What counts as hours worked?

Earlier this summer, the Bureau of Labor Statistics released its annual American Time Use Survey. It’s a snapshot of what the average day looks like for Americans based on “diaries” self-reported by over 8,000 participants.

The survey, which covers all of 2022, measures things like the average number of hours individual Americans spend on leisure and exercise each day, how many daily hours are devoted to childcare or how much time is spent on chores. The survey also measures the average number of hours worked by both remote workers and on-site workers.

It’s a straightforward report but that didn’t stop business publications from finding a specious angle. Barron’s, for example, ran with the headline, “Remote Work Is Making Americans Less Productive, Official Data Show”:

[BLS] found that Americans working full time from home worked 2.5 hours less a day than Americans at the office. “It’s no wonder labor force productivity has been negative for the past five straight quarters amid office occupancy that remains at sub-50 percent in the largest US cities even +3 years after lockdowns,” writes DataTrek Research co-founder Nicholas Colas. Overall, the total civilian population worked for an average of 3.23 hours a day in 2022 down from 3.26 hours a day in 2019. The U.S. is 1% lazier. That number, given by the BLS, is the total population. Don’t forget, babies don’t work.

When you look at how BLS conducted its research and its instrumentation, the survey findings tell a different story. (Let’s set aside that the “total population” included in the survey starts with people at least fifteen years old—babies aren’t included).

The analysis in Barron’s conflates hours worked with productivity. It fudges whether BLS means the measurable economic indicator known as productivity or some moral assessment about how people spend their time (lazy v. productive). The BLS data does not address this question—so this kind of assessment is in the eye of the analyst.

The analysis also fails to account for at least one major part of the difference in hours worked as measured for remote and on-site employees: commuting time.

A top line statistic from the BLS report indicates that “on average, those who worked at home did so for 5.4 hours on days they worked, and those who worked at their workplace did so for 7.9 hours.” The average commute for all US workers is about an hour. The decline in the average worker’s commute is no decline in productivity; it’s the elimination of a superfluous task and it accounts for a substantial decline in documented work hours (the BLS counts commute time as working).

In addition to missing the methodology section of the BLS report that tells you commute time is work time, the Barron’s reporter implicitly assumes all workers surveyed have office jobs—but the BLS data tables reveal hours worked by sector. For people in management, business, and finance roles, the difference between office work versus WFH work hours is about an hour and a half—a difference that is negligible if you account for the hour-long daily commute office workers endure and WFH workers do not.

The survey’s definition of a “full-time worker” is not the same as what the public commonly thinks of as a “full-time employee.” The BLS survey counts every worker, fifteen years or older, putting in thirty hours or more each week at one or more jobs as a full-time worker. It doesn’t distinguish between people who work only at home and those who work only on-site. Many people do a mix of each, and many people work more than one job—one might be on-site, another at-home. And so it is in jobs other than white collar office jobs where you find the real disparities in hours worked. For people in construction and extraction, production, or even service and sales work, the survey reveals differences as high as 3 or 4 fewer hours worked when working from home instead of working “from an office.”

When you pause to think about the demands of this labor, the disparities in time make sense on two levels. A contractor on a job site—or going from site to site, with numerous side errands on the job—has a full schedule, often well over 8 hours. If they are working on billing, estimates, or vendor management at home, rather than driving from place to place, the reduction in surveyed hours worked again reveals a lot of decreased time in transit (and also a difference in kinds of work). Secondly, if you’re someone who works retail or service jobs, you may not get a say about how much work you do. Your employer may be suppressing your schedule.

What is productivity?

Since the Barron’s piece ran, the BLS released data showing that workforce productivity had actually gone up in the second quarter of 2023, reversing the 5 quarters of decline Barron’s referenced. One of the drivers of that increase in productivity was actually a decrease in hours worked, while employment rates stayed the same. The more hours the workforce puts in does not equal greater economic productivity.

The truth is there are multiple factors that add up to productivity, which is why it’s crucial not to be reductive about it. Productivity is a ratio of inputs and outputs. The inputs include hours worked by the labor force, but they also include capital investments, interest rates, energy prices, and the cost of materials and services. When you look at the workforce contribution to overall economic productivity, it tends to wobble up and down less than 1% over decades but other inputs vary much more widely.

Workforce productivity is only one measurement of economic productivity—we rely on it because it’s easier to collect this data, and because there are tools for collecting this data on a continuous basis. And while it’s useful for estimating overall economic productivity, it tends to put all the emphasis on labor, and not on management or other economic conditions. Multi-factor productivity is perhaps a more accurate measure of economic productivity, but it’s harder to gather and compare that data, and we can’t do it with the same frequency.

If interest rates go up, or prices on materials or energy go up, that can drive overall productivity down. Companies can try to drive overall productivity up by reducing their workforce or their workforce’s hours—but if that reduction in staffing leads to diminished outputs (e.g., revenue, units produced, etc.), that can bring productivity back down again.

For the moment, at least, fewer hours worked is helping drive up both the workforce productivity numbers and the total factor productivity score. So trying to connect diminished hours to economic productivity is pretty weak.

Which brings us back to Barron’s framing of workers as “lazy.” Threaded through the Barron’s analysis is an indifference to the actual performance of the economy. Instead, the reporter’s vibes-based interpretation suggests moral accounting: If you work more hours are you a better person? Are you responsible? Are you a good citizen? Do you know your place and do you behave morally within that level of status?

What do the workers think?

The Barron’s story that misinterprets BLS data is feeding into the current white collar “return to the office” trend. Apple, Meta, Disney, Amazon and JP Morgan are just some of the companies mandating that staff work on site. Executives at these companies are looking for data to justify this policy which is largely unpopular with rank and file employees.

If a reporter were to speak with staff at these companies, they would find people who have built their WFH schedules to accommodate things like preschool pick-ups and doctor appointments—without a decline in “productivity.” Many life decisions they have made in the past three years, including buying houses or having children, have been decided with the expectation that remote work will remain available to them. These are not “lazy” workers, but workers who see “return to the office” mandates as a rug pull.

Organizations should expect massive attrition rates as a consequence. More than three quarters of employees threaten to quit if they lose their flexible work schedules. An Entrepreneur report, summarizing findings from a trio of surveys, including one by the Fed that found that “nearly 3 in 10 (28%) who worked from home at least some of the time said they would be very likely to actively look for another job if their employer required them to work in person each workday”. One of the other surveys cited showed:

Nearly half (42%) of companies that mandated office returns witnessed a higher level of employee attrition than they had anticipated. And almost a third (29%) of companies enforcing office returns are struggling with recruitment.

Our takeaway

It’s been more than three years since the pandemic upended all aspects of our lives, including workplace accommodations and scheduling. Understandably, organizations are reassessing what works for them at this stage in the covid crisis. But putting an end to company policies that have been a benefit to workers and organizations alike is not the way to do it. Review data honestly before using it to justify major organizational changes that impact the daily life of your staff. Engage with your employees in good faith conversations, learn what they need to succeed — forget the pre-pandemic sensibility about how work “should” look, keep your eyes on the future.