Employers Weigh Return-to-Office Mandates to Boost Productivity

The COVID-19 pandemic drastically reshaped work environments as businesses closed their doors to curb the spread of the virus. While the economy has rebounded faster than anticipated in many sectors, companies now grapple with lingering productivity issues. As employers consider return-to-office mandates, questions arise about whether these policies will effectively increase productivity.

Productivity in the United States and Canada exhibited similar growth trends before the pandemic. According to data, both countries experienced parallel increases in output per person across various business sectors. However, since the onset of the pandemic, a divergence has emerged: U.S. businesses report productivity growth, while Canadian firms have faced declines. This shift raises important questions about the underlying factors influencing productivity.

Economic productivity measures how efficiently inputs like labor and materials are transformed into goods and services. Despite the pandemic’s disruptions receding after more than five years, Canadian productivity growth remains concerning. The question is, what has contributed to this downturn?

In addition to Canada, Australia is also experiencing productivity challenges, particularly within its residential construction sector. The average time to complete apartment projects has increased from approximately 25 months to over 33 months since the pandemic began. This trend mirrors concerns in Canada, where employers link remote work policies to decreased productivity.

Many organizations, including Zoom, which became synonymous with remote work, have shifted their strategies. In 2023, Zoom mandated that employees work in the office at least two days each week, reflecting a growing belief among employers that in-person work enhances productivity.

The prevalence of remote work significantly differs between Canada and the United States. Statistics Canada reported that, as of December 2021, over 50% of public sector employees in Canada worked from home. In contrast, only about 20.7% of U.S. public sector employees engaged in remote work during the same period. This disparity may play a role in the differing productivity outcomes observed in both countries.

Unionization rates further complicate the productivity landscape. In Canada, about 28.7% of workers were union members in 2022, a decrease from 37.6% in 1981. Meanwhile, union membership in the United States has seen a more dramatic decline, with only 10.1% of American workers belonging to unions in 2022, down from 20.1% in 1983. As unionization rates differ, the impact of employee representation on productivity becomes another variable to consider in this complex equation.

As return-to-office mandates become more stringent, employees have begun to resist. Surveys indicate that many remote and hybrid workers report higher productivity levels when working from home compared to onsite. Employers, on the other hand, face challenges in accurately assessing productivity for hybrid workers, complicating the evaluation process.

To address these concerns, a more thorough analysis of firm-level data comparing pre- and post-pandemic productivity trends is essential. Objective metrics that assess sales or value added can provide clearer insights into the impacts of remote work arrangements on productivity.

In Ontario, Premier Doug Ford has requested that public sector employees transition to full-time, in-person work starting next year. This decision has prompted the union representing these workers to challenge the government, citing concerns over the short notice provided. While the pandemic’s effects have long since faded, the shift back to traditional work arrangements raises questions about employee expectations and workplace flexibility.

Ultimately, the decision to allow remote work should center around maximizing productivity rather than merely equating attendance with output. Employers and unions alike must prioritize objective measures to assess whether remote work arrangements are beneficial or detrimental to productivity.

The contrasting productivity trends between Canada and the United States highlight the complexities involved in evaluating workplace dynamics. Multiple factors contribute to productivity fluctuations, making definitive conclusions difficult.

According to Murtaza Haider, executive director of the Cities Institute at the University of Alberta, and Stephen Moranis, a veteran in the real estate industry, understanding these intricacies is vital for businesses navigating the post-pandemic landscape. As organizations grapple with the future of work, the impact of remote and hybrid arrangements will remain a critical topic of discussion.