Work-from-home model could severely sap companies' productivity, report finds

Given the work-from-home model that most companies in North America are resorting to in the face of COVID-19, executives should take note on the likely degradation of productivity - and take steps to address the issue.

That’s the findings of a McKinsey & Co. executive summary analysis released recently that seeks to provide advice for businesses looking to survive and emerge from the pandemic-induced economic malaise in the strongest position possible.

The report - an executive briefing by the consultancy on COVID-19 and the response to the crisis - said its data on productivity decay shows a dramatic slide as the number of work sites expand. The index of measurement - complexity units per man-week - shows that a company that is at 100% productivity when concentrated at one location sees that same productivity index fall to 76 when the work is split among two locations.

When that same operation splits to 6 sites, the index falls below 50% - reaching a low of 48.

The data clearly outlines the emerging concern from the COVID pandemic that the “current mix of work-from-home and at-work social distancing, combined with economic anxiety, is driving stress and reducing productivity.”

“Any lack of clarity in roles and responsibilities, decision rights and objectives is amplified in a remote environment,” the report said. “… [The] sense of lack of direction/isolation can degrade morale and performance.”

Other operational issues that could be exposed with more employees working remotely include problems with technology (team members may be missing the proper tools to do their jobs properly) and the overall work process (such as difficulty for some to self-organize in the face of real-time challenges and a drop in communications efficiency without face-to-face contact).

Isolation can also severely lower team cohesion, the report added.

However, there are a number of actions a company can take to counter these adverse effects of workers working remotely - and most of these suggestions centre around the removal of blockages on productivity.

For example, the McKinsey report suggests having smaller “cross-functional teams” that has clear roles and responsibilities, as well as methods to both communicate the goals of the company and track progress.

An executive also needs to exert his/her “increased role in providing direction, energizing the team and connecting the dots,” and the report stressed the need to focus on work-cultural elements - both with individual workers and in a group setting. Culture, the report said, is a key factor in driving performance in remote-work situations.